Order 23, Rule 1 of the Civil Procedure Code deals with withdrawal of the suits (it is reproduced at the end of this answer). Sub-rule (4) of this Rule lays down that if the plaintiff abandons any suit or withdraws from a suit without the permission of the court with liberty to file a fresh suit in respect of the subject-matter of such suit, then he shall be precluded from instituting any fresh suit in respect of such subject-matter. Thus, in such a situation, he is not allowed to file a fresh suit.
However, if the plaintiff withdraws the suit with permission of the court with a liberty to file a fresh suit [in terms of sub-rule (3) of the said Rule], then he is entitled to file a fresh suit. In such a situation, the principle of res judicata would not come in his way.
In fact, as per Section 11 of the CPC itself, res judicata is applicable when the previous suit “has been heard and finally decided by such Court“. If such suit was withdrawn by the party with liberty to file a fresh suit, then it cannot be said that the previous suit was heard and finally decided. In such case, therefore, res judicata would not apply.
Order 23, Rule 1 of the CPC is reproduced below, for your information:
“1. Withdrawal of suit or abandonment of part of claim.— (1) At any time after the institution of a suit, the plaintiff may as against all or any of the defendants abandon his suit or abandon a part of his claim:
Provided that where the plaintiff is a minor or other person to whom the provisions contained in Rules 1 to 14 of Order XXXII extend, neither the suit nor any part of the claim shall be abandoned without the leave of the Court.
(2) An Application for leave under the proviso to sub-rule (1) shall be accompanied by an affidavit of the next friend and also, if the minor or such other person is represented by a pleader, by a certificate of the pleader to the effect that the abandonment proposed is, in his opinion, for the benefit of the minor or such other, person.
(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) Where the plaintiff—
(a) abandons any suit or part of claim under sub-rule (1), or
(b) withdraws from a suit or part of a claim without the permission referred to in sub-rule (3),
he shall be liable for such costs as the Court may award and shall be precluded from instituting any fresh suit in respect of such subject-matter or such part of the claim.
(5) Nothing in this rule shall be deemed to authorise the Court to permit one of several plaintiffs to abandon a suit or part of a claim under sub-rule (1), or to withdraw, under sub-rule (3), any suit or part of a claim, without the consent of the other plaintiffs.”
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