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INTERPLEADER SUITS: A CRITICAL ANALYSIS

Code of Civil Procedure

Submitted by
Mohit Singh
SM0114049
3rd Year & 6th Semester

National Law University and Judicial Academy, Assam


Contents

Page No.
Table of cases……………………………………………………………………...……………….i
Table of Statutes……………………………………………………………………..…………....ii
Table of Abbreviations…………………………………………………………………...………iii
Introduction………………………………………………………………………………..………1
Aim(s)……………………………………………………………………………………………..2
Objective(s)………………………………………………………………………………………..2
Scope and Limitations……………………………………………………………………………..2
Review of Literature………………………………………………………………….…………2-3
Research Questions……………………………………………………………………………..…3
Research Methodology……………………………………………………………………………3

Interpleader Suits: Its meaning……………………………………………………………….3-4


The Halsbury’s Laws of England………………………………………………………….……4
Section 88 of the Code of Civil Procedure, 1908……………………………………………….4
Plaint in an Interpleader Suit……………………………………………………………...….4-5
Payment of the thing claimed into Court…………………………………………………….…5
Procedure where Defendant is suing the Plaintiff……………………………………………..5
Procedure at First Hearing…………………………………………………………………....5-6
Who cannot file Interpleader Suit................................................................................................6
Charge for Plaintiff’s Costs…………………………………………………………………..….6
Appeal…………………………………………………………………………………………….6
Takeaways……………………………………………………………………………..……….6-7
Conclusion…………………………………………………………………………………..……7

Bibliography…………………………………………………………………………………………………iv
Table of cases

1. Asan v. Saroda.………….………………………………………………………………….....4
2. Jugal Kishore &Anr v. Bhagwan Das……………………………………………………………….6
3. N.M.N. DuraiswamiChettiar v. Dindigul Urban Co-operative Bank Ltd…………….………...6
4. National Insurance Co. v. Dhirendra……………………………………………………………...…7
5. Sambayya v. SubbaReddi……………………………………………………………………………...7
6. Syed ShamshulHaque v. Sitaram Singh &Ors…………………………………….……………….5
Table of statutes

1. Code of Civil Procedure, 1908.


Table of Abbreviations

All India Reporter


AIR
& And
Cal. Calcutta
ed. Edition
Ibid Same as above footnote
ILR Indian Law Reporters
Kant. Karnataka
Mad. Madras
P&H Punjab and Haryana
p. Page number
Pat. Patna
S.C.C. Supreme Court Cases
SCR Supreme Court Record
v. Verses
Vol. Volume
Abstract

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.
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 are 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.

Keywords: Interpleader Suits, Code of Civil Procedure, 1908.

Introduction

Interpleader Suits are those suits which have no direct connection in the subject matter of the suit
who files the suit. It is the suit filed by the third party to have adjudication of the claims of the
defendants over some property. In this research work, the researcher first has dealt with the
Halsbury`s Laws of England which is based on the same principle which is enshrined under
Section 88 of the Code of Civil Procedure, 1908. It also deals with the provision under Section
88 of the Code of Civil Procedure, 1908 and then it clearly laid down the different parties
involved in the suit. Order XXXV of the Code of Civil Procedure, 1908 extensively deals with
the rules which regulate the procedure of Interpleader Suits. It also provides for the person who
cannot file the interpleader suits and if one files the suit then the Court can provide for the costs
to be given to the original plaint either by giving him a charge on the thing claimed by the
defendants/claimants, or, in some other equally efficacious way. In this research work, the
researcher tried to critically analyze the concepts related to interpleader suits however this work
is not a complete study on the subject matter and the further study can be done on this issue.
Aim(s)

The aim of this project is to critically examine the interpleader suits provided under Section 88 of
Code of Civil Procedure, 1908.

Objective(s)

The Objectives of this research paper is

 To study the meaning of Interpleader Suits.


 To critically examine the provision enshrined under Section 88 of the Code of Civil
Procedure, 1908.
 To critically analyze the procedure entailed under Order XXXV of the Code of Civil
Procedure, 1908.
 To know the process of appeal in Interpleader Suits.

Scope and Limitations

The Scope this research paper is limited to study of Interpleader Suits provided under Section 88
of Code of Civil Procedure, 1908.

Review of Literature

Sir DinshawFardunjiMulla, THE CODE OF CIVIL PROCEDURE. 18th ed. 2011, Lexis
Nexis.
This bookmeets the requirement of civil procedural law students. The body of this code,
consisting of the Sections part is expressed in more general terms and has to be read in
conjunction with the more particular provisions contained in respective orders and rulers. It was
not possible for writer to give the details of all the changes and alterations incorporated in
previous version due to space constraint so in this version every important changes and
alterations has been incorporated. The readers would find a number of new synopses on the
section 88 which I have deal in my research work. Myriad changes have been incorporated in
this edition keeping in view, the practical utility of this important procedural law, to make it
convenient, meaningful and purposeful for students.
C.K Takwani, CIVIL PROCEDURE WITH LIMITIATION ACT, 1963, 7th ed. 2016,
Eastern Book Company, Lucknow.
Detailed work has been done in this book on the Code of Civil Procedure relating with recent
amendments and changes with case laws. Sincere effort has been made by author to make this
book more effective, more informative, useful and up-to-date. Though essentially the book has
been written for law students and junior advocates, it has been also warmly welcomed by
lawyers and judges.

Research Questions

1. What is an Interpleader Suits?


2. What are the provisions laid down for an Interpleader Suits?
3. What is the procedure for filing an Interpleader Suits?
4. Who can file an Interpleader Suits under Code of Civil Procedure, 1908?
5. Whether the suit can be appeal in higher court of law?

Research Methodology

In this paper, the researcher has adopted Doctrinal type of research. Doctrinal research is
essentially a library based study, which means that the materials needed by a researcher may be
available in libraries, archives and other data bases. Various types of books were used to get the
adequate data essential for the project. The researcher also used computer laboratory to get
important data related to this topic. Several websites found to be very useful to better understand
this topic.

Interpleader Suits: Its meaning

Inter-pleader suit is a suit filed by a person who has no direct interest in the subject-matter of the
suit.It is a suit filed a third party (the plaintiff) in the court to have adjudication of the rival
claims of the defendants over some article, money or property.In other words if the plaintiff is in
possession of some article, things or property (in which he is not having direct interest or he may
be a custodian or stake holder) and if he is in a dilemma over the rivals claims of the defendants,
he may file inter-pleader suit in the competent court to have determination as to who is the actual
owner of the article, things or property.Inter-pleader suit is governed by Order 35 of the Code of
Civil Procedure, 1908.1

The Halsbury’s Laws of England

“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”2.

Section 88 of the Code of Civil Procedure, 1908

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.

In the case of Asan v. Saroda3, it was held that, where 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.

Plaint in an Interpleader Suit

Order XXXV, Rule 1 of the Code of Civil Procedure, 1908 require the interpleader to state in his
plaint that, the plaintiff claims no interest in the subjectmatter of suit and the claims put forth by
the defendants severally. The interpleader must also categorically state that, there is no collusion
between the parties to the suit, that is, the plaintiff and any of the defendants. The interpleader
must specify in the plaint, the claims made by the defendants severally, and should express his

1
http://www.lawzonline.com/legalencyclopedia/i/interpleader-suit.html, accessed on April 30th, 2017.
2
Lord Hailsham, THE HALSBURY’S LAWS OF ENGLAND, 4 th ed. 1987, p.200.
3
AIR 1922 Cal 138.
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.

Payment of the thing claimed into Court

Order XXXV, Rule 2 of the Code of Civil Procedure, 1908, provides that where a thing claimed
is such that, it is capable of being paid into the court, then, the plaintiff/interpleader may be
required to pay such amount or thing before the court. Thus, the court has discretion to make
such orders as regards the subject matter in dispute and the party concerned will be bound to
obey the order before it can ask for any relief in the suit.4

Procedure where Defendant is suing the Plaintiff

Order XXXV, Rule 3 of the Code of Civil Procedure, 1908 states that, where any of the
defendants in an interpleader suit is actually suing the plaintiff in respect of the subject-matter of
such suit, the court in which the suit against the plaintiff is pending, on being informed by the
court in which the interpleader suit is pending, shall stay the proceedings in that suit as against
him.5

In the case of Satyanarain v. District Judge, Tonk&Ors6, it was held that, it is not as if that once
the suit for interpleader is filed, the other civil suit has to be stayed automatically; in order to
invoke the power under Order XXXV, Rule 3 of the Code of Civil Procedure, 1908, the plaintiff
(or interpleader) is duty bound to establish a prima facie case in his favour.

Procedure at First Hearing

Order XXXV, Rule 4 of the Code of Civil Procedure, 1908 empowers the court to declare at the
first hearing itself, that the plaintiff is discharged from all liabilities and as a necessary corollary
the court can award the plaintiff his costs and dismiss him from the suit. However, if the court is
of the opinion that justice, propriety and convenience requires that all parties to the suit be

4
Syed ShamshulHaque v. Sitaram Singh &Ors, AIR 1978 Pat. 151
5
Sir DinshawFardunjiMulla, THE KEY TO INDIAN PRACTICE, 18 th ed. 2011, p.217.
6
S.B. Civil Writ Petition No. 15587/2009, High Court of Rajasthan, Date of Decision: 18.08.2010, Coram: R.S.
Chauhan, J.
retained, then, the court shall not discharge the plaintiff till the final disposal of the suit.7 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.8

Who cannot file Interpleader Suit

Order XXXV, Rule 5 of the Code of Civil Procedure, 1908 states that, an agent cannot sue his
principal, and similarly, a tenant cannot sue his landlord for the purpose of compelling such
principals/landlords to interplead with persons other than the ones claiming through them.9

In the case of N.M.N. DuraiswamiChettiar v. Dindigul Urban Co-operative Bank Ltd,10 it was
held that, on a dispute as to the ownership of the deposit arising between the customers and the
third person, an interpleader suit filed by the bank, would not come within the prohibition of
Order XXXV, Rule 5 of the Code of Civil Procedure, 1908.

Charge for Plaintiff’s Costs

Order XXXV, Rule 6 of the Code of Civil Procedure, 1908 states that, when an interpleader suit
is properly instituted, then, the court can provide for the costs to be given to the original plaintiff
either by giving him a charge on the thing claimed by the defendants/claimants, or, in some other
equally efficacious way.

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.

Takeaways

1. To interplead means “to litigate with each other to settle a point concerning a third party”.
2. In an interpleader suit the real dispute is not between the plaintiff and the defendants, but
amongst the defendants themselves.

7
Sailender Malik, CODE OF CIVIL PROCEDURE, 27 th ed. 2011, p. 496.
8
Ibid
9
Jugal Kishore &Anr v. Bhagwan Das AIR 1990 P&H 82
10
AIR 1957 Mad 745
3. In an interpleader suit plaintiff’s position must be one of impartiality and non-
arbitrariness.
4. 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.11
5. The party filing an interpleader suit should be in a position to walk-out of the suit with a
mere claim for costs.12
6. 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.

Conclusion

Interpleader Suits are acting as a protective safeguard to the plaintiff when he possess a certain
which does not belongs to him and he institute a suit in the Court of law for the proper
adjudication of the property to whomsoever it belongs. One can trace this protective mechanism
in the Halsbury`s laws of England which also holds the same principle. Section 88 of the Code of
Civil Procedure, 1908 extensively deals with the Interpleader Suits and the rules are laid down
under Order XXXV of the Code of Civil Procedure, 1908. For this subject matter, the content of
the plaint plays a very important role. An interpleader must categorically state that there is no
collusion between the parties to the suit, that is, the plaintiff and any of the defendants.
Interpleader should also mention in the prayer clause for the cost of institution the suit. However
Order XXXV, rule 5 of the Code of Civil Procedure, 1908 barred certain person from instituting
the suit. For this matter of fact, an agent cannot sue his principal and likewise, a tenant cannot
sue his landlord for the purpose of compelling such principals/landlords to interplead with
persons other than the ones claiming through them.

11
Sambayya v. SubbaReddi, AIR 1952 Mad 564
12
National Insurance Co. v. Dhirendra, AIR 1938 Cal 287
Bibliography

List of Books

Sir DinshawFardunjiMulla, THE CODE OF CIVIL PROCEDURE. 18th ed. 2011, Lexis Nexis,
Nagpur.
C.K Takwani, CIVIL PROCEDURE WITH LIMITIATION ACT, 1963, 7th ed. 2016, Eastern
Book Company, Lucknow.
Sailender Malik, CODE OF CIVIL PROCEDURE, 27th ed. 2011, Allahabad Law Agency,
Faridabad.
Lord Hailsham, THE HALSBURY’S LAWS OF ENGLAND, 4th ed. 1987, Lexis Nexis,
England.

List of Articles

ShivamGoel,“Interpleader Suits - Section 88 Read with Order XXXV of the Code of Civil
Procedure, 1908: Analysis”, accessed from
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2880116, accessed on April 28th, 2017.

List of websites

http://www.lawzonline.com/legalencyclopedia/i/interpleader-suit.html, accessed on April 30th,


2017.