INTERPLEADER (Section 88 & Order XXXV CPC)

 

1. Concept and Meaning of Interpleader

An interpleader suit is a special civil remedy that enables a person, who is in possession of property or money claimed by two or more persons adversely, to seek the court’s determination as to who is the rightful claimant, without exposing himself to multiple liability.

The plaintiff in an interpleader suit is not asserting a right, but is merely seeking judicial protection and indemnity.

2. Statutory Basis

• Section 88 CPC – Substantive provision

• Order XXXV Rules 1–6 CPC – Procedural framework

3. Section 88 CPC – Interpleader Suit

Textual Essence

Where:

1. Two or more persons claim adversely to one another

2. The same debt, sum of money, or property (movable or immovable)

3. From a person who:

   • Claims no interest in it (except charges/costs), and

   • Is ready to deliver or pay to the rightful claimant

Such person may institute an interpleader suit against all claimants:

• To obtain a decision as to entitlement, and

• To obtain indemnity.

Proviso

No interpleader suit shall lie if a pending suit already exists in which the rights of all parties can be properly adjudicated.

4. Essential Conditions for Interpleader Suit

An interpleader suit is maintainable only if:

1. Adverse claims exist

2. Claims relate to identical subject-matter

3. Plaintiff has no beneficial interest

4. Plaintiff is ready and willing to part with the property

5. No collusion between plaintiff and any defendant

6. No effective pending suit covering the same dispute

5. Order XXXV CPC – Procedural Provisions

Rule 1 – Plaint in Interpleader Suit

The plaint must specifically state:
(a) Plaintiff claims no interest except charges/costs
(b) Separate claims of defendants
(c) Absence of collusion

➡️ These averments are mandatory; omission is fatal.

Rule 2 – Payment or Deposit into Court

If the subject-matter is capable of being:

• Paid into Court, or

• Placed in Court custody

The Court may require such deposit as a condition precedent for granting relief.

Rule 3 – Where Defendant is Suing Plaintiff

If:

• One claimant has already sued the plaintiff regarding the same subject-matter

Then:

• Proceedings in that suit shall be stayed

• Plaintiff’s costs may be:

  • Provided for in the stayed suit, or

  • Added to costs in the interpleader suit

➡️ Prevents parallel proceedings and harassment.

Rule 4 – Procedure at First Hearing

(1) Court’s Options

The Court may:
(a) Discharge the plaintiff, award costs, and dismiss him from suit
OR
(b) Retain all parties till final adjudication if justice requires

(2) Summary Adjudication

If admissions or evidence suffice, the Court may directly decide title.

(3) Framing of Issues

If not:

• Issues may be framed

• One or more defendants may be converted into plaintiffs

• Suit proceeds as an ordinary civil suit

Rule 5 – Bar on Agents and Tenants

Agents cannot sue principals, and
Tenants cannot sue landlords by interpleader,

❌ Except where claims are made through the principal or landlord.

Illustrations Explained

• Illustration (a): Agent cannot compel principal and third party to interplead

• Illustration (b): Agent may interplead where both claims trace back to the principal

Rule 6 – Charge for Plaintiff’s Costs

Where the suit is properly instituted, the Court may:

• Grant the plaintiff a charge on the property, or

• Adopt any other effective method to secure his costs

6. Nature and Object of Interpleader Suit

• Protective, not adversarial

• Prevents multiplicity of proceedings

• Shields an innocent stakeholder

• Ensures single authoritative adjudication

7. Who Can and Cannot File

Can File

• Bailee

• Banker

• Trustee

• Stakeholder

• Auctioneer (subject to facts)

Cannot File

• Person asserting ownership

• Agent against principal (general rule)

• Tenant against landlord (general rule)

• Person acting collusively

8. Distinction: Interpleader Suit vs Ordinary Suit

Basis	Interpleader Suit	Ordinary Suit
Plaintiff’s Interest	None (except costs)	Claims a right
Cause of Action	Adverse claims of others	Plaintiff’s grievance
Relief	Declaration + indemnity	Substantive relief
Role of Plaintiff	Neutral stakeholder	Contesting party

9. Practical Examples

• Bank facing rival claims over a fixed deposit

• Warehouse keeper facing multiple ownership claims

• Court-appointed receiver holding disputed property

10. Examination Pointers

• Section 88 + Order XXXV must be read together

• Absence of collusion is crucial

• Interpleader is not maintainable if plaintiff has interest

• Rule 5 is a statutory bar, not merely discretionary