WHAT IS AN INTERPLEADER SUIT?
WHEN AND BY WHOM CAN IT BE
INSTITUTED?
1. INTRODUCTION
Apart from suits of ordinary civil nature disputed between the plaintiff and the defendant there
also exists a category of suits by the name of Interpleader Suits which are disputed between the
defendants only. Section 88 and Order XXXV of the Code of Civil Procedure (CPC) defines and
lays down relevant provisions with respect to the Interpleader suit. The fundamental idea behind
the interpleader suit is “A person Confronted with conflicting demands that he do or pay
something ought not to be liable twice.”1
2. MEANING & CONCEPT OF INTERPLEADER SUIT
Before dwelling upon the details of the Interpleader suit, the following example may help get an
insight into the very concept. A owes money to B which is due on 1 st July. However, B dies
before July 1 and C and D approach A for the payment of the money. Both claim to be the legal
heirs of B. In such a situation where A is ready and willing to make the payment but has no
means to find out whom to pay, he would file an Interpleader suit in the court where the
defendants interplead to establish their respective claims.
3. THE INTERPLEADER DOCTRINE
The interpleader suit is based on the Interpleader Doctrine or rule which evolved in Britain.
There were no well established laws in cases of multiple claimants of some disputed subject-
matter. However, the doctrine evolved through various judgments and eventually came to be
summarized as under.
“A person against whom two or more persons make claim may bring an action for determination
whether he is liable to one or several of the claimants, and if so to what extent, whenever:
(a) the claims involve contentions of fact, or contentions of mixed law and fact, such that the
plaintiff may sustain double or multiple liability as a consequence of the contentions being
determined inconsistently; or
1
Pomeroy, Equity Jurisprudence, § 806, (4th Ed.) 1846.
(b) the claims may exhaust a limited fund to which the claimants look for recovery”.2
4. DEFINITION AND CIRCUMSTANCES WHEN AN INTERPLEADER SUIT CAN
BE FILED
Under Section 88 of CPC, if two or more persons lay down adverse claims over a sum of money,
debt, or moveable/immoveable property from another person, such another person may file an
Interpleader suit in the court. The additional conditions which must be fulfilled are as follows:3
1. Such another person becomes the plaintiff and the former two or more claimants are
called the defendants.
2. The plaintiff must not claim any kind of interest in it apart from the necessary charges
incurred in filing such a suit or maintaining the property.
3. The plaintiff should also be ready and willing to make such payment or deliver the
required possession.
4. On the date of institution of the suit, no other suit must be pending under which the
defendants’ rights are decided or res judicata.
In Asan v. Saroda4, these conditions were re-iterated and the court upheld that the defendants
must lay down adverse claims and the plaintiff, without any interest of his own, must be
willing to pay or deliver the property.
5. PLAINTIFF: WHO FILES THE SUIT
The Plaintiff as stated above is the person who has to make payment or deliver possession to
the defendants. He or she acts as a neutral party aiming at proper payment or delivery
whatever may and it is for this purpose that he or she must approach the court. As mentioned
in Rule 1 of Order XXXV of CPC, the plaintiff himself must not have any interest in the
subject-matter of dispute, the subject-matter must be severally claimed by the defendants and
there must not be any collusion between the plaintiff and the defendants. 5 In respect of the
2
Myron Moskovitz, An Historical and Critical Analysis of Interpleader, 52 Cal. L. Rev. 706 (1964).
3
Code of Civil Procedure 1908, § 88.
4
Asan v. Saroda, AIR 1922 Cal 138.
5
Code of Civil Procedure 1908, Rule 1 Order XXXV.
Plaintiff’s interest, the Bombay High Court in Mangal Bhikaji Nagpase v. State Of
Maharashtra6 upheld that it is limited to the costs incurred only.
5.1. Plaintiff’s Liability
Rule 4 of Order XXXV of CPC provides that at the first hearing of the suit, the court is
empowered to discharge the plaintiff of all liabilities in respect of the property so disputed
and claimed by the defendants.7 At the same, for the purpose of justice and propriety, the
court may even retain all parties and not discharge the plaintiff of such liabilities.
Additionally, the court may even provide the necessary costs to the plaintiff and dismiss him
for the suit to prevent further inconvenience to him.
5.2. Costs to be paid to the Plaintiff
The costs to be paid to the plaintiff are the ones incurred by him in filing the suit and other
activities like safe guarding and maintaining the property. This may even be paid at the first
hearing itself. Rule 6 of Order XXXV of CPC8, provides that upon proper institution of the
Interpleader suit, the court may allow such costs to be reduced from the money, debt or
moveable/immoveable property claimed by the defendants. If not this, the court may even
resort to other efficient means for the same.
5.3. Plaintiff when sued by the defendant
Under Rule 3 of Order XXXV of CPC 9, where the plaintiff was earlier sued by the defendant
with regards the same property, debt or money, such court where the suit is pending, on
being acquainted about the institution of the Interpleader suit, shall stay the proceedings in
the current suit. However, the proceedings are not automatically stayed; the plaintiff
(Interpleader) has to prove a prima facie case in his or her favour.
5.4. When and by Whom can an Interpleader suit Not be Filed
Under Rule 5 of Order XXXV of CPC, the tenant and the agent cannot institute an
Interpleader suit against his or her landlord and principal respectively. This prevents the
tenant from challenging the landlord’s title to the property while the tenancy is subsisting. 10
6
Mangal Bhikaji Nagpase v. State Of Maharashtra (1997) 99 BOMLR 91.
7
Code of Civil Procedure 1908, Rule 4 Order XXXV.
8
Code of Civil Procedure 1908, Rule 6 Order XXXV.
9
Code of Civil Procedure 1908, Rule 3 Order XXXV.
10
CK Takwani, Civil Procedure 427 (6th Ed.) 2009.
In Bharat Bhushan Vij v. Arti Techchandani,11 the court substantiated that the Interpleader
suit can be filed by the tenant in cases where there is a dispute between the legal heirs of the
landlord.
The purpose of this rule is to prevent the landlord or principal from being compelled by the
tenant or agent to interplead with third parties except those claiming through them. However
the applicability of this rule is prima facie limited to tenants and agents only. Therefore an
Interpleader suit filed by a bank with regards multiple claims over a deposit by the customer
and a third party does not fall under the prohibition of this rule.12
Additionally, the proviso to section 88 also lays down that if a suit based on the rights of all
parties is disputed is already pending in some court, the Interpleader suit cannot be filed.
6. CONCLUSION
Thus the Interpleader suit serves as an efficient mechanism to not only aid the plaintiff but
also the courts in reducing the burden of unnecessary suits over the same matter. As already
stated, section 88 and Order XXXV of the CPC are fundamental provisions in this regard.
The Interpleader suit serves as a significant measure to protect a bonafide person from future
condemn in terms of non-fulfillment of his or her obligations due to unnecessary confusion
arising due to multiple claims.13
11
Bharat Bhushan Vij v Arti Techchandani 153 (2008) DLT 247.
12
N.M.N. Duraiswami Chettiar v. Dindigul Urban Co-operative Bank Ltd AIR 1957 Mad 745.
13
Nikhil Jaiswal, INTERPLEADER SUIT – SECTION 88 AND ORDER XXXV OF CPC, 2 JUS IMPERATOR, 7
(2018).
