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CPC. Law On Interpleader Suit. Roll No. 100. Pankaj Sharma - Hnlu
CPC. Law On Interpleader Suit. Roll No. 100. Pankaj Sharma - Hnlu
On
Submitted to:
Faculty, CPC
By:
Pankaj Sharma
Section A
Submitted on:
1
Declaration
I, Pankaj Sharma, of Semester IX, Section A, declare that this project submitted to H.N.L.U.,
Raipur is an original work done by me under the able guidance of Mr. Vishal Dixit, Faculty
of civil procedure code. The work is a bona fide creation done by me. Due references in
terms of footnotes have been duly given wherever necessary.
Pankaj sharma
Roll No. 100
Section A
2
Acknowledgements
I feel elated to work on the project “Law of Interpleader suit”. The practical
realization of the project has obligated the assistance of many Persons. Firstly I
express my deepest gratitude towards, Mr. Vishal Dixit, Faculty of civil
procedure code, to provide me with the opportunity to work on this project. His
able guidance and supervision were of extreme help in understanding and carrying
out the nuances of this project.
I would also like to thank The University and the Vice Chancellor for providing
extensive database resources in the library and for the internet facilities provided by
the University.
Some printing errors might have crept in which are deeply regretted. I would be
grateful to receive comments and suggestions to further improve this project.
Pankaj Sharma
Section A, Semester IX
3
Table of Contents
Declaration……………….………………………………………….2
Acknowledgments ………………….…………………………….…3
1. Introduction …………………………………….….…………5
Research methodology………….…..6
Objectives of study …………………6
Questions ……………………….…..6
Hypothesis……………………….….6
Scope of study ……………………...6
Mode of citation………………….….6
Conclusion………………………………………………………………13
Bibliography………………………………………………………….…14
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Introduction
Interpleader:- A lawsuit brought on behalf of a third party to determine which of two parties
is entitled to property held by the third party.1
An interpleader suit is one in which the real controversy/dispute is not between the plaintiff
and the defendant, but is rather between the defendants only who inter-plead against each
other. The hallmark of an interpleader suit is the fact that in an interpleader suit, the plaintiff
is not really interested in the subject-matter of the suit. The primary and the foremost object
of an interpleader suit is to have the claims of rival defendants adjudicated, for in an
interpleader suit there must be some debt or some money or other property in dispute
between the defendants only. The plaintiff in an interpleader suit must be in a position of
impartiality/ non-arbitrariness.
The plaintiff in a cause, seeks the direction of the court as to Whom out of the defendants, he
should deliver the property.
The Halsbury’s Laws of England2 states that “Where a person is under liability in respect
of a debt or in respect of any money, goods or chattels and he is, or expects to be sued for or
in respect of the debt or money or those goods or chattels, by two or more persons making
adverse claims thereto, he may apply to the court for relief by way of interpleader.”
Section 88 read with Order XXXV of the Code of Civil Procedure, 1908 deals with
interpleader suits.
In the case of Mangal Bhikaji Nagpase vs State Of Maharashtra,3 an interpleader suit, the
contest is between the defendants for title and the plaintiff has got nothing to do with that
contest. In this respect, Rule l (a) or Order 35 of the Code of Civil Procedure mandatorily
requires the plaintiff to state that he claims no interest in the subject matter in dispute other
than for charges or costs.
1
This article is a comment on the ambit, scope and the area of operation of Section 88 read with Order XXXV
of the Code of Civil Procedure, 1908 dealing with interpleader suits.
2
(Fourth Edition), Volume 37, Para 264 (at p.200)
3
(1997) 99 BOMLR 91
5
Research Methodology
The method of research adopted is doctrinal & descriptive in nature. Secondary sources of
information have been used to give the research work a concrete structure. Websites & e-
articles have been extensively referred for relying on the data. Other relevant sources as
suggested by the faculty coordinator have been referred to. Footnotes have been provided
wherever required.
Objectives of study
Questions
What is Interpleader suit and law relating to Interpleader suit under CPC, 1908?
Hypothesis
By an interpleader suit is meant suit in which the real dispute is between the defendants only
and the plaintiff is not interested in the subject matter of the suit. The plaintiff brings a suit in
which he states that he has certain property which is claimed by the defendants adversely to
each other.
The plaintiff in a cause, seeks the direction of the court as to Whom out of the defendants, he
should deliver the property.
Scope of study
In this project, the author only discusses the law of Interpleader suit under civil procedure
code 1908. Further section 88 read with Order 35 of CPC, 1908.
Mode of citation
6
Section 88 of the Code of Civil Procedure, 1908 states that
“Where two or more persons claim adversely to one another some debt, sum of money or
other property (moveable or immoveable) from another person, who in fact does not claim
any interest in that sum of money or property except the cost or charges incurred by him in
instituting an interpleader suit and/or safeguarding the property and is ready and willing to
pay or deliver the sum of money or property to the rightful claimant, then such another
person can file an interpleader suit.
The pre-condition for filing an interpleader suit is that on the date of institution of an
interpleader suit there must be no suit pending in which the rights of the rival claimants can
be properly decided.”
For example
"A" dies leaving behind one crore rupees cash in bank account. He had two wives and their
children. Both claim to recover the said amount. In order to have genuine claimant, owner,
the banker shall file a suit before the court and will get the order about the real owners.
Effects of suit
A decision given on the claim of the co-defendants in an interpleader suit will operate
as res-judicata between them
In the case of Asan v. Saroda4, it was held that where the defendants do not claim adversely
to each other nor does the plaintiff admit the title of one of the defendant or is willing to pay
or deliver the property to him, the suit is not interpleader.
Characteristics of Inter-pleader suit as per Sec. 88 and Order 35, C.P.C. are:
1. The plaintiff does not claim any interest in it except the charges, or costs and is ready
to pay or deliver it to the right claimant;
2. There must be some debt, sum of money or other property movable or immovable in
disputes;
3. Two or more persons must be claiming it adversely to one another
4. There must be no suit pending in which the right of the rival claimants can be
properly decided.5
4
AIR 1922 Cal 138
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SCOPE AND APPLICABILITY OF THE SECTION
Where X is under a liability for any debt, sum of money, or other property, claimed adversely
by A or B or more, and he desires protection against a wrong payment or delivery, he can file
a suit under this section. The only way, in fact, in which he can protect himself is by filing
such a suit; otherwise if he litigated with the claimant separately, he Would have to pay the
costs of the successful claimant. It is necessary that the liability to someone must be admitted
and there must be no collusion and no interest in the subject matter other than for charges or
costs.
A suit under this section is called an interpleader suit because the plaintiff is really not
interested in the matter, but only the defendants interplead as to their claims. In fact each of
the defendants so interpleading is virtually in the position of a plaintiff and his claim will be
governed by the rules of the Limitation Act.6 A reading of S. 88, Civil P. C., would clearly
show that the court does not have jurisdiction to travel beyond what has been admitted by the
plaintiff as due from him/her or it. The Court cannot direct any further payment or investigate
into any question relating to the transaction alleged between the parties.
In order to determine whether a suit is an interpleader suit under the section the Court
must have regard to all the prayers in the plaint. The mere fact that the plaintiff requires the
defendants to interplead as regards one of the reliefs claimed would not necessarily make it
an interpleader suit.7
Where a party in the position of a mere stake-holder is made a defendant in a suit, his
proper course is to deposit the money (if it is a suit for money) into Court and ask that the
parties really interested may be substituted for himself as defendants. Such deposit by
him is a valid discharge for him and if the Court paid it to a wrong person he is not respon-
sible. But in view of the definition of the expression 'interpleader
suit' and the procedure governing such suits given in this section, the Court of Wards can
institute interpleader suit against several claimants, when, on the death of any person of
whose property the Court of Wards has assumed jurisdiction, the succession to his property
is disputed. Also, Order 35, Rule 5 does not bar all interpleader suits as against the
landlord. It bars such a suit when a claim adverse to the landlord is put forward by a person
5
T.L.VenkataramaAyiar, Mulla on The Code of Civil Procedure (13th ed., Bombay: N.M.Tripathi Private Limited,
1967).
6
AIR 1925 Mad 497 (562) (DB).
7
(l908)32 Bom 592 (597) (DB).
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not claiming through the landlord himself i.e. when such an adverse claim is put forward on
a title independent of the landlord.8
Where in ejectment petition filed by both rival landlords against tenant, a Bank on
ground of non-payment of rent - Petitioner one of rival landlord claimed himself to have
become exclusive owner of suit property under mutual partition and Bank was not a party to
said compromise or settlement - Interpleader suit filed by Bank for deciding title of suit
property would be maintainable. Where in an interpleader suit, the original plaintiff,
who was a tenant was not claiming any title to the property and the rival defendants were
claiming title to the property and in fact, the dispute was between the rival defendants and
not between the plaintiff and the defendants to the suit, the order holding that one set of
claimants to the property will act as a plaintiff and the other set of claimants as defendant to
the suit and the rights of tenant would be safeguarded by holding that he would go on
depositing the rent in the Court was proper.
The plaintiff who seeks to file an interpleader suit shall satisfy the following conditions laid
down by Order 35 of C.P.C.:
(i) The Plaintiff shall state that he has no interest in the subject matter in dispute other than
the charges or costs;
(iii) There is no collusion between the plaintiff and any of the defendants.9 (Sambayya v.
Subba Reddi)
8
(1979) 2 Cal LJ 7 (15).
9
AIR 1952 Mad 564,
9
The interpleader must specify in the plaint, the claims made by the defendants severally, and
should express his willingness to bring the property (if it is moveable) before the court. The
interpleader in the prayer clause of his plaint must pray the Hon’ble court to grant him the
cost incurred by him in instituting the suit and also any other charges incurred by the
interpleader in maintaining and/or safeguarding the property in dispute, which the defendants
claim adversely to one another.
10
Syed Shamshul Haque v. Sitaram Singh & Ors, AIR 1978 Pat. 151
11
Sir Dinshaw Fardunji Mulla, The Key to Indian Practice, Lexis Nexis, 11th Edition, p. 217
12
S.B. Civil Writ Petition No. 15587/2009, High Court of Rajasthan
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suit. If the court finds it necessary then it can direct that certain other issues be framed and
tried along with other issues albeit the suit, and that any claimant (that is, defendant in the
interpleader suit) be made a plaintiff in lieu of or in addition to the original plaintiff.
The plaintiff has paid the amount so ordered into the court or to the person declared by the
court to be rightful claimant. He will stand discharged From his obligation. This will also
indemnify him against all claims that any other party to the suit may bring before the court in
this behalf.
Appeal
An order dismissing an interpleader suit is appealable. An appeal can be preferred under
Order XLIII, Rule 1 of the Code of Civil Procedure, 1908
13
, AIR 1938 Cal 287
11
Res judicata
As the decision of the court relating to the matters or claims of the defendants. will operate as
res-judicata between the parties For obtaining complete immunity, they should implead all
those persons who have the slightest adverse interest to the subject matter or the suits as
relevant parties to the interpleader suit. This is because. the court can only grant indemnity
against the claims made by the person who were the relevant parties to the interpleader suit
hut not against those claims filed by the strangers to such proceedings.
It is not ordinarily necessary that each and every defendant should be interested in the entire
subject matter of the suit
While the inter-pleader suit in progress, if any of the defendants files a suit against the
Plaintiff, that suit shall be stayed under Sec. 10 of C.P.C. “Res – Subjudice”.
The proviso to this section lays down that where any suit is pending wherein the rights of all
parties can properly he decided. no such suit of interpleader should ever he instituted.
In other words, an interpleader suit will be barred where a suit in which the rights of all
parties concerned can properly be decided. is already pending.
Moreover, when the plaintiff has taken an indemnity from one of the defendants. he cannot
file an interpleader suit.
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Conclusion
In an interpleader suit, the contest is actually between the defendants. The plaintiff cannot
claim any interest in the subject matter of such suit. He must admit his liability which should
be unconditional, except for his claim for the charges and the costs as admissible to him
under the law.
To ‘interplead’ means “to litigate with each other to settle a point concerning a third party”.
the real dispute is not between the plaintiff and the defendant, but amongst the defendants
themselves. plaintiff’s position must be one of impartiality and non-arbitrariness.
An interpleader suit will not lie if the plaintiff has any interest in the subject-matter of the suit
or is in collusion with one of the claimants. The party filing an interpleader suit should be in a
position to walk-out of the suit with a mere claim for costs.
In order to determine the exact nature of the suit, regard must be had to all the prayers in the
plaint; it is not an interpleader suit merely because one of the reliefs has reference to it.
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Bibliography
Books
Sir Dinshaw Fardunji Mulla, The Key to Indian Practice, Lexis Nexis, 11th Edition,
p.217
C K Takwani, J, CIVIL PROCEDURE CODE with LIMITATION ACT, 1963
(Eastern Book Company, Lucknow, 7th ed., 2013). Pg 450
Sen Gupta S P, HANDBOOK OF THE CODE OF CIVIL PROCEDURE, 1908
(Kamal Law House, 2007).
Dictionary
To interplead means to litigate with each other to settle a point concerning a third
party. [Concise Oxford English Dictionary (2002) and Chamber’s 20th Century
Dictionary (1992)].
websites
Bare acts
Caselaws
S.B. Civil Writ Petition No. 15587/2009, High Court of Rajasthan, Date of
Decision: 18.08.2010, Coram: R.S. Chauhan, J
Sambayya v. Subba Reddi, AIR 1952 Mad 564
National Insurance Co. v. Dhirendra, AIR 1938 Cal 287
Jugal Kishore & Anr v. Bhagwan Das, AIR 1990 P&H 82
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