INTERPLEADER SUIT

Write a detailed note on interpleader suit.

In an ordinary suit, whenever a suit is filed by the plaintiff against defendant or against one or more defendants, then he claims something from themselves. In such a case, the court tries to determine the rights and liabilities of the parties and tries to solve the dispute between the parties. After the final determination of the rights and liabilities, the court pronounces its judgment and if the court pronounces its judgment in favour of plaintiff, then it compels the defendant to give the possession of that thing which the plaintiff is claiming from him. This is a procedure of ordinary suit but the Code of Civil Procedure, 1908, also provides the provision of filing a special suit i.e., ‘Interpleader suit’ in which the plaintiff has no interest in the subject matter of the suit. He files the suit against defendants so that their rights may be determined by the court.
Section 88 and Order 35 of the Code of Civil Procedure, 1908, deals with the provisions of ‘Interpleader suit’. According to section 88 of the Code of Civil Procedure, 1908, if a person has a property whether movable or immovable or money or anything belonging to another person and two or more other persons claim that the property, money or thing belongs to them and the former person is also ready to pay or deliver such things to the rightful claimant but he does not know that to whom such money should be paid or property should be delivered then in such a case he can file an interpleader suit and states in the suit that he is ready to pay or deliver the property to the rightful claimant and he has no interest in the property except for the charges or cost which has been paid by him for maintaining that thing, then in such a case, if a person files an interpleader suit then the court determine that who is the rightful claimant and to whom property should be delivered and after determining the rights and liabilities of the claimants the court orders the person who has filed an interpleader suit to deliver such property to a particular claimant and claim indemnity for himself from that claimant.
According to the Halsbury’s law of England, “where a person is under liability in respect of any money, goods or chattels and he is, or expects to be, sued for or in respect of that 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”.
According to this section, if any suit has already been instituted by any of the party and in that suit all the rights can be properly determined by the court then in such a case, an interpleader suit cannot be filed by another person.
In the leading case of Groundnut Extractions Export Development Assn. v. State Bank of India (Bom. 1997), the Hon’ble court held that an interpleader suit is a suit in which the real dispute is not between a plaintiff and a defendant but between the defendants who interplead against each other, unlike in an ordinary suit. In a majority of cases, there is a dispute between a plaintiff and a defendant. In an interpleader suit, the plaintiff is not really interested in the subject matter of the suit.
Moreover, in this case, the Hon’ble court held that the primary object of filing an interpleader suit is to get claims of rival defendants adjudicated. It is the process wherein the plaintiff calls upon the rival claimants to appear before the court and get their respective claims decided. The decision of the court in an interpleader suit affords indemnity to the plaintiff on payment of money or delivery of property to the person whose claim has been upheld by the court.
According to the provisions of Code of Civil Procedure, 1908, before an interpleader suit is to be instituted, the following conditions must be satisfied: –

1. There must be some debt, sum of money or other property movable or immovable in dispute;
2. Two or more persons must be claiming it adversely to one another;
3. The person from whom such debt, money or property is claimed must not be claiming interest therein other than the charges and costs and he must be ready and willing to pay or deliver it to the rightful claimant; and
4. There must be no suit pending wherein the rights of rival claimants can be properly adjudicated.
   In the leading case of National Insurance Co. Ltd. V. Dhirendra Nath (Cal 1938), the Hon’ble court held that a person who has no interest in any debt, sum of money or other property, movable or immovable, except the charges or costs and is ready to pay or deliver the property to the rightful claimant may file an interpleader suit.
   According to Order 35 Rule 2 of Code of Civil Procedure, 1908, if the thing regarding which the interpleader suit has been filed by the plaintiff is capable of being paid into the court or placed in the custody of court then in such a case the court may order the plaintiff to give the custody of that thing to the court. Moreover, according to Order 35 Rule 4 of the Code of Civil Procedure, 1908, the court may at the time of first hearing discharge the plaintiff from all the liabilities and award him with the cost and dismiss him from the suit. If the court thinks that it is in the interest of justice that all the parties must sustain till the disposal of suit then in such a case court will not dismiss the plaintiff from the suit and the court will frame the issues and try the suit to determine the rights and liabilities of the claimants. In this situation, court has power to make any one of the defendants as plaintiff besides the original plaintiff who has filed the suit.
   According to Order 35 Rule 5 of the Code of Civil Procedure, 1908, agent has no right to file an interpleader suit against his principal and tenant has no right to file an interpleader suit against his landlord. According to this rule, if any third person claims that the thing which is in the possession of agent on behalf of his principal belongs to him or claims that the property in which the tenant resides belongs to him then in such a case, tenant or agent cannot file an interpleader suit against his landlord or principal and that third person and cannot plead before the court that their dispute should be solved so as to enable him to provide the possession of that thing against which the interpleader suit has been filed to the rightful claimant.
   In the leading case of Jagganath v. Tulka Hera (Bom 1908), the Hon’ble court held that in order to decide whether a suit is in the nature of an interpleader suit, the court must have regard to all the prayers in the plaint. A suit does not become an interpleader suit merely because the plaintiff requires the defendants to interplead with each other as regards one of the prayers in the plaint.