Interpleader Suits Section 88 read with

Order XXXV of the Code of Civil Procedure,

1908: Analysis
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.

Preface: 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.

The Halsburys Laws of England: The Halsburys Laws of England (Fourth Edition),
Volume 37, Para 264 (at p.200) states that, 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.

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. Saroda[1], 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 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. The
interpleader in the prayer clause of his plaint must pray the Honble 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.[2]

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.[3]

In the case of, Satyanarain v. District Judge, Tonk & Ors[4], 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
faciecase 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 retained, then, the
court shall not discharge the plaintiff till the final disposal of the suit. 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.

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.[5]

In the case of, N.M.N. Duraiswami Chettiar v. Dindigul Urban Co-operative Bank
Ltd[6], 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 Plaintiffs 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.
 3. In an interpleader suit plaintiffs 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.[7]
5. The party filing an interpleader suit should be in a position to walk-out of the
suit with a mere claim for costs.[8]
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.
[1] AIR 1922 Cal 138

[2] See: Syed Shamshul Haque v. Sitaram Singh & Ors, AIR 1978 Pat. 151

[3] See: Sir Dinshaw Fardunji Mulla, The Key to Indian Practice, Lexis Nexis, 11th
Edition, p.217

[4] See: S.B. Civil Writ Petition No. 15587/2009, High Court of Rajasthan, Date of
Decision: 18.08.2010, Coram: R.S. Chauhan, J.

[5] See: Jugal Kishore & Anr v. Bhagwan Das, AIR 1990 P&H 82

[6] AIR 1957 Mad 745

[7] See: Sambayya v. Subba Reddi, AIR 1952 Mad 564

[8] See: National Insurance Co. v. Dhirendra, AIR 1938 Cal 287
Interpleader Suits
January 2017

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by Shivam Goel

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Section 88 read with Order XXXV of the Code of Civil Porcedure, 1908
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 is 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.

The Halsburys Laws of England (Fourth Edition), Volume 37, Para 264 (at p.200) states that
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.
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. Saroda1, it was held that where the 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 requires the interpleader to state in
his plaint that the plaintiff claims no interest in the subject-matter of the 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. The interpleader
in the prayer clause of his plaint must pray the Honble 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.2
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.3
In the case of Satyanarain v. District Judge, Tonk & Ors4 it was held that it is not as if that once
the suit for interpleader is filed the other 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
retained, then the court shall not discharge the plaintiff till the final disposal of the suit. 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.
Who cannot file an 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.
In the case of N.M.N. Duraiswami Chettiar v. Dindigul Urban Co-operative Bank Ltd, 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 Plaintiffs 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 defendant, but amongst the
defendants themselves.
3. In an interpleader suit plaintiffs 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.
5. The party filing an interpleader suit should be in a position to walk-out of the suit with a mere claim
for costs.
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.

1. AIR 1922 Cal 138.

2. Syed Shamshul Haque v. Sitaram Singh & Ors, AIR 1978 Pat. 151.
3. Sir Dinshaw Fardunji Mulla, The Key to Indian Practice, Lexis Nexis, 11th Edition, p. 217
4. S.B. Civil Writ Petition No. 15587/2009, High Court of Rajasthan, Date of Decision : 18-08-2010, Coram :
R.S. Chauhan, J.
Interpleader Suit
These provisions incor-porated under Order 35 and Order 36 CPC. respectively are not put to use in
Andhra Pradesh at all.

When a person owes a definite sum of money but it is not clear whether the same is payable to one or
the other out of several persons, the person who is due may file an interpleader suit and deposit the
amount into court.

The liability of the person ceases once the amount is so deposited. The several defendants file suits in
court to determine their right to receive the whole or any portion of such amount.

The provision is intended to protect a bona fide person from future list that he did not discharge his
obligation.

If two parties are in dispute on several points, they may agree that the decision on one point or a few
out of several points shall decide the case one way or other.

In such a case the rivals may institute a special case before the court stating that a finding may be
given on certain points and that a decree in favour of one side or the other may be passed on the
basis of such points.

Order 36 obviates the difficulties of parties in locking themselves up in a lengthy legal battle when
the crux of the dispute depends on a single or a few points.

An inter-pleader suit is a suit in which the real dispute is not between the plaintiff and
the defendant but between the defendants only and the plaintiff is not really interested in
the subject matter of the suit.

Peculiar feature of inter-pleader suit, the defendants plead against each other instead of
Pleading against the Plaintiff as in an ordinary suit.

Characteristics of Inter-pleader suit as per Sec. 88 and Order 35, C.P.C. are:

1) the plaintiff does not claim any interest in it except the charges, or costs and is ready
to pay or deliver it to the right claimant;

2) there must be some debt, sum of money or other property movable or immovable in
disputes;

3) two or more persons must be claiming it adversely to one another;

ADVERTISEMENTS:
4) There must be no suit pending in which the right of the rival claimants can be
properly decided.

Procedure:
The plaintiff who seeks to file an interpleader suit shall satisfy the following conditions
laid down by Order 35 of C.P.C.:

(i) The Plaintiff shall state that he has no interest in the subject matter in dispute other
than the charges or costs;

(ii) The claims made by the defendants severally; and

ADVERTISEMENTS:

(iii) There is no collusion between the plaintiff and any of the defendants.

While the inter-pleader suit in progress, if any of the defendants files a suit against the
Plaintiff, that suit shall be stayed under Sec. 10 of C.P.C. Res Subjudice.

The Court may order the Plaintiff to place the thing claimed in the custody of the Court
and provide his costs by giving him a charge on the thing claimed.

Another characteristic feature of inter-pleader suit is that at the first hearing, the Court
may declare that the plaintiff is discharged from all liability, award him his costs and
dismiss him from the suit, unless the justice or convenience so requires his presence.

Exceptions to inter-pleader suit:-According to Rule 5 of Order 35, Section 88 of C.P.C.,

the following persons cannot file inter-pleader suit namely-

(i) An agent cannot sue his principal;

(ii) A tenant cannot sue his landlord.

Ex:
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
Cs debt is satisfied, and C alleges the contrary. Both claim the Jewels from B. B may
institute an inter-pleader suit against A and C.
Note:
This illustration explains when an inter-pleader suit can be filed. Here C claims through
A therefore, B is justified in filing inter-pleader suit under Section 88 C.P.C.