IMPORTANT POINT
Provisions of Order 23 Rule 1 CPC have been specifically enacted in order to remove any possible doubt as to meaning of words “formal defect”.

Dr. A.K. Rath, J.—Cleavage of decisions between the two coordinate Benches on the interpretation of sub-rule (3) of Rule 1 Order 23 CPC in the case of Babrak Khan v. A. Shakoor Muhammad, (1954) 20 CLT 642 and Atul Krushna Roy v. Raukishore Mohanty and Others, AIR 1956 Orissa 77, necessitated one of us (Dr. A.K. Rath, J) to refer the matter to the larger Bench.

2. The following question of law has been referred for our decision:—

“Whether the expression “sufficient grounds” occurring in clause (b) of sub-rule (3) of Rule 1 of Order 23 CPC should be construed ejusdem generis with the words “formal defect” mentioned in clause (a) of the said sub-rule and withdrawal of suit can be permitted only if the defect is analogous to a formal defect ?”

3. Sub-rule (3) of Rule 1 Order 23 CPC, which is hub of the issue, is quoted hereunder;

“1. Withdrawal of suit or abandonment of part of claim.—(1) & (2) xxx xxx xxx

(3) Where the Court is satisfied,—

(a) that a suit must fail by reason of some formal defect, or

(b) that there are sufficient grounds for allowing the plaintiff to institute a fresh suit for the subject matter of a suit or part of a claim, it may, on such terms as it thinks fit, grant the plaintiff permission to withdraw from such suit or such part of the claim with liberty to institute a fresh suit in respect of the subject-matter of such suit or such part of the claim.”

4. The word ‘or’ appearing in after clause (a) and before clause (b) clinches the issue.

5. In Babrak Khan, learned Single Judge, relying on the decision of the Privy Council in the case of Chhaju v. Neki AIR 1922 P.C 112, held that “sufficient grounds” occurring in clause (b) of sub-rule (2) of Rule 1 of Order 23 should be construed ejusdem generis with the words “formal defect” mentioned in clause (a) of the said sub-rule and withdrawal could be permitted only if the defect was analogous to a “formal defect”.

6. An identical question came up for consideration in Atul Krushna Roy. The learned Chief Justice held that the expression “other sufficient grounds” need not be restricted to only formal defects or those analogous thereto. The words are wide enough to embrace other defects as well. It was held that the provisions of Order 23 Rule 1 CPC have been specifically enacted in order to remove any possible doubt as to the meaning of words “formal defect”. The Legislature, in putting the two expressions separately in the two sub-rules, intended that the “other sufficient grounds” occurring in clause (b) need not be of a formal character. Though the decision in the case of Babrak Khan was drawn to the attention of the Bench, the learned Chief Justice came to hold that there is no justification for restricting the meaning of the expression “other sufficient grounds” only to formal defects or those analogous thereto. It was further held that the doctrine of ejusdem generis has been pushed too far in some cases. The expression “other sufficient grounds” need not necessarily be restricted to defects of a formal character and that the words are wide enough to embrace other defects as well.

7. The Reference Bench came to hold that the ratio in Atul Krushna Roy runs contrary to Babrak Khan, whereafter the Hon’ble Chief Justice has placed the matter before this Bench.

8. We have heard Mr. Prafulla Kumar Rath, learned counsel for the petitioners and Mr. Soumya Mishra, learned counsel for the opposite parties.

9. In K.S. Bhoopathy and Others v. Kokila and Others, (2000) 5 SCC 458: (2000) 4 Supreme 236., the Apex Court held that grant of leave envisaged in sub-rule (3) of Rule 1 is at the discretion of the Court, but such discretion is to be exercised by the Court with caution and circumspection. The legislative policy in the matter of exercise of discretion is clear from the provisions of sub-rule (3) in which two alternatives are provided; first where the Court is satisfied that a suit must fail by reason of some formal defect, and the other where the Court is satisf