Withdrawal of appeal cannot revive interim protection or dilute a merits dismissal where recovery proceedings were already upheld.

The SC held that when an appeal is permitted to be withdrawn, the court cannot in the same order continue ex parte interim protection, reduce costs, or issue directions that effectively dilute an earlier dismissal on merits. Here, the writ petition had already been dismissed after consideration of the borrower's conduct and the SARFAESI recovery proceedings, so the later appellate directions impermissibly granted indirect relief and neutralised those findings. The Court set aside the protective and diluting directions, vacated the earlier interim order, and left the withdrawal of the appeal undisturbed, while also imposing costs.

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Issues: Whether the Division Bench was justified in continuing the ex parte interim protection, reducing costs, and making observations while permitting withdrawal of the letters patent appeal when the writ proceedings had already been dismissed on merits.

Analysis: The writ petition had been dismissed after substantive consideration of the borrower's conduct and the long-pending recovery proceedings under the SARFAESI framework. The later appellate order, passed when the matter was already before the Supreme Court, permitted withdrawal of the appeal and simultaneously extended the interim stay, reduced the costs, and directed that the future forum should proceed without being influenced by the earlier adverse findings. Such directions had the practical effect of diluting the dismissal on merits and of granting relief indirectly despite withdrawal. The Supreme Court held that this course was impermissible and that the litigant's conduct in repeatedly delaying recovery proceedings could not justify such protective orders.

Conclusion: The impugned directions in the appellate order extending interim relief, reducing costs, and neutralising the earlier findings were set aside, and the earlier ex parte interim order stood vacated.

Final Conclusion: The Supreme Court interfered to the limited extent of undoing the appellate court's protective and diluting directions, while leaving the withdrawal of the appeal undisturbed and imposing costs.

Ratio Decidendi: A court permitting withdrawal of an appeal cannot, in the same order, grant substantive protection or issue directions that effectively nullify an unchallenged merits dismissal or insulated findings, particularly where such relief would amount to an abuse of process.

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