Liberty to file afresh must be granted for curable formal defects under Order XXIII CPC.

The Appellant instituted a commercial suit on 01.12.2025 seeking a declaration that certain cash receipts relied upon by Respondent No. 1 were fabricated, alongside injunctive relief

The Appellant sought exemption from pre-institution mediation under Section 12A of the Commercial Courts Act, 2015

On 03.12.2025, the Commercial Court rejected the interim relief application, citing non-compliance with Section 12A, deficient court fees, and a failure to show a bona fide cause of action

Consequently, the Appellant sought to withdraw the suit with liberty to file afresh after curing these procedural defects

By the impugned order dated 15.12.2025, the Commercial Court allowed the withdrawal but refused liberty to file a fresh suit, observing that the withdrawal reflected a lack of genuine cause of action

1. Whether the Commercial Court was justified in refusing to grant liberty to the Appellant to withdraw the suit with permission to institute a fresh suit under Order XXIII Rule 1(3) of the CPC

2. Whether the Commercial Court exceeded its jurisdiction by recording conclusive findings on the merits of the dispute at the pre-summoning stage

The court applied Order XXIII Rule 1(3) of the CPC, which permits withdrawal with liberty to file afresh if a suit fails due to a "formal defect" or "sufficient grounds"

It relied on V. Rajendran v. Annasamy Pandian (2017), which held that "formal defect" includes procedural errors like insufficient court fees, improper valuation, or lack of notice

Regarding the rejection of plaints, the court applied the principles of Order VII Rule 11 CPC and precedents such as Popat and Kotecha Property v. State Bank of India Staff Association (2005) and Dahiben v. Arvindbhai Kalyanji Bhanusali (2020), which restrict the court’s inquiry to the averments in the plaint without adjudicating merits at the threshold

Furthermore, T. Arivandandam v. T.V. Satyapal (1977) was cited to emphasize that the power to reject a plaint is a drastic measure reserved for manifestly vexatious or meritless claims

The High Court observed that the defects identified by the Commercial Court—namely deficiency in court fees and non-compliance with Section 12A—constitute "formal defects" within the meaning of Order XXIII Rule 1(3) CPC and are inherently curable

The Court reasoned that since the suit was at the pre-summoning stage, no vested rights had accrued to the defendants, and procedural law should facilitate adjudication on merits rather than foreclose remedies due to curable defects

The High Court found that the Commercial Court erroneously conflated its jurisdiction under Order XXIII with that of Order VII Rule 11 by recording observations on the lack of bona fides and merit at the pre-summoning stage

By denying liberty, the trial court effectively non-suited the Appellant through the bar under Order XXIII Rule 1(4) CPC, which the High Court deemed "unduly harsh" and a failure to exercise judicial discretion in accordance with settled principles

The Court set aside the impugned order dated 15.12.2025 and all observations regarding the merits of the case

The appeal was allowed, and the Appellant was granted permission to withdraw the suit with liberty to institute a fresh suit in accordance with the law

It was clarified that the judgment does not reflect an expression on the merits of the dispute