- 1 - HC-KAR NC: 2025:KHC:48094 WP No. 26083 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF NOVEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE PRADEEP SINGH YERUR WRIT PETITION NO. 26083 OF 2025 (GM-CPC) BETWEEN: BHARATH HI-TECH BUILDERS PRIVATE LIMITED HAVING ITS REGISTERED OFFICE ADDRESS AT: 304 & 306, 3RD FLOOR GOLD TOWERS N0.50 RESIDENCY ROAD BANGALORE KARNATAKA - 560 025. REPRESENTED BY ITS AUTHORIZED SIGNATORY/SENIOR EXECUTIVE, MR.VANAPALLI REVANTH KUMAR REGISTRATION UNDER SECTION 13(5) OF THE COMPANIES ACT, 2013. …PETITIONER (BY SRI ARJUN RAO, ADVOCATE) AND: OSWAL MINERALS LIMITED HAVING ITS CORPORATE OFFICE AT: OSWAL'S, 1034 2ND FLOOR DR.RAJKUMAR ROAD 4TH BLOCK, RAJAJINAGAR Digitally signed by GAVRIBIDANUR SUBRAMANYA GUPTA SREENATH Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:48094 WP No. 26083 of 2025 BENGALURU KARNATAKA - 560 010 REGISTRATION UNDER COMPANIES ACT. HAVING ITS REGISTERED OFFICE ADDRESS AT: 8/11, POLICE STATION ROAD, PALLAVARAM CHENNAI-43 VARAM TAMIL NADU - 600 043. ALSO AT: FLAT NO.F4 HIGHWAY TOWERS DOOR NO.45-40-54 AKKAYYAPALEM MAIN ROAD VISAKHAPATNAM ANDHRA PRADESH - 530 016. …RESPONDENT (BY SRI DHRUV M. PATWARI, ADVOCATE FOR C/R) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE ORDER DATED 21.07.2025 PASSED ON I.A.NO.10 IN COM.O.S.NO.420/2025 BY THE ADDITIONAL CITY CIVIL AND SESSIONS JUDGE COMMERCIAL COURT (CCH-83), BENGALURU (ANNEXURE-B) AND ETC. THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: - 3 - HC-KAR NC: 2025:KHC:48094 WP No. 26083 of 2025 CORAM: HON'BLE MR. JUSTICE PRADEEP SINGH YERUR ORAL ORDER Heard Sri Arjun Rao, learned counsel for petitioner and Sri Dhruv M.Patwari, learned counsel for caveator- respondent. 2. This petition is filed by the petitioner-plaintiff aggrieved by the order dated 21.07.2025 passed on I.A.No.10 in Com.O.S.No.420/2025 by LXXXII Additional City Civil and Sessions Judge, Bengaluru and consequently, allow the said application. 3. Parties are referred to as per their status before the Commercial Court. 4. The petitioner is the plaintiff, who has instituted a suit in Com.O.S.No.420/2025 against the defendants before the Commercial Court seeking the following reliefs: "A. Declaring that the Letters of Credit dated 16.11.2024, 25.11.2024, and 10.12.2024 are void and inoperative; - 4 - HC-KAR NC: 2025:KHC:48094 WP No. 26083 of 2025 B. Granting a decree of permanent perpetual injunction restraining Defendant No.2 from making any payment / disbursal under the Letters of Credit dated 16.11.2024, 25.11.2024, and 10.12.2024; C. Granting the Plaintiff a decree of mandatory injunction directing the Defendants to jointly and severally return all original and other documents connected with the transaction subsequent to the Proforma Invoices dated 24.10.2024, 24.10.2024, and 21.11.2024, including the Letters of Credit dated 16.11.2024, 25.11.2024, and 10.12.2024 to the custody of the Plaintiff; D. Grant a decree of damages directing the Defendant No.1 to pay to the Plaintiff damages of Rs.6,45,525 with interest at 18% per annum from the date of the arising from 24.10.2024 until realization all in the interests of justice and equity; and E. Grant such other and further reliefs as this Hon'ble Court deems fit and proper under the circumstances of this case in the interests of justice and equity, including the costs of this suit." - 5 - HC-KAR NC: 2025:KHC:48094 WP No. 26083 of 2025 5. On service of notice, defendant No.1 appeared and filed his written statement. 6. It is stated that the plaintiff had filed I.A.Nos.2 and 3 seeking, inter alia, temporary injunction restraining defendant Nos.2 and 3 in the suit from acting under or giving effect to the suit subject Letters of Credit, which came to be allowed by the Commercial Court on 21.03.2025. Thereafter, defendant No.3 had filed an applications in I.A.Nos.5 and 6 seeking vacation of the interim order dated 21.03.2025 passed by the trial Court. However, the Commercial Court kept the said order in abeyance till disposal of I.A.Nos.5 and 6. 7. In the meanwhile, defendant No.1 has challenged I.A.Nos.2 and 3 by filing a Commercial Appeal in No.234/2025 before the Division Bench of this Court, which came to be remitted back to the Commercial Court to decide the matter, as the order was passed on the said applications without hearing or notifying the defendants. - 6 - HC-KAR NC: 2025:KHC:48094 WP No. 26083 of 2025 8. After hearing the arguments, the Commercial Court ordered to keep its order dated 21.03.2025 in abeyance and thereafter, despite the request being made for an extension of interim order, the same was not done. Therefore, the interim order no longer exists. 9. This being the state of affairs, defendant No.3 filed a writ petition in W.P.No.17237/2025 before this Court, asserting that the Union Bank was solely at fault for non- payment despite confirming the Letters of Credit and no injunction operating and after receiving the money, turned against the defendants instead of proceeding against the Union Bank. Therefore, such conduct was arbitrary and just prejudicial to the interest of the defendants. However, the said writ petition came to be disposed of by this Court. 10. In the meanwhile, the plaintiff has filed an application in I.A.No.10 under Order XXIII Rule 1(3) read with Section 151 CPC seeking the following relief. "For the reasons stated in the accompanying Affidavit, it is humbly prayed that this Hon'ble Court - 7 - HC-KAR NC: 2025:KHC:48094 WP No. 26083 of 2025 may kindly be pleased to permit the Plaintiff to withdraw the present Suit with liberty to institute a fresh suit against the same/related cause of action against Defendant No.1, in the interests of justice and equity." 11. The affidavit was also annexed to the said application, wherein at paras-5, 6, 9, 10, 11, 12 and 15 it is stated as under: "5. I state that the Plaintiff had filed IA Nos.2 and 3 seeking inter alia a temporary injunction restraining Defendant Nos.2 and 3 from acting under the Suit Subject Letters of Credit. Arguments on the said Applications were heard on 03.06.2025, and the Applications were reserved for Orders on 13.06.2025. On 13.06.2025, the Defendant No.1 filed a memo enclosing an email dated 03.06.2025 showing that on 03.06.2025, the Defendant no.1 had instructed the warehouse agent to hand over the subject goods in favour of the Plaintiff. As such, it is clear that until 12.06.2025, Defendant No. 1 was obstructing and objecting to the handover of goods. Now, the Defendant No.1 has itself placed on record communications establishing that as on 03.06.2025, it is no - 8 - HC-KAR NC: 2025:KHC:48094 WP No. 26083 of 2025 longer obstructing/objecting to delivery of the subject goods in favour of the Plaintiff. 6. Upon filing of the Memo dated 13.06.2025, this Hon'ble Court deferred the Orders on IA Nos.2 and 3, and listed the matter on 24.06.2025 for Plaintiff's reply to the said Memo. Order dated 13.06.2025 of this Hon'ble Court was assailed by the Defendant No.3 in WP No.17237/2025 before the Hon'ble High Court of Karnataka. 9. I state that in the above background, there have been significant material facts and developments that have emerged which require a comprehensive equity collection and collation of facts and material, and seeking of further consequential relief against Defendant No.1. 10. I state that the scope and nature of damages suffered by the Plaintiff go far beyond the limited monetary relief claimed in the present suit. It has now become necessary for the Plaintiff to institute a fresh suit asserting its claims comprehensively, including but not limited to, damages arising from breach of assurances by Defendant No.1, usance interest and bank charges levied by Defendant No.2 while acting under the Letters of Credit, losses suffered due to delay and obstruction in delivery of goods by Defendant No.1, and other consequential and incidental claims as may be - 9 - HC-KAR NC: 2025:KHC:48094 WP No. 26083 of 2025 determined upon collation of records by the Plaintiff including but not limited to, any losses incurred in the value/sale price of the goods due to the acts of Defendant No.1. 11. I state that the Plaintiff is in the process of gathering the relevant documents, correspondence, accounting records, etc. A complete, properly framed, and comprehensive suit is therefore necessary to effectively prosecute its claims. I state that the pleadings and prayers of the present Suit are not sufficient to place on record the entirety of the cause of action, grievances, and all the relief that the Plaintiff is entitled to against Defendant No.1. 12. In this background, the Plaintiff humbly submits that the Plaintiff seeks to file a fresh comprehensive suit seeking comprehensive relief including damages against Defendant No.1. In any event, the various prayers regarding injunction on the Letters of Credit, etc no longer survives, and the pleadings in the present Suit are also primarily in the context of Letters of Credit. As such, it would be impractical to simply seek adjournment and continue the present Suit rather than filing a proper and comprehensive fresh suit. - 10 - HC-KAR NC: 2025:KHC:48094 WP No. 26083 of 2025 15. I state that the withdrawal of the present Suit is not being sought due to any defect in the cause of action or due to any waiver of rights or claims by the Plaintiff, but only to permit the Plaintiff to place all its claims in a single, self-contained suit so as to remain in compliance with the provisions of Order 2 Rule 2 of the CPC." 12. Learned counsel for defendants has objected to the above said application by contending that there is serious fraud and suppression of material facts. Based on which, the Commercial Court has allowed the application and dismissed the suit as withdrawn denying grant of liberty, thereby dismissed the suit without granting liberty to the plaintiff. 13. Learned counsel for plaintiff contended that an application filed by the plaintiff is simpliciter for withdrawal of the suit with liberty to initiate a fresh suit, in view of the averments made in the affidavit annexed to the application, which is narrated hereinabove, more specifically for the reason that the plaintiff to institute a - 11 - HC-KAR NC: 2025:KHC:48094 WP No. 26083 of 2025 fresh suit asserting its claims comprehensively, including but not limited to damages arising from breach of assurances by defendant No.1, usance interest and Bank charges levied by defendant No.2 while acting under the Letters of Credit, losses suffered due to delay and obstruction in delivery of goods by defendant No.1 and other consequential and incidental claims as may be determined upon collation of records by the plaintiff including but not limited to, any losses incurred in the value/sale price of the goods due to the acts of defendant No.1. 14. It is also stated that the plaintiff seeks to file a fresh comprehensive suit seeking comprehensive relief including damages against defendant No.1. It is further stated that the various prayers regarding injunction on the Letters of Credit, etc., no longer survives and the pleadings in the present suit are also primarily in the context of Letters of Credit. As such, it would be impractical to simply seek adjournment and continue the - 12 - HC-KAR NC: 2025:KHC:48094 WP No. 26083 of 2025 present suit rather than filing a proper and comprehensive fresh suit. 15. It is also stated at paragraph 15 of the affidavit that the withdrawal of the present suit is not being sought due to any defect in the cause of action or due to any waiver of rights or claims by the plaintiff, but only to permit the plaintiff to place all its claims in a single, self- contained suit so as to remain in compliance with the provisions of Order II Rule 2 of CPC. 16. It is the contention of the learned counsel for plaintiff that the suit has already been dismissed as withdrawn without liberty; if liberty is granted, no hardship or inconvenience would be caused, as the pleadings are completed. Therefore, no injustice or hardship would take away the right that is accrued to the defendants by permitting liberty in filing a fresh suit with a similar cause of action. - 13 - HC-KAR NC: 2025:KHC:48094 WP No. 26083 of 2025 17. Learned counsel for plaintiff has relied upon the judgment of the Hon'ble High Court of Madras in the case of N.Iyyaswamy and Another v/s Padmini and Others reported in 2020 SCC OnLine Mad 13418 in support of his case. 18. Per contra, Sri Dhruv M.Patwari, learned counsel for respondent-defendant No.1 vehemently contends that the order passed by the Commercial Court in rejecting the grant of liberty to file a fresh suit on the same cause of action is sustainable for the reason that the plaintiff has played fraud, suppressed material facts and not come before the Court with clean hands. The plaintiff also realised that after the pleadings are filed by the defendants and having come to the conclusion on the basis of materials placed by the defendants that the plaintiff is on the losing end and he would invariably lose the suit, in view of his own admissions in the plaint and other documents produced by the plaintiff as well as that of the defendants. The plaintiff has filed an application for - 14 - HC-KAR NC: 2025:KHC:48094 WP No. 26083 of 2025 withdrawal at the stage when the pleadings are completed. 19. Learned counsel for defendant No.1 further contended that once the material is placed before the Court with regard to the plaintiff having played fraud and not come before the Court with clean hands, he cannot be reserved liberty to file a fresh suit on the said cause of action. It is also contended that there are alternative proceedings and therefore, the plaintiff cannot be permitted to withdraw the suit so that he can take advantage of the proceedings or the consequences that would arise out of such proceedings by permitting him to withdraw the suit with liberty. 20. In the meanwhile, defendant No.1 has filed an application in I.A.No.7 under Order VII Rule 11(a) and (d) read with Section 151 of CPC for rejection of the plaint, which is yet to be heard. - 15 - HC-KAR NC: 2025:KHC:48094 WP No. 26083 of 2025 21. Learned counsel for defendant No.1 has relied upon the judgments of the Hon'ble Apex Court in the case of K.S.Bhoopathy and Others v/s Kokila and Others reported in (2000) 5 Supreme Court Cases 458, the Hon'ble High Court of Delhi in the case of Awaneesh Chandra Jha v/s Anil Prasad Nanda reported in MANU/DE/2239/2022 and the Hon'ble High Court of Karnataka in the case of M/s. Durga Projects and Infrastructure Pvt. Ltd. v/s Sri S.Rajagopala Reddy and Others reported in ILR 2019 KAR 4739 in support of his case. 22. A short point that would arise for consideration is that: "Whether the plaintiff would be entitled to grant of liberty, as the Commercial Court has already dismissed the suit without granting liberty?" 23. In my opinion, the judgments relied upon by learned counsel for defendant No.1 may not be applicable to the facts and circumstances of the present case. The - 16 - HC-KAR NC: 2025:KHC:48094 WP No. 26083 of 2025 judgement of the Hon'ble Apex Court in the case of K.S.Bhoopathy and Others v/s Kokila and Others stated supra would not be relevant for the reason that an application was filed under Order XXIII Rule 1(3) read with Section 151 of CPC at the stage of an appeal. The observations made at para-41, 49 and 50 in the judgement of the Hon'ble High Court of Delhi in the case of Awaneesh Chandra Jha v/s Anil Prasad Nanda stated supra would not be relevant and applicable to the present case on hand and also the judgement of the Hon'ble High Court of Karnataka in the case of M/s. Durga Projects and Infrastructure Pvt. Ltd. v/s Sri S.Rajagopala Reddy and Others stated supra would also not be applicable for the reason that an application was filed under Order VII Rule 11(a) and (d) of CPC for rejection of the plaint. 24. Coming back to the present case on hand, what is required to be seen by the Commercial Court is when an application is filed under Order XXIII Rule 1(3) read with - 17 - HC-KAR NC: 2025:KHC:48094 WP No. 26083 of 2025 Section 151 of CPC, the Court would have to consider what is the intent of the legislature in making the provision under Order XXIII Rule 1(3) of CPC, which is extracted below for the sake of proper understanding:- "1. Withdrawal of suit or abandonment of part of claim 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." 25. Order XXIII Rule 1(3)(a) of CPC deals with, where a suit must fail by reason of some formal defect and Order XXIII Rule 1(3)(b) of CPC deals with, where there are sufficient grounds for allowing the plaintiff to institute a fresh suit for the subject matter of the suit or part of the claim. The Commercial Court is vested with the discretion, - 18 - HC-KAR NC: 2025:KHC:48094 WP No. 26083 of 2025 as it thinks fit, to grant permission to the plaintiff to withdraw his suit in part or in full with liberty to institute a fresh suit in respect of the subject matter of the suit by way of a fresh suit. 26. In the present case on hand, the plaintiff has made several averments in the affidavit as to why he intends to file a fresh suit with same cause of action and also that he has not made any admissions or not due to any defect in the cause of action or waiver of rights or claims, but only to file and place on record all the necessary documents, which he has possessed. Based on the other materials available with him and also on the basis of the pleadings of the defendants, he intends to file a fresh comprehensive suit. In such circumstances, there is a discretion vested with the Commercial Court to accept or reject the present case on hand. Therefore, the Commercial Court has allowed the application in I.A.No.10 and granted permission to withdraw the suit but has rejected the 'reserving of liberty'. - 19 - HC-KAR NC: 2025:KHC:48094 WP No. 26083 of 2025 27. In my humble opinion, the order passed by the Commercial Court is not sustainable and the same is illegal and perverse, as the Commercial Court would have to grant the liberty to initiate a fresh suit on the same cause of action for the reason stated in the affidavit annexed to the application and also, any suit that is filed subsequently without granting the liberty would be barred under Order II Rule 2 of CPC, which is clearly stated in para-15 of the affidavit annexed to the application in I.A.No.10. Therefore, this Court is of the opinion that the Commercial Court has committed an error while passing the said order, which is not sustainable. 28. Under the circumstance, this Court is of the opinion that liberty requires to be granted to the plaintiff to institute a fresh suit and the present suit filed by defendant No.1 deserves to be dismissed. 29. Accordingly, I pass the following: - 20 - HC-KAR NC: 2025:KHC:48094 WP No. 26083 of 2025 ORDER i. This petition is allowed; ii. The impugned order dated 21.07.2025 passed on I.A.No.10 in Com.O.S.No.420/2025 by the Commercial Court, so far as liberty is not reserved is hereby set-aside. Consequently, I.A.No.10 filed by the plaintiff in Com.O.S.No.420/2025 is hereby allowed; iii. The commercial original suit No.420/2025 is dismissed by reserving liberty to the plaintiff to file a fresh suit. Ordered accordingly. Sd/- (PRADEEP SINGH YERUR) JUDGE CPN List No.: 1 Sl No.: 4