Withdrawal of suit with liberty to refile is unavailable after a merits-based decree absent a formal defect.

Order 23, Rule 1 permits withdrawal of a suit with liberty to file a fresh suit only where the statutory conditions are met, including the presence of a formal defect; it does not authorise reopening a decree passed on merits at the appellate stage. Where the trial court has decided all framed issues and dismissed the suit on merits, the successful party acquires rights that cannot be defeated by allowing the plaintiff to withdraw and re-agitate the same cause of action without a legally recognised basis. In such circumstances, the appellate court lacks jurisdiction to grant withdrawal with liberty to institute a fresh suit, and any such order is invalid.

---

---

Issues: Whether the appellate court could permit withdrawal of a suit with liberty to file a fresh suit after the trial court had dismissed the suit on merits.

Analysis: The trial court had dismissed the suit after deciding all framed issues on merits, thereby conferring rights on the successful party. In such circumstances, permission to withdraw with liberty to institute a fresh suit would allow the plaintiff to re-agitate the same cause of action despite there being no shown formal defect in the original suit. Order 23, Rule 1 was held to permit such withdrawal only during the trial of the suit and not at the appellate stage after a merits-based decree.

Conclusion: The appellate court had no jurisdiction to grant withdrawal with liberty to file a fresh suit in these circumstances, and the impugned order was invalid.

Ratio Decidendi: A suit dismissed on merits cannot be withdrawn at the appellate stage with liberty to file a fresh suit unless the statutory basis for such liberty is made out; Order 23, Rule 1 does not authorise reopening a merits-based decree in the absence of a formal defect.

---