Withdrawal with liberty to refile is not a nullity when made by a competent court, and cannot be attacked collaterally later.

An order granting withdrawal of a suit with liberty to file afresh is not void merely because the statutory conditions for Order XXIII Rule 1(2) were wrongly applied; where the court had jurisdiction over the suit, the order is at most erroneous and remains operative until set aside in direct proceedings. A fresh suit instituted on the basis of that leave is therefore not incompetent, and the later court cannot treat the earlier withdrawal order as a nullity or reopen its legality by collateral attack. The proper remedy is a direct challenge to the earlier order. The note states that the subsequent suit was upheld and the trial court's decree restored with costs.

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Issues: (i) whether an order permitting withdrawal of a suit with liberty to file a fresh suit, made under Order XXIII, Rule 1(2) of the Civil Procedure Code in circumstances not contemplated by the rule, is without jurisdiction and void; (ii) whether a fresh suit instituted on the basis of such leave is incompetent; (iii) whether the court trying the subsequent suit can inquire into the legality or jurisdictional validity of the earlier withdrawal order.

Issue (i): whether an order permitting withdrawal of a suit with liberty to file a fresh suit, made under Order XXIII, Rule 1(2) of the Civil Procedure Code in circumstances not contemplated by the rule, is without jurisdiction and void.

Analysis: Jurisdiction denotes the power to hear and determine a cause. Once a court is competent to try the suit and to make orders of the relevant kind, an erroneous exercise of that power does not destroy jurisdiction. A wrong order may be liable to be set aside in appropriate proceedings, but it is not a nullity merely because the statutory conditions for its exercise were not correctly satisfied. The distinction between absence of jurisdiction and erroneous exercise of jurisdiction was treated as fundamental.

Conclusion: Such an order is not without jurisdiction and is not void.

Issue (ii): whether a fresh suit instituted on the basis of such leave is incompetent.

Analysis: Where the earlier withdrawal order was made by a court having jurisdiction over the suit, the order remains operative unless set aside. It cannot be ignored collaterally, and the liberty granted under it supports the institution of a fresh suit. The fact that the earlier order may have been erroneous does not by itself attract the bar against a subsequent suit.

Conclusion: The fresh suit is not incompetent.

Issue (iii): whether the court trying the subsequent suit can inquire into the legality or jurisdictional validity of the earlier withdrawal order.

Analysis: A court of competent jurisdiction cannot, in the later suit, treat the earlier withdrawal order as a nullity and reopen the question whether the first court should have granted liberty to file a fresh suit. The proper course is a direct challenge to the earlier order in appropriate proceedings, not a collateral attack in the later suit.

Conclusion: The court trying the subsequent suit is not competent to go behind the earlier order on that question.

Final Conclusion: The reference was answered against the challenge to the subsequent suit, and the decree of the trial court was restored with costs.

Ratio Decidendi: An order made by a court having jurisdiction over the suit is not a nullity merely because it was passed on an erroneous view of the statutory conditions governing that order; such an order remains effective until set aside in direct proceedings and cannot be impeached collaterally in a later suit.

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