“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 Halsbury’s Laws of England: The Halsbury’s 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. Saroda1, 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.

1
AIR 1922 Cal 138

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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 Hon’ble 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 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 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

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.

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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 Ltd6, 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 Plaintiff’s 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 plaintiff’s 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
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

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 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.

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Author: Shivam Goel, B.Com (H), LL.B., LL.M. (WBNUJS); Author of: Corporate
Manslaughter & Corporate Homicide: Scope for a New Legislation in India, Penguin-
Partridge, Bloomington, 2015; and Concept of Rights in Islam, Lambert Publications,
Germany, 2014

8
See: National Insurance Co. v. Dhirendra, AIR 1938 Cal 287

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