Interpleader Suits

 Interpleader Suit

By Shreya Verma

‘Interplead’ as the name suggests means to plead against each other. An Interpleader Suit is filed by a person against whom more than one person are claiming something. It is different from an impleader suit as in an impleader, suit defendant files a lawsuit and brings the third party in his lawsuit who is not a part of the liability. Halsbury’s Laws of England defines interpleader suit as, “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”. In an interpleader suit the real dispute is between the defendants only. It is only the defendants who interpleads as the plaintiff is not interested in the matter. 

 For example, ‘A’ has the possession of a house, which both ‘B’ and ‘C’ are claiming as owners. ‘A’ is not interested in that house and is willing to give it back to the rightful claimant. But he wants lawful maintenance charge he has spent on that property, Here A may claim that:

-> He is not interested in the property; 

-> He is ready to return it to the rightful claimant; 

-> There is no collusion between him and ‘B’ or ‘C’; 

-> He is claiming the rightful charges.

In the above example, it is ‘B’ and ‘C’ who have conflicting interest against each other and none has any conflict with ‘A’.

Interpleader is defined in Section 88 of the Civil Procedure Court, which 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.

Order XXXV read with Section 88 of the Civil Procedure Code, 1908 deals with the provision relating to interpleader Suit. Order XXXV Rule 1 require the interpleader to state in his plaint that, the plaintiff claims no interest in the subject-matter 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 willingness to bring the property (if it is moveable) before the court.  

Rule 2, Order XXXV says 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.

Order XXXV, Rule 3 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.

Order XXXV, Rule 4 talks about the Procedure at First Hearing, it 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 require that all parties to the suit be retained, then, the court shall not discharge the plaintiff till the final disposal of the suit.

Order XXXV, Rule 5 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.

Order XXXV, Rule 6 provides 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.

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.