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INTERNAL ASSESSMENT

ARTICLE:
INTERPLEADER SUIT
Code of Civil Procedure, 1908
by

ADITYA KUMAR
17IP63002

SUBMITTED

to

DR. S.R. SUBRAMNANIAN

SUBJECT: CIVIL PROCEDURE CODE & LIMITATION ACT


SUBJECT CODE: IP60106
RAJEEV GANDHI SCHOOL OF INTELLECTUAL PROPERTY LAW
INDIAN INSTITUTE OF TECHNOLOGY, KHARAGPUR
IInd Semester, April, 2018
TABLE OF CONTENTS

INTRODUCTION 3
1. Explanation …………………………………………………….…..………….…….4
2. Plaint & Plaintiff……………………………………………..….……………….…..4
3. First Hearing & Appeal………………………………………………………………5
4. Case Laws……………………………………………………………………………6
5. Conclusion………………………………………………………………..……..……7

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INTRODUCTION
This article is for the discussion of Interpleader suit, which comes under Code of Civil
Procedure, 1908 (hereinafter the Code), in the class as an evaluation scheme for internal
assessment. This article help get us in depth understanding of Interpleader Suit.
The meaning of interplead is to litigate with each other to settle an issue in subject matter
regarding claim of third party. Third party may be a single person or many persons involved
in the subject matter independently. In India, interpleader suit is defined in Section 88 read
with Order XXXV of the Code. A appeal can be made if an interpleader suit is dismissed
under Order XLIII, Rule 1 of the Code.
In this article, we will discuss evolution, commentaries, and judgements which will give us a
wider approach and intrinsic understanding. Information and procedures are taken from
various sources, such as Court judgments, Legal literatures, Review Articles, Text books and
Internet for better understanding.
Let us discuss the concepts of Interpleader Suit in detail.

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1. EXPLANATION
“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.” - Halsbury’s Laws of England1
Interpleader suit is defined in Section 88 read with Order XXXV of the Code.
88. Where interpleader suit may be instituted.- Where two or more persons claim adversely to
one another the same debt, sum of money or other property, movable or immovable, from
another person, who claims no interest therein other than for charges or costs and who is
ready to pay or deliver it to the rightful claimant, such other person may institute a suit of
interpleader against all the claimants for the purpose of obtaining a decision as to the person
to whom the payment or delivery shall be made and of obtaining indemnity for himself:
Provided that where any suit is pending in which the rights of all parties can properly be
decided, no such suit of interpleader shall be instituted.
The main components of Section 88 are:
• Where two or more persons claim adversely;
• The same debt, Money or other property - Movable or Immovable;
• from a person - who claims no interest - ready to pay or deliver it to the rightful claimant;
• such other person files suit of interpleader - against all the claimants;
• Proviso - No suit pending for the similar rights of Parties involved.
In an interpleader suit, dispute is between defendants who are claiming their rights over the
money, debt or property, lying with the plaintiff. Plaintiff has no interest except the charges or
costs involved in the maintenance or preservation. Plaintiff may file an interpleader suit in the
court to deliver the property to the rightful claimant.
Section 88 should be read with Order XXXV of the Code, which consists six Rules.

2. PLAINT & PLAINTIFF


Rule 1 2 of Order XXXV of the code requires plaintiff to state specifically that he has no
interest in the subject matter in dispute other than charges and costs incurred during the
possession of the said property or money as stated in Section 88 of the Code. It also states
that the claims made by the defendants must be severally and independently and there should
be no collusion between the plaintiff and any of the defendants.
Rule 23 of Order XXXV requires plaintiff to pay or place the thing claimed in the custody of
the court, if it is possible to pay or place the same.
On successful institution of suit, court may provide for the costs incurred by the plaintiff, as
specified in Rule 64 of Order XXXV of the Code. Court may give plaintiff a charge on the
things claimed if the rightful claimant would not pay the costs to him.

1Halsbury’s Laws of England (Fourth Edition), Volume 37, Para 264


2 1. Plaint in interpleader suit.- In every suit of interpleader the plaint shall, in addition to the other statements
necessary for plaints, state—
(a) that the plaintiff claims no interest in the subject matter in dispute other than for charges or costs;
(b) the claims made by the defendants severally; and
(c) that there is no collusion between the plaintiff and any of the defendants.
3 2. Payment of thing claimed into court.- Where the thing claimed is capable of being paid into court or placed
in the custody of the court, the plaintiff may be required to so pay or place it before he can be entitled to any
Order in the suit.
46. Charge for plaintiff's cost.- Where the suit is properly instituted the court may provide for the costs of the
original plaintiff by giving him a charge on the thing claimed or in some other effectual way.
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Rule 35 of Order XXXV gives procedure where a defendant files a suit against the plaintiff
for the same subject-matter, the court stays the proceedings on being informed by the court
where the interpleader suit has already been instituted. Any costs incurred by the plaintiff in
later suit may be added to the interpleader suit. It is not necessary to stay all other suits if a
plaintiff has filed an interpleader suit, as observed by the court in the case of Satyanarain vs
The District Judge Tonk &Ors 6. This case is discussed below in the section of Case Laws.
Any person, who is having money, debt or property in his possession without having an
interest may file an interpleader suit except Agents and tenants as specified in Rule 57 of
Order XXXV of the Code.

3. FIRST HEARING & APPEAL


As per Rule 48 of Order XXXV of the Code, court may discharge the plaintiff from all
liabilities and award him all the costs and expenses and dismiss him from the suit. As the
issue in subject matter is among defendants and plaintiff has no interest in the subject matter,
court may retain all parties until the final disposition of the suit. Court may adjudicate the title
to the thing claimed to the rightful claimant on the basis of admissions of parties and
evidences. Further, if the admissions of the parties don’t lead to any conclusion, court may
frame and try the suit and any claimant be made as a plaintiff and try the suit in an ordinary
manner.
Any interpleader suit which is dismissed by the court on certain grounds, is appealable under
Order XLIII, Rule 1 of the Code.

5 3. Procedure where defendant is suing plaintiff.- 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 shall, on being informed by the court in which the interpleader suit has been instituted, stay the
proceedings as against him; and his costs in the suit so stayed may be provided for in such suit; but if, and in so
far as, they are not provided for in that suit, they may be added to his costs incurred in the interpleader suit.
6 Satyanarain vs The District Judge Tonk &Ors, 2010 RAJ
7 5. Agents and tenants may not institute Interpleader suits.- Nothing in this Order shall be deemed to enable to
sue their principals, or tenants to sue their landlords, for the purpose of compelling them to interplead with any
persons other than persons making claim through such principal or landlords.
IIIustrations
(a) A deposits a box of jewels with B as his agent. C alleges that the jewels were wrongfully obtained from him
by A, and claims them from B. B cannot institute an interpleader suit against A and C.
(b) A deposits a box of jewels with B as his agent. He then writes to C for the purpose of making the jewels a
security for a debt due from himself to C. A afterwards alleges that C’s debt is satisfied, and C alleges the
contrary. Both claim the jewels from B. B may institute an interpleader suit against A and C.
8 4. Procedure at first hearing.- (1) At the first hearing the court may—
(a) declare that the plaintiff is discharged from all liability to the defendants in respect of the thing claimed,
award him his costs, and dismiss him from the suit; or
(b) If it thinks that justice or convenience so require, retain all parties until the final disposal of the suit.
(2) Where the court finds that the admission of the parties or other evidence enable it to do so, it may adjudicate
the title to the thing claimed.
(3) Where the admissions of the parties do not enable the court so to adjudicate, it may direct—
(a) that an issue or issues between the parties be framed and tried, and
(b) that any claimant be made a plaintiff in lieu of or in addition to the original plaintiff, and shall proceed to try
the suit in the ordinary manner.
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4. CASE LAWS
A. Mangal Bhikaji Nagpase vs State Of Maharashtra And Ors9
Issue: Whether the interpleader suit filed by the original plaintiff was tenable and further
whether in that suit, the plaintiff could challenge the title of his original landlord and
derivative title of the respondent No. 2 ?
Facts: Mangal Bhikaji Nagpase ( appellant herein ) filed an interpleader suit regarding a plot
in a town Chandrapur. Appellant was a tenant in the property originally owned by a lady
named Nagma. After the death of Nagma, the property was recorded on the the name of one -
Munnabai as the holder. Further the property came in the hands of one - Moreshwar Kisanlal
Khatri. Moreshwar Kisanlal Khatri claimed that Munnabai was a dancing girl and she
adopted Chinna Sani, who was a keep of Moreshwar Kisanlal Khatri’s father. Moreshwar
Kisanlal Khatri inducted appellant as a tenant in this property. Moreshwar sold this property
to defendant No.2 Bhopal Singh under a sale deed.
Plaintiff contended that the sale was not valid as Moreshwar had not a valid title as the
adoption of Chinna Sani by Munnabai was not legal.
Defendant No. 2 submitted two exhibit applications, and trial court dismissed the suit.
Plaintiff filed an appeal before appellate court which was also dismissed.
Plaintiff again filed a second appeal before the court,.
The second appeal also dismissed as observed by the court:
• Rule 1 - Plaintiff shall not have any INTEREST in subject-matter statement absent
• As per RULE-4, in first hearing court discharges the plaintiff from all liability.
• As per RULE-5, No tenant can file an interpleader suit against Landlord.
Observation: “The tenant in such a case can attack the derivative title of the transferee-
plaintiff but not on the ground that the transfer-landlord who had initially inducted him in
possession did not have the right to do so would clarify the situation in every possible
manner. It cannot, therefore, be said that the plaintiff in this case could have challenged the
derivative title of respondent No. 2 on the spacious ground that the original landlord
Moreshwar Khatri had no saleable interest. That apart, even in the earlier case reported in Tej
Bhan Madan v. II Additional District Judge AIR 1988 SC 1413 the identical position of law is
obtained. In that view of the matter, it cannot be said that the courts below were in error in
non-suiting the plaintiff. The judgments are correct. There is no merit in this second appeal
and it is liable to be dismissed. 9. In the result, the second appeal is dismissed with costs.”

B. Satyanarain vs The District Judge Tonk &Ors10


Issue: Whether instituting an interpleader suit under section 88 r/w Order XXXV Rule 3,
stays automatically all other civil suits, or not ?
Facts: Respondent No. 3 - Shakuntala Devi filed a suit for eviction, recovery of rent along
with mesne profit against the petitioner. Petitioner filed an interpleader suit as Respondent
No. 4 - Kuldeep had received rent for a period of 3 years and Respondent No. 5 - Anil Kumar
lodged a FIR on the allegation of encroachment. Petitioner also filed a stay application under
Rule 3 of Order XXXV of the Code for the suit filed by Respondent No. 3.
Civil Judge (Junior Divison) as well as District Judge dismissed the suit.
Petitioner filed an appeal before Rajasthan High Court, and court observed that the petitioner
has failed to establish a prime facie case in his favour to stay the eviction proceedings, as all
three respondents filed a common reply to the application filed by the petitioner stating
Shakuntala Devi as the sole owner.

9 Mangal Bhikaji Nagpase vs State Of Maharashtra And Ors, 1997, BOM


10 Satyanarain vs The District Judge Tonk &Ors, 2010, RAJ
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Observation: Court observed that “It is not as if the suit for interpleader is filed, the other
civil suit has to be stayed automatically. In order to invoke the power under Order 35 Rule 3
CPC, the petitioner was duty bound to establish a prima facie case in his favour. In the
present case, the petitioner has failed to establish such a prima facie case in his favour.
Therefor, neither the learned Civil Judge, nor the learned District Judge can be faulted in
passing the impugned orders. Hence, this Court does not find any perversity or illegality in
the order dated 28.09.2007 and in the judgment dated 29.10.2009.
Thus, this petition is devoid of any merit. It is, hereby, dismissed.”

5. CONCLUSION
An interpleader suit can be instituted by anyone except an agent and a tenant against his
principal and landlord respectively. It has been seen in many cases that plaintiff instituted an
interpleader suit, seeking an interest in property, which leads to misuse of Section 88 of the
Code. But the provisions and procedures laid down in the Code in such a manner that they
removes any ambiguity related to the plaintiff interest. A plaintiff is only interested in the
costs and expenses incurred in maintaining and preserving the property (in dispute) and he is
eligible to claim the same under Rule 6 Order XXXV of the Code. Court always try to
discharge the liability of plaintiff and provide him all the costs, which shows that the
legislators wanted to lessen the burden of judiciary as well as people, who are not a part of
litigation process. Interpleader suit may be filed in many other cases such as Contract Law,
Transfer of Property Act, etc as a procedural part. For example, in Contract Law, a bailee can
institute an interpleader suit if there are more than one bailors claiming the moveable
property. So, any substantial problem related to the claiming of rights over a property or thing
can be assessed by the procedural part, ie. Interpleader suit.