Meaning
‘’To interplead’’ means ‘’to litigate with each other to settle a point concerning a third party’’. In an interpleader suit, the actual dispute isn’t between the plaintiff and the defendant but between the defendants who inter-pleads against each other. It is unlike an ordinary suit. In majority of cases, there is a dispute between a plaintiff and a defendant. In an interpleader suit, the plaintiff is not really interested in the subject-matter of the suit.
According to Section 88 of the Code of Civil Procedure 1908, two or more persons claiming adversely to each other the same debt, sum of money, or other property (movable or immovable) from a person who does not claim any interest therein except the charges and costs incurred by him, and such person is ready to pay or deliver the same to the rightful claimant may file an interpleader suit.
Object - The primary object of filing an interpleader suit is to get claims of rival defendants adjudicated. It is the process wherein the plaintiff calls upon the rival claimants to appear before the court and get their respective claims decided. The decision of the court in an interpleader suit affords indemnity to the plaintiff on payment of money or delivery of property to the person whose claim has been upheld by the court.
Conditions for Instituting an Interpleader Suit
Following conditions must be satisfied before instituting an interpleader suit:
1. There must be some debt sum of money or other property movable or immovable in dispute.
2. There must be two or more persons claiming it against each other.
3. The person from whom such money or property is being claimed must not be claiming an interest therein other than the charges and costs.
4. Such a third person must be ready and willing to pay or deliver it to the rightful claimant.
5. There must be no suit pending wherein the rights of the rival claimant can be properly adjudicated.
Illustrations:
(a) A is in possession of property claimed by B and C adversely. A does not claim any interest in the property and is ready to deliver it to the rightful owner. A can institute an interpleader suit.
(b) A liable to pay Rs. 40,000. The amount is claimed by B and C adversely to each other. According to A, he has already paid Rs. 10,000. An interpleader suit would be competent for Rs. 30,000.
Who May Institute an Interpleader Suit?
In National Insurance Co. Ltd. vs Dhirendra Nath Banerjee And Anr (1937), it was observed that a person who has no interest in any debt, the sum of money or property except the charges or cost and such person is willingly ready to pay or deliver the property to the rightful claimant may file an interpleader suit.
Procedure for Interpleader Suit
The procedure to file an interpleader suit has been laid out in Order 35 of the Civil Procedure Code. The following additional facts must be stated in the plaint of an interpleader suit:
1. The plaintiff claims no interest in the subject matter in dispute other than the charges and cost.
2. The claims have been made by the defendants severally.
3. There is no collusion between the plaintiff and any of the defendants.
At the first hearing, the court may declare the plaintiff discharged from all liability, award him the cost and dismiss him from the suit. And based on available evidence, the court may adjudicate the matter. In case of lack of evidence, the court may frame issues and try them by making one of the claimants, the plaintiff, in lieu of or in addition to the original plaintiff and shall proceed in the suit in an ordinary manner.
It was held in Jagganath vs Tulka Hera (1908) that a suit does not become an interpleader suit simply because the plaintiff requires the defendants to interplead with each other on one of the plaint’s prayers.
Who cannot file interpleader suit?
According to Rule 5 of Order 35 of the Civil Procedure Code:
● An agent cannot sue his principal,
● A tenant cannot sue his landlord, for the purpose of compelling them to interplead.
An exception to this general rule is that where the claim is made through the principal or landlord, the agent or tenant may file an interpleader suit against their principal or landlord, respectively.
Charge for Plaintiff’s Cost
The court may provide for the cost of the original plaintiff by giving him a charge on the things claimed or in some other effectual way.
Test
In order to decide whether a suit is in the nature of an interpleader suit, the court must have regard to all the prayers in the plaint. A suit soes not become an interpleader suit merely because the plaintiff requires the defendant to interplead with each other as regards one of the prayers in the plaint.
Appeal
An order dismissing an interpleader suit filed by the plaintiff is a ‘’decree’’. Likewise, an adjudication upon the claims of defendants is also appealable as ‘’decree’’. A decision under Rules 3,4, and 6 of Order 35 is an appealable order.
Conclusion
An interpleader suit under Section 88 read with Order XXXV of the Code of Civil Procedure, 1908, provides an effective remedy where two or more persons claim the same debt, money or property adversely to one another. Its primary objective is to secure a judicial determination of the rival claims while protecting a neutral stakeholder from multiple liabilities. By enabling the court to determine the rightful claimant and discharge the plaintiff from liability, the provision promotes fairness, prevents multiplicity of proceedings and ensures the proper administration of justice.