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Allu Appalaswamy and ors. Vs. Maturi Anjaneyulu and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtAndhra Pradesh High Court
Decided On
Case NumberCivil Revn. Petn. No. 1145 of 1971
Judge
Reported inAIR1974AP268
ActsCode of Civil Procedure (CPC), 1908 - Sections 23 - Order 23, Rule 1(1)
AppellantAllu Appalaswamy and ors.
RespondentMaturi Anjaneyulu and ors.
Appellant AdvocateM. Jagannadha Rao, Adv.
Respondent AdvocateC. Poornaiah, Adv.
Excerpt:
.....not wanted to proceed further with suit - withdrawal of suit must be considered as its dismissal - suit dismissed in respect of one defendant ought to have been dismissed against all - held, suit filed must be taken as dismissed and respondent not entitled to transpose himself as plaintiff in same. - motor vehicles act (59 of 1988)section 149 (2): [v. gopala gowda & jawad rahim, jj] insurers entitlement to defend the action joint appeal by insured and insurer - held, the language employed in enacting sub-section (2) of section 149 appears to be plain and simple and there is no ambiguity in it. it shows that when an insurer is impleaded and has been given notice of the case, it is entitled to defend the action only on grounds enumerated in sub-section (2) of section 149 of the act,........... the appellate court's order therefore cannot be allowed to be sustained.18. for the reasons given above , we would allow the civil revision petition and set aside the judgment of the appellate court. we hold the plaintiff's suit dismissed as against all the defendants . in view of the circumstances of the case, we leave the parties to bear their own costs throughout.19. petition allowed .
Judgment:

Ekbote, C. J.

1. O. S. 184/68 was a suit filed by the Revision petitioner for dissolution of a partnership and settlement of accounts. There were in all five defendants. They seemed to have filed a written statements. Issues were framed. Plaintiff was examined as P. W. 1.

2. It is at this stage on 13-10-1969 the plaintiff's counsel represented to the Court that the plaintiff on the one hand and defendants 1, 3, 4 and 5 on the other have arrived at a compromise and that the plaintiff desires to give up his case as against the 2nd defendant .

3. I. A. No. 1007 of 1969 was filed by the plaintiff for recording the compromise between the parties excluding the 2nd defendant .

4. The 2nd defendant filed I. A. No. 1025/69 under Order 1, Rule 10, C. P. C. requesting the court to transpose him as the 2nd plaintiff and transpose the plaintiff as the 6th defendant .

5. There was yet another application filed by the 1st defendant I. A. No. 1026 of 1969 . He requested the Court to dismiss the suit according to the terms of the compromise and direct the 2nd defendant to institute a suit to enforce his right if any .

6. The trial Court dismissed the 2nd defendant's application i.e., I. A. No. 1025/69. We are not concerned with the reason because nothing turns upon that . I. A. No. 1007/69 was allowed and the compromise was recorded. I. A. No. 1026/69 also was allowed. Specifically , however , the Court did not say that the suit of the plaintiff is dismissed as against the 2nd defendant as he was given up by the plaintiff. Nor the trial Court has expressly said that in view of the terms of the compromise the plaintiff's suit stands dismissed as against the other defendants.

7. Nevertheless, the 2nd defendant aggrieved by the orders passed by the trial Court preferred an appeal to the Sub-Court preferred an appeal to the Sub-Court. The Sub-Court allowed the appeal and directed the trial Court to proceed with the suit and allow the 2nd defendant to lead evidence even if the plaintiff does not want to proceed with the case. This conclusion was based on the assumption that in a suit for dissolution of partnership all the partners stand in the position of the plaintiff and each one of them can proceed with the suit as he is ultimately entitled to a decree in case he is found entitled to it.

8. It is to question the validity of this order of the appellate Court that the present revision petition was filed.

9. When it came before our learned brother V. Madhava Rao, J. the learned Judge thought that there is a conflict between the two decisions of Justice Y. Venkateswara Rao, one reported in Sri Ramamurthy v. Rajiah, (1969) 1 APLJ 138 and C. M. A. No. 214/64 dated 23-4-1970, short noted in Andhra Pradesh High Court 1971 page 134. He, therefore, referred the matter to a Bench and that is how it has come before us.

10. Now, under Order XXIII, Rule 1, C. P. C. at any time after the institution of a suit, the plaintiff may, as against all or any of the defendants, withdraw his suit or abandon part of his claim. According to sub-rule (2), where the Court is satisfied about the defects in the suit, it may , on such terms as it thinks fit, grant the plaintiff permission to withdraw from such suit or abandon such part of a claim with liberty to institute a fresh suit in respect of the subject-matter of such suit or such part of a claim . What follows this provision of law is that it is only when the plaintiff desires to file a fresh suit in respect of the same subject-matter or part of it that the permission of the Court is required. In other cases. the plaintiff is free to either withdraw the suit or abandon part of his claim as against all or any of the defendants. It is only in pursuance of this provision of law that the plaintiff abandoned the suit as against the 2nd defendant . It require any permission of the Court to dismiss the suit as abandoned against the 2nd defendant. Even in regard to the other defendants, although a compromise memo was filed, there was nothing in the terms of compromise which required a decree to be passed by the trial Court. In fact the application of the 1st defendant was that the suit should be dismissed in terms of the compromise. The recording of compromise would not alter the position that what was desired by the plaintiff was to withdraw his suit without the leave of the Court to institute a fresh suit as against all the defendants excluding the 2nd defendant because as against him, the plaintiff had already abandoned his claim. In any case, the compromise admittedly did not come under Order XXIII, Rule 3, C. P. C. but it came only under Order XXIII, Rule 1, C. P. C. It is fairly clear that a withdrawal under sub-rule (1) may be in any form ; where the plaintiff enters into a compromise with the defendants but does not communicate the terms of compromise to the Court , he is held to have withdrawn his suit under sub-rule (1). Similarly, where a suit is dismissed at the request of the parties on a memo of compromise filed , the dismissal operates as a withdrawal of the suit under sub-rule (1). The result therefore was that although the trial Court had not specifically stated that the suit of the plaintiff would be dismissed in terms of the compromise even as against all the defendants other than the 2nd defendant, it will be deemed to have been so dismissed. In that view of the matter , it was really unnecessary for the 2nd defendant to go in appeal . He was perhaps justified in going in appeal because of the vague orders passed by the trial Court . If the trial Court had been a little more careful and explicit in its order the litigation which proceeded further could have been very well avoided.

11. That being the position of the facts, we have now to consider whether the order of the appellate Court remanding the case for trial of the suit as against 2nd defendant is right in law. It is true that the apparent conflict in the said two decisions will have to be resolved.

12. In (1969) 1 APLJ 138 , Venkateswara Rao , J. observed :--

'It is of course normally open to a plaintiff to say that he does not propose to prosecute the suit and withdraw from the same in which case the court would have no option except to dismiss the suit but the instant case is not one such as all the partners including defendants 1 to 3 are in the position of plaintiffs having regard to the fact that the suit itself is laid for dissolution of a firm and settlement of its accounts. It is not only the plaintiff but also the defendants that are entitled to have their rights, if any , enforced in suits for settlement of accounts, dissolution of partnership and the like .'

While making this observation, the learned Judge's attention does not seem to have been drawn, to any decision of any Court. While the learned Judge is perfectly the right in saying that normally it is always open to a plaintiff to withdraw a suit or abandon a part of his claim according to Order XXIII, Rule 1 , C. P. C. but the subsequent unqualified observation which appears has raised the question as to whether even before the passing of a preliminary decree in partnership suits, the defendants could be said to have had a right to continue the suit even though the plaintiff desires to withdraw the suit under sub-rule (1). The learned Judges has not dilated in detail upon this aspect of the question at all.

13. The other observation is :

'So , even if the plaintiff should refrain from participating in the suit after it is remanded to the trial Court, it would be open to the first defendant to lead evidence to substantiate his case and claim such relief as might be found entitled to against the plaintiff .'

This observation also depends upon the question as to whether the first referred to observation is wholly correct.

14. The learned Judge himself was concerned with the same question in another case not fully reported , C. R. P. No. 2108 of 1963 and C. M. A. No. 214 of 1964 dated 23-4-1970 (Andh. Pra) . In that case, the attention of the learned Judge was drawn to several decided cases on this question including that of the Supreme Court reported in M/s Hulas Rai v. K. B. Bass & Co., : [1967]3SCR886 . After elaborately considering the decision , the learned Judge came to the conclusion that in such suits , it is only when a preliminary decree is passed that it could create rights in all the parties and afterwards it will not be open to the plaintiff to withdraw the suit as it would affect the rights which have accrued to the other parties because of the existence of the preliminary decree. The learned Judge observed :

'It is therefore abundantly clear that unless and until a preliminary decree declaring the rights of the defendant has been passed or some rights have accrued in favour of the defendant or are acquired by him by means of compromise or the like , there cannot be any valid objection against the plaintiff's right to withdraw the suit at his pleasure under Order XXIII, Rule 1 subject of course to the obligation of paying costs to the defendant if he is so directed by the Court .'

15. Apparently this decision conflicts with the first. If the scope of the first decision is confined to only cases where preliminary decree is passed, then there would be no difficulty in holding that both the decisions run on parallel lines. On the other hand , if the unqualified observation of the learned Judge is to be interpreted in the light of the facts of that case, to mean that even before passing of the preliminary decree, the plaintiff cannot withdraw with suits , then it would certainly be inconsistent with his subsequent decision and wrong in law. The first decision therefore has to be understood in the light of the second decision and has to be confined to cases where the preliminary decree in a partnership suit has been passed. It is only in such type of cases that the plaintiff would not be at liberty to withdraw his suit as the other parties , being in the position of plaintiffs can continue the suit. Nothing prevents the plaintiffs however , from withdrawing or abandoning such a suit before a preliminary decree is passed.

16. If the said two decisions are understood in the way in which we have tried to understand them, then the conclusion drawn by the learned Judge would be fully in accord with the Supreme Court decision in : [1967]3SCR886 . In that case it was observed at page 113 ;

'The language or Order 23 , Rule 1 , sub-rule (1), C. P. C. gives an unqualified right to a plaintiff to withdraw from a suit is sought under sub-rule (2) of that Rule , the plaintiff becomes liable for such costs as the Court may award and becomes precluded from instituting any fresh suit in respect of that subject-matter under sub-rule (3) of that Rule. There is no permission to withdraw the suit in such circumstances and to compel the plaintiff to proceed with it . It is , of course, possible that different considerations may arise where a set-off may have been claimed under Order 8, C. P. C. or a counter-claim may have been filed, if permissible by the procedural law applicable to the proceedings governing the suit.'

The learned Judges then referred to Seethai Achi v. Meyappa Chettiar , AIR 1934 Mad 337, and quoted a passage from the said decisions. As there was some misunderstanding in regard to that passage , the learned Judges clarified the position by observing :

'We do not think as urged by the learned counsel, that the learned Judges of the Madras High Court were laying down the principle that , in a suit for accounts, a defendant is always entitled to relief in his favour and that the withdrawal of such a suit by the plaintiff cannot be permitted to terminate the suit. In the context in which that Court expressed its opinion about suits for accounts, it clearly intended to lay down that the dismissal of the suit on plaintff's withdrawal is not to be necessarily permitted, if the defendant has become entitled to a relief in his favour. But such a right, if at all, can in no circumstances be held to accrue before a preliminary decree for rendition of accounts is passed. In fact , in mentioning suits for partition and suits for accounts, the Court was keeping in view the circumstances mentioned in the earlier sentence which envisaged that a preliminary decree had already been passed defining rights of parties .'

Finally the Supreme Court said :

'In any case , we do not think that any defendant in a suit for rendition of accounts can insist that the plaintiff must be compelled to proceed with the suit at such a stage as the one at which the respondent in the present case applied for withdrawal of the suit.'

17. Respectfully following the said decision, we find no difficulty in holding in the compelling the plaintiff to continue his suit as against defendant No. 2 although he had categorically abandoned ought to have therefore dismissed the plaintiff's suit as against the 2nd defendant under Order XXIII, Rule 1 , C. P. C. As stated earlier , the plaintiff's suit ought to have been dismissed as against all the other defendants in view of the terms of the compromise which was recorded . The appellate Court's order therefore cannot be allowed to be sustained.

18. For the reasons given above , we would allow the Civil Revision Petition and set aside the judgment of the appellate Court. We hold the plaintiff's suit dismissed as against all the defendants . In view of the circumstances of the case, we leave the parties to bear their own costs throughout.

19. Petition allowed .


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