1)I)OI+(I1O)

Withdrawal and compromise of suits

At any time aIter the institution oI the suit, the plaintiII may abandon his suit or abandon a part
oI his claim against all or any oI the deIendants without the leave oI the court. The right is
absolute and unqualiIied and the court cannot reIuse permission to withdraw a suit and compel
the plaintiII to proceed with it,
1
unless any vested right comes into existence beIore such prayer
is made.
2
However, in case oI such abandonment or withdrawal oI a suit or part oI a claim
without the leave oI the court, the plaintiII will be precluded Irom instituting a Iresh suit in
respect oI the same cause oI action
3
. The plaintiII also becomes liable Ior such costs as the court
may award to the deIendant.


Order 23 deals with withdrawal and compromise oI suits. It provides Ior two
types oI withdrawals:
(i) Absolute withdrawal, i.e. withdrawal without the leave oI the court; and
(ii) QualiIied withdrawal, i.e. withdrawal with the leave oI the court.
It declares the eIIect oI withdrawals. The order also provides Ior compromise
oI suits and eIIect thereoI.








1
Bijyananjda v. satrughna sahu , AIR 1963 SC 1566
2
ramamurthi v. rajeswararao , (1972) 2 SCC 721
3
Sarguja transport service v. state transport appellate tribunal, (1987) 1 SCC 5

+1I1I)/+/ OI +1I O)I1)

a) Withdrawal 94:9 leave of court: Rule 1)-

At any time aIter the institution oI a suit, the plaintiII may abandon his suit or abandon a part
oI his claim against all or any oI the deIendants without the leave oI the court it has been held in
ijyananda ; $atruglma $ahu

In rammurthi v. rajeshwara rao. This right is absolute and

unqualiIied and the court cannot reIuse permission to withdraw a suit and compel the plaintiII to
proceed with it
5
, unless any vested right comes into existence beIore such prayer is made
6
.
However, in case oI such abandonment or withdrawal oI a suit or part oI a claim without the
leave oI the court, the plaintiII will be precluded Irom instituting a Iresh suit in respect oI the
same cause oI action. The plaintiII also becomes liable Ior such costs as the court may award to
the deIendant.

Rule I-A oI Order 23 as added by the
Amendment Act oI 1976 provides Ior the circumstances under which the deIendant may be
allowed to be transposed as a plaintiII where the plaintiII withdraws the suit. Provided that where
the plaintiII is a minor or other person to whom the provisions contained in rules 1 to 14 oI order
XXXI extend, neither the suit nor any part oI the claim shall be abandoned without the leave oI
the court.

(b) Withdrawal with rule of court rule 1 (3)- where the court satisIies that a suit must Iail
by reason oI some Iormal deIect, or there are suIIicient grounds Ior allowing the plaintiII to
institute a Iresh suit Ior the subject - matter oI a suit or part oI a claim, it

may grant permission to withdraw such suit or such part oI the claim with liberty to Iile a Iresh

4
Or. 23, R. 1(1).
5
AIR 1963 SC 1566
3 (1972) 2 SCC 721

suit in respect oI the subject matter - oI such suit or such part oI the claim or such terms as it
thinks Iit
7
. such permission may be granted by the courts on the Iollowing grounds:

(i) Grounds-
(a) That v .vi nv. {vi , cv.on o{ .onc {onv vc{c., o- though the expression
"formal defect" has not been deIined in the Code, it connotes some deIect oI Iorm or procedure
not aIIecting the merits oI the case; such as want oI statutory notice under Section 80 oI the
Code, misjoinder oI parties or oI causes oI action, non-payment oI proper court Iee or stamp Iee,
Iailure to disclose cause oI action, mistake in not seeking proper relieI, improper or erroneous
valuation oI the subject-matter oI the suit, absence oI territorial jurisdiction oI the court, or deIect
in prayer clause, etc.But a deIect aIIecting the merits oI the case, or a deIect which goes to the
root oI the plaintiII's case cannot be said to be a Iormal deIect;e.g. non-joinder oI a necessary
party, omission to substitute heirs, omission to include all the causes oI action in plaint, non-
registration oI a partnership Iirm, bar oI limitation, deliberate under valuation oI the subject-
matter oI the suit, addition oI a new Iactual plea, Iailure to bring legal representatives on record,
etc.

(b) that there are sufficient grounds for allowing the plaintiff to institute a
fresh suit for the subject - matter of a suit or part of a claim -The expression "other
sufficient grounds" should generally be construed efusdem generis (oI the same kind or nature)
with Iormal deIect.1O For instance, where the suit was premature, or it had become in Iructuous,
or where the plaintiII Ielt that the deIendant was absent and even iI the decree was passed, it
could not be executed, it was held to be a suIIicient ground. Wide and liberal meaning should be
given to the expression "suIIicient grounds" by exercising power in the interest oI justice.


It may on such terms as it thinks Iit, grant the plaintiII permission to withdraw Irom such suit or
such part oI the claim with liberty to institute a Iresh suit in respect oI the subject - matter oI such
suit or part oI a claim.

7
Rule 1 (3)

(4) Where the plaintiII-

(ii) EIIect oI leavens any suit or part oI claim under sub-rule (1), or
(ii) Withdraws Irom the suit or part oI a claim without the permission reIerred to sub-rule (3),

It is at the discretion oI the court to grant such permission and the court can grant it either on
an application oI the plaintiII or even suo motu. Such permission may be granted on such terms
as to costs, etc. as the court thinks Iit. The granting oI permission to withdraw a suit with liberty
to Iile a Iresh suit removes the bar oI res fudicata. It restores the plaintiII to the position, which
he would have occupied had he brought no suit at all.

(c) Suit by minor. Rule 1(2)
By the Amendment Act oI 1976, a speciIic provision has been made that where the plaintiII
is a minor, neither the suit nor any part oI the claim can be abandoned without the leave oI the
court.12 Sub-rule (2) oI Rule 1 enacts that an application Ior leave under the proviso to sub-rule
(1) oI Rule 1 must be accompanied by an aIIidavit oI the next Iriend and also, iI the minor oI
such person is represented by a pleader, by a certiIicate oI the pleader to the eIIect that the
proposed abandonment is, in his opinion, Ior the minor's beneIit as held by a Gujarat decision
there is nothing in order XXIII rule 1 which enjoins on the court to make enquiry whether
interest oI the minor is protected or not beIore the plaintiII is allowed to withdraw the suit so
provisions oI order XXXII , rule 7 should not be imported to orders XXIII , rule 1 , c.p.c.the
court in nathu v. state of state of Cujarat
8
.has held this proposition.


Proviso to order XXIII , rule 1, cpc. Now clearly provides a procedure when plaintiII is a
minor or one oI unsound mind. No such suit shall be allowed to be abdondened without the leave
oI the court. Such applications shall be accompanied by an aIIidavit by the next Iriend and also a
certiIicate Irom the pleader, iI there be any oI the minor or the person oI unsound mind to the

8
AIR 19U72 Guj 35 : 13 Guj LR 276
eIIect that proposed abandonment oI the suit or part oI the claim is beneIicial to the minor or
such other person. When a guardian ad litem without reqwesite permission oI the court
withdraws a suit or abandons it, minor can pray Ior restoration oI suit through a review
application, the order being voidable against all persons accept minor. But when such guardian
Irequently or in collision with otherwise abandons or withdraws a suit, remedy oI minor lies in a
separate suit, not by a review application as order XLVII, rule 1 does not cover a ground oI Iraud
or collusion. It has been laid down in amrit lachman v. luni
9
, Expressing a diIIerent view it has
been held that when a suit by minor is dismissed as withdrawn by the next Iriend without
obtaining the requisite permission oI the court, the minor on attaining majority may have the
dismissal order set aside without prooI oI Iraud . he need not Iile a suit thereIore. In A. perumal
v. R. joyaraman it has been held.
10


(d) Withdrawal by one of the plaintiffs. Rule 1(5)
Where there are two or more plaintiIIs in a suit, the suit or part oI the claim cannot be
abandoned or withdrawn without the consent oI all the plaintiIIs One oI such plaintiIIs, however,
may abandon or withdraw Irom the suit to the extent oI his own interest in it. where there are
more plaintiIIs than one and application Ior abandonment or withdrawal is opposed by co-
plaintiII, the prayer cannot be allowed.
(e) Limitation: Rule 2

A plaintiII withdrawing a suit with liberty to Iile a Iresh suit is bound by the law oI limitation in
the same manner as iI the Iirst suit has not been Iiled at all.



(1) Applicability to other proceedings

(i) Appeals and revisions

9
AIR 1974 PUN199: 1973 cur LJ 647
10
A. perumal v. R. joyaraman
The provisions oI this order apply to withdrawal oI appeals and revisions. The appellant has
a right to withdraw his appeal unconditionally and iI he makes such an application, the court
must grant it, subject to costs, and has no power to say that it will not permit the withdrawal and
will go on with the hearing oI the appeal. Similarly, in appropriate cases, an appellate court can
grant permission to withdraw a suit with liberty to Iile a Iresh suit such power, however, has to
be exercised sparingly and cautiously.

Where the plaintiII sues in a representative character, he cannot abandon or withdraw the suit
or a part oI the claim. He may, however, get out oI the suit, but that does not put an end to the
litigation where other persons are interested in it and have a right to come in and continue the
litigation. Order rejecting an application Ior abdonment or withdrawal must give reasons.
Speaking order giving reasons is essential .in rishna umar v. state of Punjab the court has
laid down this
11
. Mere Iiling oI a petition Ior abdonment oI a suit does not terminate a suit .in
Dhanwate v. shyamrao dattaji court said that suit remains pending till an order on the petition is
passed, court is entitled to consider and pass such order as it thinks Iit and proper in between the
periods.
12


Permission to sue aIresh Ior the subject matter
oI the old suit or part oI claim oI old suit cannot be granted as a matter oI right. The court is to
take into consideration all the Iactors involved in the case and then exercise its discretion in a
judicial manner and then to grant or reject his prayer in


lingraj panda v. sebati bibya.
13
The court in . china varia v. $. Jaria thevar held that
InsuIIiciency oI evidence leading to dismissal is no ground in withdrawal in appeal .
14
the court
is to be satisIied that there exist some Iormal deIect, the suit Iails thereIore or there is suIIicient
ground Ior allowing the plaintiII to Iile Iresh suit . the court in manna kaur v. gurudayal kaur

11
1976 Rew LR 70
12
1975 Mah LJ 337
13
(1971) 2 cut WR 719
14
AIR 1983 mad 160
held that Failure to consider those aspects takes away the jurisdiction oI court to order
withdrawal with liberty to sue aIresh on the same cause oI action .
15
In suit Ior enjectement oI
tenant cause oI action Ior subletting is diIIerent Irom reasonable requirement, when during the
pendency oI suit Ior eviction on the ground oI subletting, the plaintiII 's reasonable requirement
Ior occupation oI the premises arises, the plaintiII may be permitted to withdraw the suit under
order XXIII, rule 2(b) with permission to sue aIresh in respect oI the same subject -matter. it has
been held in geeta bose v. machine tools
1


(iii) Writ petitions
The general principles Ior withdrawal oI suits also apply to petitions under Article 32 or
Article 226 oI the Constitution. Ordinarily, thereIore, a High Court or the Supreme Court would
not reIuse the prayer oI the petitioner or his advocate to allow him to withdraw the petition, iI
such withdrawal is unconditional but he cannot thereaIter institute a Iresh petition on the same
cause oI action. But aIter withdrawing a writ petition without permission to institute a Iresh one,
a party cannot institute a Iresh petition in respect oI the same cause oI action in high court under
article 226, constitution oI India. It is so not on the ground oI res judicata but on the ground oI
the public policy has been held in sarjuga transport v. state transport.
17
Sec. 141, c.p.c. Has
excluded writ proceedings Irom the realm oI civil proceedings, writ application under article
226, constitution oI India should be allowed to be withdrawn when the withdrawal is grounded
on the need to avoid public inconvenience. Thus when a party

moving the high court under article 226, constitution oI India in respect oI route permit
granted by R.T.A. prays Ior withdrawal oI the application to avert public inconvenience,
supreme court allowed the prayer in shaik Hussein v. M.C. kannaiah.
18


(iv) Execution proceedings
The provisions oI Order do not apply to execution proceedings. The court has no power to
allow an application Ior execution to be withdrawn with liberty to Iile a Iresh application.

15
1978 REV LR 432
16
AIR 1991 cal 116
17
AIR 1987 SC 88
18
AIR 1981 SC 1725
Withdrawal oI an application without the permission oI the court to bring a Iresh application
hence is no bar to a Iresh application Ior execution within the period oI limitation. Order XXIII,
rule 4 precludes a party Irom instituting a Iresh suit in respect oI same subject - matter or such
part oI the claim when the plaintiII has abandoned the suit or part oI the claim without any
liberty to sue aIresh or has withdrawn Irom the suit or has withdrawn a part oI the claim under
order XXIII , rule 3 without the consent oI the other plaintiII. There is no bar to instituting a
Iresh suit on the same subject - matter beIore abandonment oI suit or withdrawal under rule 2.
SuIIice iI during the pendency oI second suit the plaintiII abandons their earlier suit or
withdraws Irom the suit under rule 3, C.P.C. the court has held this in girdharilal bansal v.
chairman , ..M. oard
19
.

Order XXIII, rule 2, C.P.C. provides that in
any Iresh suit instituted on permission granted under order XXIII, rule 1, C.P.C. the plaintiII
shall be bound by the law oI limitation in the same manner as iI the Iirst suit had not been
instituted . But in view oI section 14(3) , limitation act, 1963 iI the said suit was allowed to be
withdrawn on account oI a Iormal deIect in the jurisdiction oI the court or other cause oI a like
nature , only then the plaintiIIs were entitled to claim the beneIit oI exclusion oI time in
computing limitation , during which the previous withdrawn suit was pending. OI the court
ordering withdrawal with permission to institute a Iresh suit clearly says that the withdrawn
would have Iailed by

reason oI deIect in jurisdiction or other causes oI like nature, then the plaintiII instituting
Iresh suit would ipso facto be entitled to exclusion oI time under section 14 (1), limitation act.

The court in gurdit $ingh v. munsha $ingh AIR
199 7 $ ) held that In interpreting the words " cause oI like nature" occurring in section 14 (3)
, limitation act, the supreme court observed that the scope oI those words has to be determined
according to the rule oI ejusdem generis . According to that rule , they take their colour Irom the
proceeding words ' deIect oI jurisdiction' which means that the deIect must have been oI an
analogous character barring the court Irom entertaining the previous suit.

19
AIR 1985 Punj 219

(O^T)O^11 OI +1I

(O^T)O^11 OI +1I: )+1 , /

(a) 0307,
In .. hariv. $heshadri,
20
court said that aIter the institution oI the suit, it is open to the
parties to compromise, adjust or settle it by an agreement or compromise. The general principle
all matters which .can be decided in a suit can also be settled by means oI a compromise.

Rule 3 oI Order 23 lays down that (i) where the court is satisIied that a suit has been adjusted
wholly or in part by any lawIul agreement in writing and signed by the parties; or (ii) where the
deIendant satisIies the plaintiII in respect oI the whole or any part oI the subject-matter oI the
suit, the court shall record such agreement, compromise or satisIaction and pass a compromise
decree accordingly.
) vi.{v.ion o{ .ov
where it is proved to the satisIaction oI the court that a suit has been adjusted wholly or in
part by any lawIul agreement or compromise,
21
( in writing and signed by the parties) or where
the deIendant satisIies the plaintiII in respect oI the whole or any part oI the subject - matter oI
the suit , the court shall order such agreement , compromise or satisIaction to be recorded, and
shall pass a decree in compromise or satisIaction to be recorded, and shall pass a decree in
accordance therewith.
It is the duty oI the court to satisIy itselI with regard to the terms oI agreement. The court must
be satisIied that the agreement is lawIul and it can pass a decree in accordance with it. The court
should also consider whether such a decree could be enIorced against all the parties to the
compromise. A court passing a compromise decree perIorms a judicial act and not a ministerial
act. ThereIore, the court must satisIy


20
(1973) 1 SCC761 (777):
21
inserted by C.P.C. (amend.) Act, 1976.
itselI by taking evidence or on aIIidavits or otherwise that the agreement is lawIul. II the
compromise is not lawIul, the court can recall an order recording compromise. In case oI any
dispute between the parties to the compromise, it is the duty oI the court to inquire into and
decide whether there has been a lawIul compromise in terms oI which the decree should be
passed. An agreement or compromise, which is void or voidable under the Indian Contract Act,
1872, shall not be deemed to be lawIul within the meaning oI Rule 3. Under rule 3 as it now
stands, when a claim in suit has been adjusted wholly or in part by any lawIul agreement or
compromise, with a view to protract or delay the proceedings in the suit. Under rule 3 as it now
stands, when a claim in suit has been adjusted wholly or in part by any lawIul agreement or
compromise, the compromise must be in writing and signed by the parties and there must be a
completed agreement between them. To constitute an adjustment, the agreement or compromise
must itselI be capable oI being embodied in a decree. When t he parties ebter into a compromise
during the hearing oI a suit or appeal, there is no reason why the requirement that the
compromise should be reduced in writing in t he Iorm oI
The court 'in recording compromise should not act in a casual manner. Where it is alleged by
one party that a compromise has not been entered into or is not lawIul, it is the duty oI the court
to decide that question.

c) ompromise on behalf of minor
No next Iriend or guardian oI a minor shall, without the leave oI the court, enter into any
agreement or compromise on behalI oI the minor with reIerence to the suit, unless such leave is
expressly recorded in the proceedings.29

d) ompromise by pleader
A pleader stands in the same position as his client with regard to his authority to compromise
the suit. An advocate appearing Ior a party, thereIore, has always an implied authority to enter
into a compromise on behalI oI his client.3D


(e) Representative suit: Rule 3-B
No agreement or compromise in a representative suit can be entered into without the leave oI
the court. BeIore granting such leave, notice to the persons interested should be given by the
court.31

ompromise decree and res judicata-
A compromise decree is not a decision oI the court. It is acceptance by the court oI
something to which the parties had agreed. A compromise decree merely sets the seal oI the
court on the agreement oI the parties. The court does not decide anything. Nor can it be said that
a decision oI the court is implicit in it. Hence, a compromise decree cannot operate as res
fudicata. In some cases, however, it is held that a consent decree would also operate as res
fudicata It is submitted that the Iormer view is correct since, in a consent decree, it cannot be
said that a suit is heard and Iinally decided by the court on merits. Such a decree, however, may
create an estoppel between the parties.

ompromise decree and estoppel

A compromise decree is not a decision on merits, as it cannot be said that the case was
"heard and Iinally decided". Nevertheless, it is based on consent or compromise oI parties and,
thereIore, will operate as an estoppel.

Execution of compromise decree

A consent decree is executable in the same manner as an ordinary decree. But iI the decree
gives eIIect to an unlawIul compromise or is passed by the court having no jurisdiction to pass it,
it is a nullity and its validity can be set up even in the execution. The underlying principle is that
a deIect oI jurisdiction strikes at the very authority oI the court to pass a decree and such a deIect
cannot be cured even by the consent oI parties. Prior to the Amendment Act oI 1976, a
compromise decree could be passed only so Iar as it related to the suit, but, by the Amendment
Act, it is speciIically provided that whether or not the subject-matter oI the agreement,
compromise is

identical with the subject-matter oI the suit, iI it is between the parties and the compromise is
a lawIul one, the court can pass such a decree.
Merely because the court did not give suIIicient
attention to the requirement to R. 3, o. 23, it does not aIIect the decree passed by the court having
jurisdiction to decide the same or it does not mean that the decree is one passes by a court having
no jurisdiction and the executing court cannot go behind the decree. And execution court has no
jurisdiction to record a compromise and dispose oII the execution case in terms oI compromise
Ior order XXIII, rule 3 contemplates the adjustment oI determination oI rights oI the parties in a
suit wholly or in part and the executing court is neither called upon one entitled to adjudicate the
rights oI the parties.
22

In yashodananda garg v. Hindustan commercial bank
23

the court held that it is true that nothing in order XXIII applies to an execution oI decree, yet, the
parties are not precluded Irom agreeing that the decree may be executed in a particular manner. iI
such an agreement is arrived at, the court should be reluctant not to give eIIect to it . Ior the
purpose oI enIorceability and executability all decrees including compromise decrees bear the
same stamp oI authority and incidents . both the decrees stand on the same Iooting in the eye oI
law as one is a Iollow- up oI the verdict as a result oI controversies and the other is the creature
oI the agreement between the parties .where the decree is incapable oI execution , as Ior instance
, where it merely creates a charge on property and does not conIer the power oI sale, a separate
suit is necessary to enIorce the right created by the right created by the decree .unless the terms
oI compromise decree necessarily involve the execution oI a deed oI conveyance also registered
deed is not necessary Ior it's enIorcement.


Compromise by probate proceedings- a compromise between an applicant for probate of a will
and a caveator, which aims at excluding proof of the genuineness of the will, is opposed to
public policy. it is open to a caveator who has entered into a compromise excluding proof of the
genuineness of the will to resale from it to and to require due

proof of the will. An executor who withdraws his application for probate in pursuance of a

22
Bihar Sunni wakI board v. syed basshiruddin AIR 1985 Pat 52
23
AIR 1986 ALL 215
compromise is not debarred from filing another application for probate.

ompromise of guardianship proceedings - a guardian appointed by the court cannot be
removed by compromise . in proceedings under the guardians and wards act Ior the custody oI
minor children their parents may arrive at a compromise . no sanction oI the court is necessary
thereIore though the court should satisIy itselI that the compromise is Ior the beneIit oI the
children. When court passes an order in pursuance oI the compromise, it cannot set aside the
order unless both parties agree to it's being set aside or it is invalid as an agreement .in
proceedings under the guardians and wards act Ior the custody oI minor children their parents
may arrive at a compromise. No sanction oI the court is necessary thereIore though the court
should satisIy itselI that the compromise is Ior the beneIit oI the children. When court passes an
order in unless both parties agree to its being set aside or it is invalid as an agreement.

Appeal - No appeal lies against a decree passed by the court with consent oI parties, nor a suit
can be instituted to set aside a compromise decree the ground that such compromise is not
lawIul. However, Rule l-A (2) oI Order lies down that in an appeal against a decree passed aIter
recording or reIusing to record a compromise, the order recording or reIusing to record a
compromise can also be questioned. A party challenging the compromise can Iile an appeal
under Section 96(1) oI the Code and Section 96(3) shall not bar such an appeal Likewise; Iiling a
suit on the ground oI Iraud, undue inIluence or coercion can challenge such a decree. iI the
compromise agreement is lawIul, the decree to that extent is a consent decree and is not
appealable because oI express bar in sec. 96(3) oI C.P.C. against an appeal would not be
attracted .
24
Where court passes an order or decree under o.23, r.3 on the basis oI compromise
Iiled by the parties and signed by persons having no authority to enter into such compromise, an
appeal would be maintainable against such order or decree passed.
25
The deIendant in second
appeal challenged a compromise decree passed in appeal in terms oI the

compromise reached between the parties on the ground that it was not signed by her and was
only signed by her counsel, but the decree was not attacked on the ground that the counsel was

24
(1989) 1 ACC 101(DB) (RAJ)
25
(1990) 1 Mad LJ 70 (78)
instructed not to compromise the case. The compromise decree, aIter the dismissal oI the second
appeal, becomes Iinal and operates as res judicata and can only be challenged by Iiling a suit
under S.31 oI speciIic relieI act Ior cancellation oI decree.
26


REJI$IOA - Although under this rule the court has power only to record a " lawIul"
compromise, yet, where it requires evidence to be given oI an illegal compromise, it's order is
not open to revision as such order is not likely to cause irreparable injury. No revision will lie
under a decree on a compromise on the ground that the court omitted to the order recording oI
the compromise.

(O)(+1O)

This right is absolute and unqualiIied and the court cannot reIuse permission to withdraw
a suit and compel the plaintiII to proceed with it unless any vested right comes into existence
beIore such prayer is made
27
. However, in case oI such abandonment or withdrawal oI a suit or
part oI a claim without the leave oI the court, the plaintiII will be precluded Irom instituting a
Iresh suit in respect oI the same cause oI action. The plaintiII also becomes liable Ior such costs
as the court may award to the deIendant. Rule 3 oI Order 23 lays down that (i) where the court is
satisIied that a suit has been adjusted wholly or in part by any lawIul agreement in writing and
signed by the parties; or (ii) where the deIendant satisIies the plaintiII in respect oI the whole or
any part oI the subject-matter oI the suit, the court shall record such agreement, compromise or
satisIaction and pass a compromise decree accordingly.


26
AIR 1988 Raj 22 ( 24, 25)