CODE OF CIVIL PROCEDURE
PROJECT ON TOPIC ---INTERPLEADER SUIT
SUBMITTED BY – MOHD ADNAN
ROLL NO. ----2019-342-060
SECTION -A
In an interpleader suit, the actual dispute isn’t between the plaintiff and the
defendant but between the defendant who interpleads against each other.
It is unlike an ordinary suit. To interplead means to litigate with each other
to settle a point concerning a third party.
According to Halsbury's laws of England, "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."
Interpleader suits are a legal mechanism that allows a party to deposit
money or property with the court to resolve conflicting claims made by two
or more parties over that money or property. This legal procedure is
designed to protect parties from the risk of multiple lawsuits and
judgments, as well as to ensure that the rightful claimants are identified
and paid without further delay.
In accordance with section 88 of the Civil Procedure Code, two or more
parties may file an interpleader suit against a party who is prepared to pay
or deliver the subject debt, sum of money, or other property (movable or
immovable) to a party who does not claim any interest in it other than the
charges and costs incurred by him.
Interpleader suits can arise in a variety of situations. For example, an
insurance company may receive competing claims for the same policy
benefits from different individuals or entities. Similarly, a bank may face
conflicting claims over a deposit account from a deceased account
holder's heirs. In these cases, interpleader suits provide a way for the
parties to avoid costly and time-consuming litigation by bringing all the
claimants together in a single lawsuit.
Interpleader suits typically begin with the party seeking relief, known as the
interpleader, filing a petition in court. The interpleader must show that they
have no interest in the money or property at issue, but are merely holding it
for the benefit of others. The petition must also identify all parties with a
claim to the money or property, and the interpleader must deposit the
disputed funds or property with the court.
Once the interpleader has deposited the funds or property, the court will
issue an order requiring all claimants to appear and assert their claims. The
claimants must then provide evidence supporting their claims and contest
any claims made by the other parties. The court will then determine the
rightful claimants and distribute the funds or property accordingly. The
interpleader is typically dismissed from the lawsuit once the court has
made its determination.
Interpleader suits provide several benefits to parties involved in disputes
over money or property. First, they allow parties to avoid the costs and
delays associated with multiple lawsuits and judgments. Second, they
ensure that all parties with a legitimate claim are given an opportunity to
present their case in a single proceeding. Finally, interpleader suits provide
a means of resolving disputes in a fair and impartial manner, without any
party having an unfair advantage.
Conditions for instituting an interpleader suit
The following prerequisites must be met before filing an interpleader
lawsuit:
A monetary debt or other item of moveable or immovable property
must be in question.
It must be claimed by two or more people competing with one
another.
Any interest in the money or property other than the charges and
expenses must not be asserted by the person from whom it is being
claimed.
This third party must be prepared and eager to pay or deliver the item
to the legitimate claimant.
There must not be an ongoing lawsuit where the rights of the
competing claimant can be fairly decided.
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
Order 35 of the Civil Process Code outlines the steps for bringing an
interpleader action. The interpleader suit's plaint must include the extra
information below:
1. Other than the fees and costs, the plaintiff asserts no interest in the
matter at issue.
2. The defendants have made the claims on several occasions.
3. The plaintiff and any of the defendants are not conspiring.
4. The court may release the plaintiff from all liability at the first hearing,
pay his legal fees, and dismiss the case altogether. And the court
may make a decision based on the evidence presented.
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.
CONDITIONS FOR INSTITUTING AN INTERPLEADER SUIT
Rule 5 of Order 35 of the Civil Process Code reads as follows:
A tenant cannot sue his landlord, and neither can an agent sue his principal
in an effort to get them to negotiate.
The agent or tenant may launch an interpleader lawsuit against their
principal or landlord, respectively, in cases where the claim is filed through
the principal or landlord.
CASE LAW
In Mangal Bhikaji Nagpase v. State of Maharashtra in the year of 1997,
according to the Bombay High Court, the plaintiff must declare that he has
zero interest on the issue other than expenses and charges.
In Asaan Ali v. Sarada Charan Kastagir, the Calcutta HC held that for a suit
to be an interpleader suit, the applicant must be ready to give over the
property to the claimant and have no financial interest in it; nevertheless, if
the applicant has a financial interest in the litigation, the suit will be
dismissed once the plaintiff's financial interest in the subject matter is
discovered.
Plaintiff: Unless the equity or efficiency of the case demands the presence
of the plaintiff, the court may rule that the plaintiff is absolved from all legal
responsibilities, give him his costs, and discharge him from the claim at the
first hearing itself.
Example: X is in possession of the property claimed by Y and Z adversely. X
does not claim any interest in the property and is ready to deliver it to the
rightful owner he can file an interpleader suit.
conclusion
Interpleader suits are an important legal procedure that enable parties to
resolve disputes over money or property in a fair and efficient manner.
They offer a number of benefits to parties involved in conflicting claims,
including the avoidance of costly and time-consuming litigation, the
opportunity for all claimants to be heard in a single proceeding, and the
assurance that the rightful claimants will be identified and paid. For these
reasons, interpleader suits have become an essential tool for resolving
disputes in a wide range of legal contexts.
