I.A. No. 75/2016 in C.P. No. 285/2013. Case: Chotoo Sud Vs Bhagwan Finance Corporation Private Ltd. and Ors.. Company Law Board

Order:

Vijai Pratap Singh, Member (J), (Kolkata Bench)

1. I.A. No. 75/2016 has been filed by applicant Shri Chotoo Sud in C.P. No. 285/2013 with the prayer that he be permitted to withdraw C.P. No. 285/2013 and refiling the same, on the ground that he has filed this petition under Section 634A of the Companies Act, 1956, which was numbered as C.P. No. 285/2013. On or about 1st June 2016, while the aforesaid proceedings was pending before the Company Law Board, which was dissolved and the National Company Law Tribunal came into existence by notification dated 08/06/2016. Matters pending before the Company Law Board were transferred to National Company Law Tribunal and it has to be disposed of in accordance with the provisions of Companies Act, 2013. Petitioner has stated that proviso to section 634A of the Companies Act, 1956 provides that this provision of section shall not apply on and after the commencement of the Companies (Second Amendment) Act, 2002. To avoid any ambiguity the petitioner prayed that permission be granted to withdraw C.P. No. 285/2013 and sought liberty to re-file the same under appropriate provisions of the Companies Act, 2013.

2. Ld. Counsel for the respondent No. 1 has relied on case law of Hon'ble Calcutta High Court reported in 2016 (3) CLJ (Cal) 592. In the above mentioned case the Hon'ble Calcutta Court has observed that in K.S. Bhoopathy vs. Kokila, (Hon'ble Supreme Court has laid down the law that grant of leave envisaged in sub-rule (3) of Rule 1 of Order XXIII is a discretion of the Court but such discretion is to be exercised with caution and circumspection.

3. The Hon'ble Calcutta High Court has relied on the K.S. Bhupati case of Hon'ble Supreme Court and held that while exercising discretion under Order XXIII, Rule 1, the Court has to consider all relevant aspects of the matter including the desirability of permitting the party to start a fresh round of litigation on the same cause of action. This becomes all the more important in a case where the plaintiff seeks to withdraw the suit at the stage of appeal. Grant of leave in such a case would result in the unsuccessful plaintiff to avoid the decree against him and seek as fresh adjudication of the controversy on a clean slate. It may also result in the contesting defendant loosing the advantage of adjudication of the dispute by the Court or Courts below. Grant of permission for withdrawal of a suit with leave to file a fresh suit may also result in...