1999 (3) TMI 669 - SC - Indian Laws

Summary

Issues Involved:
1. Whether the plaintiff can withdraw a suit at the appellate stage after a decree has been passed.
2. The impact of the plaintiff's withdrawal on the rights vested in the defendants under the decree.
3. The applicability of Order 23 Rule 1 and Rule 1-A of the Code of Civil Procedure (CPC) in the context of suit withdrawal at the appellate stage.
4. The rights of transferees-pendente-lite in the context of the suit withdrawal.

Issue-wise Detailed Analysis:

1. Withdrawal of Suit at the Appellate Stage:
The primary issue was whether the plaintiff could withdraw a suit at the appellate stage after a decree had been passed by the trial court. The court held that the plaintiff does not have an unqualified or unfettered right to withdraw the suit at the appellate stage. The withdrawal of a suit at this stage, if allowed, would have the effect of destroying or nullifying the decree, thereby affecting the rights of the parties vested under the decree. Therefore, such withdrawal cannot be allowed as a matter of course but only in rare circumstances where a strong case is made out.

2. Impact on Vested Rights:
The court emphasized that once a decree is passed, it conclusively determines the rights of the parties with respect to the matters in controversy. These rights become crystallized and vested. The withdrawal of a suit at the appellate stage would prejudice these vested rights. The court cited several precedents, including decisions from the Bombay, Madras, Allahabad, Andhra Pradesh, Rajasthan, and Punjab & Haryana High Courts, which consistently held that the plaintiff's right to withdraw the suit is not absolute and must be balanced against the rights accrued to the defendants under the decree.

3. Applicability of Order 23 Rule 1 and Rule 1-A CPC:
Order 23 Rule 1 CPC allows a plaintiff to withdraw a suit or abandon a part of the claim unconditionally. However, this right is not absolute, especially at the appellate stage where a decree has already been passed. The court highlighted that Rule 1-A, inserted by the Code of Civil Procedure (Amendment) Act, 1976, allows a defendant to apply to be transposed as a plaintiff if the original plaintiff withdraws the suit. This provision ensures that the rights of defendants are protected and that they can continue the litigation if they have a substantial question to be decided against other defendants.

4. Rights of Transferees-Pendente-Lite:
The court addressed the rights of the appellants, who were transferees-pendente-lite, having purchased the suit property from the plaintiff after a declaratory decree was passed in his favor. The appellants were impleaded as respondents in the appeal under Order 22 Rule 10 CPC. The court held that the appellants, being transferees of the property and having been impleaded as respondents, were virtually in the position of plaintiffs. Therefore, they had a vested right that could not be taken away by the plaintiff's withdrawal of the suit unconditionally. The court rejected the contention that the appellants obtained the sale-deed by fraud, as this was not the subject matter of the suit under appeal.

Conclusion:
The court concluded that the withdrawal of a suit at the appellate stage, which would have the effect of nullifying the decree and prejudicing the vested rights of the defendants, cannot be permitted unconditionally. The impugned judgment of the High Court, which allowed the withdrawal, was set aside. The application for withdrawal of the suit was rejected, and the appeals were remanded to the High Court for a decision on merit in accordance with law. The parties were directed to bear their own costs.