Interpleader Suit: Its meaning

 
                In Halsbury’s Laws of England it has been stated to define interplead “ Where a person  is under liability in respect of a debt or in respect of any money, goods or chattels and he is, or, 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.”

            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 a ordinary suit. In an interpleader suit, the plaintiff is not really interested in the subject matter of the suit.

            Section 88 of Civil Procedure Code provides for interpleader suit. It says where two or more persons claim adversely to one another the same debt, sum of money or other property, movable or immovable, from another person, who claims no  interest therein other than for charges or costs and who is ready to pay or deliver it the rightly claimant, such other person may institute a suit of interpleader against all the claimants for the purpose of obtaining a decision as to the person to whom the payment or delivery shall be made and of obtaining indemnity for himself.

            As per the provision provided in the section, the suit of interpleader shall only be instituted if no suit is pending in which the rights of all parties can be decided.
The 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.

For example: A dies leaving some amounts and valuables in a bank. After demise dispute arose between legal heir regarding share of amount and valuables lying in the bank. At this juncture, bank, who does not claim any interest therein, files an interpleader suit on behalf of the legal heir so that their claim can properly be distributed.

CONDITIONS.

The following conditions must be fulfilled, before an interpleader suit can be instituted:
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.
 
PROCEDURE.

            Order 35 Rule  1 to 4 provides for the procedure of filing interpleader suits.
In every suit of interpleader the plaint shall, in addition to the other statements necessary for plaint, state –

a)        that the plaintiff claims no interest in the subject matter in dispute other than for charges or costs;
b)        the claims made by the defendants severally; and
c)         that there is no collusion between the plaintiff and any of the defendants. [Rule 1]

             As per Rule 2, the plaintiff may be required by order of the Court to pay or place the thing claimed in the custody of the Court if the thing is capable to pay or place before the Court.

            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 shall, on being informed by the Court in which the interpleader suit has been instituted, stay the proceedings as against him; and his costs in the suit so stayed may be provided for in such suit; but if, and insofar as, they are not provided for in that suit, they may be added to his costs incurred in the interpleader suit. [Rule 3]

            The plaintiff may be discharged from all liabilities to the defendant in the first hearing and also awarding him his costs and dismiss him from the suit or may retain all parties until the final disposal of the suit for the purpose of justice and convenience. Also where it is not possible, the Court may direct that an issue or issues between parties be framed and tried, one of the claimants be made a plaintiff in lieu of or in addition to the original plaintiff and the suit shall proceed in an ordinary manner.

WHO CANNOT FILE INTERPLEADER SUIT?

            Rule 5 says an agent cannot sue his principal or a tenant his landlord for the purpose of compelling them to interplead with any person other than persons making claim through such principals or landlords.

Examples:
A deposits a box of jewels with B as his agent. C alleges that the jewels wrongfully obtained from him by a, and claims them from B. B cannot institute an interpleader suit against a and C.

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 C’s debt s satisfied, and C alleges the contrary. Both claim the jewels from B. B may institute an interpleader suit against A and C.