Withdrawal with liberty to refile: costs need not be paid before filing a fresh suit unless the order expressly requires it.

Costs imposed when a suit is withdrawn with liberty to file afresh under Order XXIII rule 1(3) CPC need not be treated as an inflexible pre-filing condition unless the withdrawal order expressly so states. If prior deposit is not specifically required, the defect is curable by payment within the reasonable time allowed by the court dealing with the fresh suit, consistent with section 148 CPC and a liberal approach to substantive justice. The subsequent suit is therefore not void or incompetent merely because the costs were not deposited before institution; payment within the time granted was sufficient, and the contrary view was rejected.

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Issues: Whether costs imposed while granting leave to withdraw a suit with liberty to file a fresh suit had to be deposited before institution of the fresh suit, and whether failure to do so rendered the subsequent suit void or incompetent.

Analysis: Leave to withdraw with liberty to institute a fresh suit under Order XXIII rule 1(3) of the Code of Civil Procedure, 1908 permits the court to impose terms, including costs. Such costs do not necessarily operate as an inflexible condition precedent to the very filing of the fresh suit. If the order does not expressly require prior deposit, the defect can be cured by payment or deposit within a reasonable time fixed or extended by the court before which the second suit is pending. A liberal construction consistent with the spirit of section 148 of the Code of Civil Procedure, 1908 is preferred over a hypertechnical view that would defeat substantive justice.

Conclusion: The subsequent suit was not void or incompetent merely because the costs were not deposited before filing; payment within the time allowed by the trial court was sufficient, and the High Court was wrong to hold otherwise.

Final Conclusion: The appeal succeeded, the High Court's order was set aside, and the trial court's order holding the suit maintainable was restored.

Ratio Decidendi: Costs imposed while granting withdrawal with liberty to file afresh need not be treated as a mandatory pre-filing condition unless the order expressly so provides; non-payment at filing is curable by payment within a reasonable time allowed by the court.

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