PROJECT OF CODE OF CIVIL PROCEDURE INTER PLEADER SUIT
SUBMITTED BY – Somnath Tayal
SUBMITTED TO –
ROLL NO – 95/13
Dr. Karan Dhillon
BaLLb, 7th semester
FACULTY (UILS, PU)
Section- B
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ACKNOWLEDGEMENT
I, Somnath studying in the 4rd year of University Institute of Legal Studies, would like to state that in the completion of the project report of C.P.C on the topic “INTER PLEADER SUIT.” I have received a lot of encouragement and support from
various quarters which need special attention. I would first and foremost like to thank and present my sincere gratitude to my teacher, Dr. Karan Dhillon who acted as a guiding light for me and helped me with the completion on this project report. I would also like to thank my friends for their co-operation and support which helped me in successfully completing my project.
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CHAPTERISATION
INTRODUCTION 1.
GENERAL CONCEPT OF SUIT
2.
WHERE INTERPLEADER SUIT MAY BE INSTITUTED
3.
PLAINT IN THE INTERPLEADER SUIT
4.
PAYMENT OF THING CLAIMED IN THE COURT
5.
PROCEDURE WHERE DEFENDANT IS SUING PLAINTIFF
6.
PROCEDURE AT FIRST HEARING
7.
AGENTS AND TENANTS MAY NOT INSTITUTE INTERPLEADER SUIT.
8.
CONCLUSION
BIBLIOGRAPHY
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INTRODUCTION
An interpleader suit is one in which the real dispute is between the defendants only and the defendants interplead, that is to say plead against each other instead of pleading against the plaintiff as in ordinary suit. In every interpleader suit, there must be some debt or sum of money or other property in dispute between the defendants only, and the plaintiffs must be a person who claims no interest therein other than for charges or costs and who is ready to pay or deliver it to such of the defendants as may be declared by the court to be entitled to it. Thus suppose, certain property is claimed by A as well as by B, and X is in possession of that property and claims no interest in the property himself and is ready and willing to deliver it to such party as may be declared by the court to be the rightful owner of it, X as plaintiff may institute an interpleader suit against A and B as defendants. In such a case, X will , as rule, be dismissed from the suit at the first hearing after his costs are provided for , and A and B will be left to interplead and to fight the matter out between themselves as if one of them was plaintiff and other was defendant(O 35, r.4). But before the plaintiff is dismissed from the suit, he must deposit the property in dispute in court(O35, r2). X can even move the court for an order to get his name removed from the suit. It would appear that in such a suit it is not necessary that the plaintiff must admit claim in entirety. To the extent he admits his liability he may ask the rival claimants to interplead. Who claims no interest other than for charges or costs. These words indicate that the plaintiff in an interpleader suit must be in a real position of impartiality. 1 A railway company which claims no interest in goods in its possession other than a lien on the goods for wharfage, demurrage and freight, may institute an interpleader suit where the goods are claimed by two persons adversely to each other.2 A holds in his hands a sum of Rs. 5,000 which is claimed by B and C adversely to each other.A institutes an interpleader suit against B and C. It is found at the hearing that A had entered into
1
Sambiah v SubbaReddiar (1951) 1 MLJ353. Bombay Baroda Rly.co. v Sasoon (1894) 18 Bom 231.
2
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an agreement with B before the institution of the suit that if B succeeded in the suit he should accept from A Rs. 4,000 only in fullsatisfaction of his claim. Here A has, by virtue of the agreement, an interest in the subject matter of the suit, and he is not, therefore, entitled to institute an interpleader suit. The suit must be dismissed.3 A party who has taken an indemnity from one of the claimants is not entitled to file an interpleader suit.4 A suit is not necessarily an interpleader suit and subject to the provisions of this section, merely because one of the reliefs claimed by the plaintiff requires the defendants to interplead together concerning certain claims. The court must have regard to all the prayers of the plaint to determine the exact nature of the suit. 5 A plaint in an interpleader suit can be amended by inclusion of new properties and joinder of new parties.6
GENERAL CONCEPT OF SUIT
The term suit is not defined under the in the C.P.C. but by various decisions it can be said that “Suit ordinarily means a civil proceedings instituted by presentation of a plaint. Civil suit is the institution of litigation for enforcement of civil rights (or substantive rights, it may be against state or individual). A suit is resulted into decree. Without suit there can not be a decree. There are four essentials of a suit7 1. Name of Parties (there must be two opposing parties) - In a suit there must be at least
two parties the plaintiff & the defendant. There is no limitation with regards to number on either side. 2. Cause of Actions – it is a set of facts or circumstances that a plaintiff is required to
prove. A person is party to a suit if there is a cause of action against hi m. The cause or
3
Murrietta v South America Co. (1893) 62 LJQB 396. HariKarmakar v Robin AIR 1927 Rang 91 5 Juggannath v Tulkakera (1908) 32Bom 592. 6 Raja BhagwatiBaksh Singh v Civil Judge AIR 1961 All 599. 7 P.M.Bakshi, Supplement to Mulla’s Code of Civil Procedure (14th ed., Bombay: N.M.Tripati Private Limited, 1992). 4
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the set of events or circumstances which leads or resulted into presentation of a plaint or filing a suit. – lay man language Legally – The cause of action means every facts which is necessary for the plaintiff(s) to be proved with a view to obtain a decree in his favour. Cause of action means all essential facts constituting the right and its infringement. Every plaint must disclose a cause of action if not, it is the duty of the court to reject the plaint – O.7, R.11 3. Subject matter – there must be a subject matter (with what respect or aspect civil dispute
is). Section-9. Courts to try all civil suits unless barred. The Courts shall (subject to the provisions herein contained) have jurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred. [Explanation I].A suit in which the right to property o r to an office is contested is a suit of a civil nature, notwithstanding that such right may depend entirely on the decision of questions as to religious rites or ceremonies. [Explanation II]. For the purposes of this section, it is immaterial whether or not any fees are attached to the office referred to in Explanation I or whether or not such office is attached to a particular place.8 4. Relief claimed by the plaintiff – no court will give relief unless relief is specifically
claimed by the party Relief is of two types1) specific relief and 2) alternative relief. Various stages of civil suit; 8
Ibid 7
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1.
Institution of suit or commencement of suit.
2. Service of summon. 3. Written statement 4. First hearing and framing of issues. 5. Discovery. 6. Production of evidence and final hearing. 7. Arguments. 8. Judgment. 9. Preparation of decree. 10. Execution of decree. Every suit shall be instituted by presentation of a plaint and (every plaint shall be proved by affidavit) by amendment of 2002.- Sec.26
Every suit shall be instituted by presenting a (plaint in duplicate to the court) by amendment of 1999.
Every plaint shall comply the rules contained in O.VI & VII of C.P.C.
A plaint shall not deemed to be duly instituted unless it complies the provisions of O.IV R. 1 & 2.
Particulars of every suit be entered in a book called register of civil suit. When a suit has been instituted, a summon may be issued to the defendant to appear and answer the claim and may be served in prescribed manner (as described in O.V of C.P.C.) – within 30 days (amendment act of 1999) – S. 27
Section 6 – No Court Shall entertain any suit, the amount or value of the subject matter of which exceeds he pecuniary limits of its jurisdiction.- Pecuniary Jurisdiction (Rule – 1) Section 9 – The court shall have jurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred.- Jurisdiction relating to subject matter – (Rule 2)
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Section 15 – Every suit shall be instituted in the court of the lowest grade competent to try it. – (Rule -3) Jurisdiction
Jurisdiction means the extent of power of a court to entertain suits and applications. It signify the power, authority, competency of the court to adjudicate the disputes presented before it. It can be referred to be the right of administration justice by means of law. It
means the power of
authority of a court to enquiry to the facts to apply the law and to pronounce the judgement and to carry it into execution. Territorial Jurisdiction - Every court has its own specific local territorial limits – fixed
geographical boundaries Pecuniary Jurisdiction - The pecuniary jurisdiction of a civil court refers to the amount or the
value of cases that can be presented before it for adjudication, Jurisdiction relating to subject matter - It is power and authority of a court to try a particular
type of suit Original Jurisdiction – In exercise of the original jurisdiction, court tries original suits instituted
in that court. Appellate Jurisdiction – In exercise of the appellate jurisdiction, the court hears appeals from
decree and order passed by subordinate courts. Note :- There are certain court which have only original jurisdiction but some of the courts which have both original and appellate jurisdiction Section 10. Stay of suit - No Court shall proceed with the trial of any suit in which the matter in issue is also directly and substantially in issue in a previously instituted suit between the same parties, or between parties under whom they or any of them claim litigating under the same title where such suit is pending in the same or any other Court in India having jurisdiction to grant the
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relief claimed, or in any Court beyond the limits of India established or continued by the Central Government and having like jurisdiction, or before the Supreme Court.9 Explanation ; The pendency of a suit in a foreign Court does not preclude the Courts in India from trying a suit founded on the same cause of action. Section 11.Res judicata. No Court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a Court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such Court
WHERE INTERPLEADER SUIT MAY BE INSTITUTED
SECTION-88 :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 to the rightful 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: Provided that where any suit is pending in which the rights of all parties can properly be decided, no such suit of interpleader shall be instituted. "To interplead" means "to litigate with each other to settle a point concerning a third party." 10
An interpleader suit is a proceeding by which a person from whom some persons are claiming
same property, debt or money and who does not himself claim such property debt or money and neither dispute such debt, such person can file a suit claiming that he is ready to pay or deliver 9
T.L.VenkataramaAyiar, Mulla on The Code of Civil Procedure (13th ed., Bombay: N.M.Tripathi Private Limited, 1967). 10 T.L.VenkataramaAyiar, Mulla on The Code of Civil Procedure (13th ed., Bombay: N.M.Tripathi Private Limited, 1967).
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the said property or money to rightful claimant and can protect himself from legal proceedings by calling upon such claimants to interplead, that is to say claim against one and other so that title to the property or the debt may be decided. Meaning thereby, an 'interpleader suit' is a suit in which the real dispute is not between the plaintiffs and defendants but between the defendants only and the plaintiff is not really interested in the subject-matter of the suit. Conditions to Institute Interpleader Suit
Following conditions must be satisfied to institute an interpleader suit: (a) there must be some debt, sum of money or other property movable or immovable in dispute; (b) two or more persons must be claiming it adversely to one another; (c) the person from whom such debt, money or property is claimed, must not be claiming any interest therein other than the charges and costs and he must be ready to pay or deliver it to rightful claimant; and (d) there must be no suit pending in which the rights of the rival claimants can be properly decided.
SCOPE AN D APPL I CABI LI TY OF TH E SE CTI ON. Where X is under a liability for any debt, sum of money, or other property, claimed adversely by A or B or more, and he desires protection against a wrong payment or delivery, he can file a suit under this section. The only way, in fact, in which he can protect himself is by filing such a suit; otherwise if he litigated with the claimant separately, he Would have to pay the costs of the successful claimant.It is necessary that the liability to someone must be admitted and there must be no collusion and no interest in the subject matter other than for charges or costs.11 A suit under this section is called an interpleader suit because the plaintiff is really not interested in the matter, but only the defendants interplead asto their claims. In fact each of the defendants so interpleading is virtually in the position of a plaintiff and his claim will be governed by the
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rules of the Limitation Act. 12 A reading of S. 88, Civil P. C., would clearly show that the court does not have jurisdiction to travel beyond what has been admitted by the plaintiff as due from him/her or it. The Court cannot direct any further payment or investigate into any question relating to the transaction alleged between the parties. In order to determine whether a suit is an interpleader suit under the section the Court must have regard to all the prayers in the plaint. The mere fact that the plaintiff requires the defendants to interplead as regards one of the reliefs claimed would not necessarily make it an interpleader suit.13 Where a party in the position of a mere stake-holder is made a defendant in a suit, his proper course is to deposit the money (if it is a suit for money) into Court and ask that the parties really interested may be substituted for himself as defendants. Such deposit by him is a valid discharge for him and if the Court paid it to a wrong person he is not responsible.
But
in
view
of
the
definition
of
the
expression
'interpleader
suit' and the procedure governing such suits given in this section, the Court of Wards can institute interpleader suit against several claimants, when, on the death of any person of whose property the Court of Wards has assumed jurisdiction, the succession to his property is disputed. Such a suit falls prima facie within this section and is not barred by S. 48 of the Punjab Act.14 Also, Order 35, Rule 5 does not bar all interpleader suits as against the landlord. It bars such a suit when a claim adverse to the landlord is put forward by a person not claiming through the landlord himself i.e. when such an adverse claim is put forward on a title independent of the landlord.15 Where in ejectment petition filed by both rival landlords against tenant, a Bank on ground of non-payment of rent - Petitioner one of rival landlord claimed himself to have become exclusive owner of suit property under mutual partition and Bank was not a party to said compromise or settlement - Interpleader suit filed by Bank for deciding title of suit property would be maintainable. Where in an interpleader suit, the original plaintiff, who was a tenant was not claiming any title to the property and the rival defendants were 12
AIR 1925 Mad 497 (562) (DB). (l908)32 Bom 592 (597) (DB). 14 AIR 1954 Pun 103 (104) (DB) . 15 (1979) 2 Cal LJ 7 (15). 13
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claiming title to the property and in fact, the dispute was between the rival defendants and not between the plaintiff and the defendants to the suit, the order holding that one set of claimants to the property will act as a plaintiff and the other set of claimants as defendant to the suit and the rights of tenant would be safeguarded by holding that he would go on depositing the rent in the Court was proper.
Claims must be bona fide and adverse to one another. The claims of the defendants must be bona fide ones, though they need not have a common origin. The Court must be satisfied that there isa real question to be tried. A mere pretext of conflicting claims is not sufficient. Where there was no claim or counter claim between the parties, the provisions of S. 88 would not apply.16 The defendants must also claim the money or property adversely to one another from the plaintiff.17 A decision given on the claims of the co-defendants in an interpleader suit will operate as res-judicata between them.18 It is, however, not necessary that the plaintiff must show the existence of an apparent title in each of the defendants claiming the property in dispute. Nor is it necessary that the claims should be legal claims or rights. Equitable claims and rights can be entertained and given effect to.
Claims must be with reference to the same subject-matter. The rival claims must be with reference to the same debt, sum of money, or other property, but not necessarily to the same extent. It is thus not necessary that each of the defendants should claim the whole of the subject-matter of the suit. Similarly, it is not necessary that the plaintiff should admit the claim as made by the rival claimants in its entirety. He may ask them to interplead to the extent he admits liability. 19 The "same debt, sum of money, or other property" would not, it is conceived, include a claim for unliquidated damages, though it might include a chose in action.
16
(1992) 1 Pat LJR 365 (372).
17
AIR 1922 Cal 138 (139) (DB). AIR 1928 Oudh 1:55 (179) 19 AIR 1966 AndhPra 92 (95). 18
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Order 6, R. 17 applies to an interpleader suit and if it appears from the pleadings that there is some further property besides the subject-matter of the interpleader suit which is part of the estate but has somehow been omitted from it, it can be brought within the suit by way of amendment of the plaint. This section does not prevent such a procedure being adopted.20
Plaintiff should claim no interest in the subject-matter. The plaintiff must be in an impartial position21. If he has, in some way, identified himself with one of the parties, in the sense that it will make a difference to him which of the two succeeds, an interpleader suit will not lie.22 Thus, a person who has taken an indemnity from one of the claimants, cannot file a suit under this section, though he will not be refused relief, if he has merely a natural affinity for one side rather than the other. A right of lien. e. g., for wharfage, demurrage or freight, is not an interest in the property for the purposes of this section.23 6. "Charges or costs", meaning of.
The words "charges or costs" include costs of suit, freight, warehouse rent, dock rent, wharfage, demurrage and other charges. A lien can be declared for such charges in an interpleader suit, but the amount of those charges, if disputed, ought to form the subject of a separate proceeding between the lien-holder and the adjudicated claimant.24 (3) Plaintiff must be ready to payor deliver the property to the rightful owner. (Order 35, Rule 2.). Addition of parties in interpleader suit.(Order 1, Rule 10.)
PLAINT IN THE INTERPLEADER SUIT
20
AIR 1961 ALL 559 (561). T.L.VenkataramaAyiar, Mulla on The Code of Civil Procedure (13th ed., Bombay: N.M.Tripathi Private Limited, 1967). 22 AIR 1952 Mad 564 (564). 23 (1894) 18 Bom 231 (234,235). 24 (1894) 18 Bom 231 (235). 21
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R. 1. In every suit of interpleader the plaint shall, in addition the other statements necessary for plaints, 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.
The conditions necessary for the institution and maintainability of the interpleader suit are; (1) some debt or money or other property, movable or immovable, is due from the plaintiff, (2) Two or more persons bona fide claim the same adversely to one another from the plaintiff who is not able to know who the rightful claimant is, (3) Plaintiff should not have anyinterest therein other than for charges or costs, (4) He must be prepared to payor deliverthe same to the rightful claimant and for that purpose unconditionally place it at the disposal ofthe Court and (5) The suit must be instituted bona fide without any collusion for a decree as to the rightful claimant and for obtaining indemnity for himself. Merely because the amount admitted by the plaintiff to be due is less than claimed by the defendants it cannot be said that the plaintiff claimed an interest in the subject-matter in dispute. An interpleader suit will, therefore, be maintainable.25 The expression 'plaint' emphasises the character of the proceedings. It equates it with a proceeding in any other suit. In an interpleader suit it is not open for the Court with limited jurisdiction to direct that the amount deposited should be paid over to one or the other party and such payment is permissible provided the disputing party establishes the claim in Civil Court. Where the plaintiff claims anyinterest in the concerned property the inte rpleader suit has to fail.
25
AIR 1966 AndhPra 92 (94,96).
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The Court does not have jurisdiction to travel beyond what-has been admitted by the plaintiff as due from him/her or it. The Court cannot direct any further payment or investigate into any question relating to the transaction alleged between the parties.26 Tenant cannot file interpleader suit against his landlord.27
PAYMENT OF THING CLAIMED IN THE COURT
R.2. Where the thing claimed is capable of being paid into Court or placed in the custody of the Court, the plaintiff may be required to so payor place it before he can be entitled to any order in the suit.
''May be required to so payor place it." Where the subject-matter of the dispute is a chose in action its disposition as the Court may direct is a sufficient compliance with the rule. The Court has a discretion to make such orders as regards the subject-matter in dispute and the party is bound to obey the order before he can ask for any relief in the suit. This is a further condition that will be imposed upon the party to test his bona fides or disinterestedness. If he is not ready to payor deliver the property to one of the defendants but disputes his title, the suit is not an interpleader suit.28 But if the plaintiff complies with the order of the Court he is fully discharged from liability. Thus, where the plaintiff pays the amount in dispute into-Court for payment to the right person, but the Court pays it to the wrong person the plaintiff cannot be made responsible for the mistake of the Court but is fully discharged from liability.29
26
(2000) 3 Mad LJ 428 (429). AIR 2005 (NOC) 412: 2005 (32) All Ind Case 681 (Raj).
27
28
AIR 1978 Pat 151 (151) (DB)
29
http://www.advocatekhoj.com/library/bareacts/codeofcivilprocedure/88.php?Title=Code%20of%20Civil%20Proce dure,%201908&STitle=Where%20interpleader%20suit%20may%20be%20instituted , retrieve don 22 nd october 2015
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In interpleader suit it is not open for the Court with limited jurisdiction to direct that the amount deposited should be paid over to one or the other party as such payment is permissible provided the disputing party establishes the claim in C ivil Court.
Payment to one of the contestants on security. The money paid into Court cannot be handed over to one of the parties pending the suit even on security after the original plaintiff is discharged and one of the rival defendants to the interpleader suit is made a plaintiff. It must be kept under the control of the Court available for payment at any time to the successful party.
PROCEDURE WHERE DEFENDANT IS SUING PLAINTIFF.
R. 3. 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 theproceedings as against him; and his costs in the suit so stayed may be provided for in such suit; but if, and in so far as, they are not provided for in that suit, they may be added to his costs incurred in the interpleader-suit.
Legi slative changes. Under the old Code proceedings in another suit by the defendant against the plaintiff could be stayed only after a decree in the interpleader suit. Under the present rule, such proceedings can be stayed even on the institution of the interpleader suit.
Scope.
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Before passing an order of stay under O. 35, R. 3, the Court has to consider the applicability or otherwise of the bar contained in O. 35, R. 5.And O. 35, R. 3 in clear terms casts an obligation upon the Court which has seized of an interpleader suit to inform the Court in which suit against plaintiff is pending that an interpleader suit inter parties and in relation to suit property is pending. In other words, the information must come only through Court and none else. O. 35, R. 3 is not applicable to the proceedings before Rent Controller as the said proceedings are not proceedings in a suit. But where ejectment was sought against petitioner tenant of Joint Hindu Family firm by two sets of persons one being sons of landlord to whom the petitioner paid rent and another being purchasers who claimed to have purchased property from widow of thekarta, interpleader suit at the instance of tenant petitioner was maintainable and was obligatory on the Court to stay the ejectment proceedings by the filing of the interpleader suit.30 Where in an interpleader suit the original plaintiffs are not claiming any title to the property and in fact the dispute is between the rival defendants, the rights of tenant would be safeguarded by holding that he would go on depositing the rent in the Court, till decision of the suit. An appeal lies from an order under this rule. (O. 43, R. 1 (p).)
PROCEDURE AT FIRST HEARING.
R. 4. (1) At the first hearing the Court may(a) declare that the plaintiff is discharged from all liability to the defendants in respect of the thing claimed, award him his costs, and dismiss him from the suit; or (b) if it thinks that justice or convenience so require, retain all parties until the final disposal of the suit. (2) Where the Court finds that the admissions of the parties or other evidence enable it to do so, it may adjudicate the title to the thing claimed.
30
(1988) 94 Pun LR 148 (150).
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(3) Where the admissions of the parties do not enable the Court so to adjudicate, it may direct(a) that an issue or issues between the parties be framed and tried, and (b) that any claimant be made a plaintiff in lieu of or in addition to the original plaintiff, and shall proceed to try the suitin the ordinary manner
Legi slative changes. No change is made in R. 4 by the Amendment Act of 1976 or by Amendment Acts of 1999 and 2002. Sub-rule (3) has been adopted from the English Rules of the Supreme Court, and substituted for cl. (d) of the old S. 473. The change expressly authorizes a Court to make one of the claimants a plaintiff in lieu of, or in addition to, the original plaintiff. The question whether a party to an interpleader issue shall be treated as plaintiff or defendant must be decided by the real merits of the case and not by the mere form of the issue itself. The Court may in its discretion add a party claiming to be interested in an interpleader suit upon his own application.31
F irst heari ng. The expression "first hearing" in this rule means the date on which the Court goes into the pleadings in order to understand the contentions of the parties. Hence, the plaintiff in an interpleader suit is entitled to apply to the' Court, as soon as the pleadings have been cornpleted, for being discharged from the suit.32 Clause (a) of R. 4 (1) of O. 35 provides for substantive relief of a declaration by the Court as to the discharge of the plaintiff from all liability to the defendants. Such a declaration prevents a loss. It prevents a liability being fa stened upon the plaintiff.33
31
(1886) 13 Cal 90 (93, 94) (DB). AIR 1938 Cal287 (290). 33 (1977) 79 Bom LR 184 (187, 188). 32
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It is only in cases where the amount is not in dispute and where plaintiff pays into Court the entire amount that the court may declare that the plaintiff is discharged from all liability. Where the amount is in dispute, the Court may declare that the plaintiff is discharged from liability only to the extent of the amount admitted and leave parties to settle their disputes for the balance otherwise or in other proceedings.34In an interpleader suit which was not properly instituted or which was instituted malafide or with ulterior motive the discretion of the Court in awarding costs as against the plaintiff is not in any way taken away. Where order was passed granting permission to open sealed cover in presence of advocate of both parties and opening of packet was considered to be essential in interest of both the parties and defendant also reported no objection if Court permitted the same, objection for opening of sealed cover by defendant at stage of recording evidence on ground that Court had not adopted proper procedure under O. 35, R. 4 cannot be allowed.35
Non-appearance of claimants. On the non-appearance of claimants in a properly instituted interpleader suit the proper course for the Court is laid down under sub-rule (1). It is competent to the Court(1) to discharge the plaintifffrom all liability to the claimants-defendants in respect of the subject-matter in dispute and dismiss him from the suit, (2) to direct the plaintiff to pay the amount into Court to the credit of the proper claimant after deducting his costs. (3) to direct the claimants-defendants to apply for payment and when they appear make one of them a plaintiff and raise an issue, and
34
AIR 1966 AndhPra 92 (96). AIR 2004 AP 165 (167).
35
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(4) to restrain by injunction either defendant in a proper case from taking any proceeding against the plaintiff.36
Sub-rule. (3). The sub-rule expressly provides that once the suit has proceeded on trial it shall be tried like any other suit in the ordinary manner, thus attracting the provisions of O.1, R.10 and O.6, R.17 of the Code. The Court can, therefore, allow amendment of plaint by inclusion of certain property in the subject-matter of the suit and by addition of certainparties as defendants.37 An interpleader suit against a company in liquidation is a suit or proceeding against the company within S. 446 of the Companies Act, 1956 and such a suit cannot be filed or continued without the leave of the Company Court in which liquidation proceedings against the company are pending.
Appeal. An appeal lies from an order under this rule.(0.43, R.1, cl.(p).) An order dismissing the interpleader suit itself or an adjudication upon the claims of the defendants in the interpleader suit will, however, be a decree and appealable as such under Section 96 of the Code. An order adding a defendant to an interpleader suit on his application is one passed under O. 1, R. 10 and not under this rule and, as such, is not appealable.38
AGENTS AND TENANTS MAY NOT INSTITUTE INTERPLEADER SUIT.
R. 5. Nothing in this Order shall be deemed to enable agents to sue their principals, or tenants to sue their landlords, for the purpose of compelling them to
36
AIR 1919 Bom 15 (16). AIR 1978 Pat 151 (152) (DB). 38 AIR 1958 Ker 304. 37
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interplead with any persons other than persons making claim through such principals or landlords.
I llustrations (a) A deposits a box of jewels with B as his agent. C alleges that the jewels were wrongfully obtained from him by A, and claims them from B. B cannot institute an interpleader-suit against A and C. (b) 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 is satisfied, and C alleges the contrary. Both claim the jewels from B, B may institute an interpleader suit against A and C.
I nterpleader suits by agents. This rule declares a prohibition and its concluding part provides an exception. The reason for the rule seems to be that an agent cannot ordinarily dispute the title of his princi pal. The illustrations to the rule explain the rule so far as agents are concerned. In Illustration (a) C claims adversely to A but not through A, whereas in Illustration (b) C claims through k In order to bring the case within the rule it has to be shown that the plaintiff is agent of the defendant and has instituted the suit for the purpose of compelling the defendant to interplead with persons other than persons making claim through him. Thus, where a Court of Wards instituted an interpleader suit against its wards, some of whom after their father's death claimed possession of property for the eldest brother by the rule of primogeniture while others claimed it for all the brothers, the rule of primogeniture not being applicable, it was held that the rival claimants being the wards themselves, the suit did not come within the prohibition enacted in R. 5.39 As to the definitions of agent and principal, see Section 182 of the Contract Act. The relationship between a bank and a customer depositing money in the savings bank account is that of debtor and creditor and not that of agent and principal. Hence, on a dispute as to the ownership of the deposit arising between
39
AIR 1954 Punj 103 (104) (DB).
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the customer and a third person, the interpleader suit filed by the Bank would not come within the prohibition of this rule.40
I nterpleader sui ts by railway company. A railway company by accepting goods for carriage does not become the agent of the consignor. It merely enters into an independent contract with the consignor. It can therefore file an interpleader suit against the consignor and another party claiming adversely to the consignor.41
I nterpleader sui ts by tenants. The prohibition that a tenant cannot file an interpleader proceeding against his landlord is based on the principle that he cannot dispute the title of his landlord during the subsistence of the tenancy.42 A tenant cannot therefore bring a suit against his landlord for the purpose of compelling him to interplead with any person other than a person making claim through such landlord.43 Thus, where a tenant passed two kabuliats in favour of two persons in respect of the same land and then, being threatened by suits by both of them, instituted a suit praying "that the Court may be pleased to declare which defendant has what right in which of the disputed lands, and in what right the plaintiff holds which of the said lands and under whom", it was held by the High Court of Calcutta that the suit was not maintainable. 44 In order that a person may be said to claim through a landlord for the purpose of this rule, the right under which such person claims must have arisen after the commencement of the tenancy. Thus, where A leases a certain property to B, B cannot compel A to interplead with C who claims to have purchased the property from A before the grant of the lease.45 But the doctrine of estoppel between the lessor and the lessee does not apply to disentitle a lessee to dispute the derivative title of one who claims to have since become entitled to the reversion. Thus an interpleader suit by a lessee against the assignees of the lessor and the Government in whom the leased estate vested by virtue of the Bihar Land 40
AIR 1957 Mad 745 (748, 749). AIR 1915 Born 28 (28) (DB). 42 AIR 1940 Bom414 (415) (DB). 43 AIR 1941 Cal512 (515). 44 (1910) 37 Cal552 (557) (DB) 45 AIR 1940 Born 414 (415) (DB). 41
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Reforms Act, for determining whether the rents and royalties held in deposit are payable to which of the defendants is maintainable. The tenant feeling any difficulty in payment of rent can invoke provisions of Order 35 and can file an interpleader suit and can make submission in the same that two persons are treating themselves as landlords and Court should admit that he is a tenant and he should deposit the rent and the Court will decide who is the landlord. Where on death of landlady, the tenant instituted an interpleader suit for determining as to which heir of landlady she should pay the rent, and she started paying rent to one of the two alleged heirs. However, other heir never claimed himself to be landlord qua the plaintiff tenant. Hence, interpleader suit by tenant denying title of her landlord was not maintainable. Where A leases certain lands to B and on A's death two persons claim rent from B, namely A's heir on the one hand and a person who alleges that A was only a benamidar for X whose heir he is, it has been held that the latter must be regarded as claiming through A and that therefore: B can file an interpleader suit compelling the two claimants to interplead with each other. Where a mortgagee does not deny an assignment by him of his rights under the bond to X but only contends that it is avoidable one, the mortgagor may treat the assignee as entitled to the money and is not bound to bring an Interpleader suit compelling the mortgagee and X to interplead with each other.46 The applicability or otherwise of the bar contained in this rule has to be considered before passing an order of stay under O. 35, R. 3. Eviction proceedings are not liable to be stayed at the behest of tenant who otherwise also is not justified to file an interpleader suit in view of bar of O. 35, R. 5.
Charge for plaintiff's costs.
46
AIR 1914 Mad 624 (628) (DB).
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R. 6. Where the suit is properly instituted the Court may provide for the costs of the original plaintiff by giving him a charge on the thing claimed or in some other effectual way. Scope of the rule. This rule provides for the award of costs to the original plaintiff. Such costs when awarded will be deducted from the fund on its being brought to Court or will be a first charge upon the fund or subject-matter.47 Thus in an interpleader suit which is not properly instituted or which was instituted mala fide or with ulterior motive the discretion of th e Courtin awarding costs as against the plaintiff is not in any way taken away. But the plaintiff will not be entitled to costs which have been unnecessarily incurred. Appeal. An appeal lies from an order under this rule.(0.43, R.1, Cl.(p).)
47
(1893) 18 Born 231 (236).
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CONCLUSION
An interpleader suit is a proceeding by which a person from whom some persons are claiming same property, debt or money and who does not himself claim such property debt or money and neither dispute such debt, such person can file a suit claiming that he is ready to pay or deliver the said property or money to rightful claimant and can protect himself from legal proceedings by calling upon such claimants to interplead, that is to say claim against one and other so that title to the property or the debt may be decided. Meaning thereby, an 'interpleader suit' is a suit in which the real dispute is not between the plaintiffs and defendants but between the defendants only and the plaintiff is not really interested in the subject-matter of the suit.A suit under this section is called an interpleader suit because the plaintiff is really not interested in the matter, but only the defendants interplead as to their claims. In fact each of the defendants so interpleading is virtually in the position of a plaintiff and his claim will be governed by the rules of the Limitation Act. A reading of S. 88, Civil P. C., would clearly show that the court does not have jurisdiction to travel beyond what has been admitted by the plaintiff as due from him/her or it. The Court cannot direct any further payment or investigate into any question relating to the transaction alleged between the parties. The claims of the defendants must be bona fide ones, though they need not have a common origin. The Court must be satisfied that there is a real question to be tried. A mere pretext of conflicting claims is not sufficient. Where there was no claim or counter claim between the parties, the provisions of S. 88 would not apply. The defendants must also claim the money or property adversely to one another from the plaintiff. A decision given on the claims of the co-defendants in an interpleader suit will operate as res-judicata between them. It is, however, not necessary that the plaintiff must show the existence of an apparent title in each of the defendants claiming the property in dispute. Nor is it necessary that the claims should be legal claims or rights. Equitable claims and rights can be entertained and given effect to.
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BIBLIOGRAPHY:
BOOKS REFERRED:
D.V.Chitaly, AIR Commentaries: The Code of Civil Procedure (Nagpur: All India
Reporter Limited, 1972). M.S.Mehta, A Commentary on The Code of Civil Procedure (Allahabad: Wadhwa and
Company, 1990).
C.K.Takwani, Civil Procedure (3rd ed., Lucknow: Eastern Book Company, 1996)
P.M.Bakshi, Supplement to Mulla’s Code of Civil Procedure (14th ed., Bombay: N.M.Tripati Private Limited, 1992). T.L.VenkataramaAyiar, Mulla on The Code of Civil Procedure (13th ed., Bombay:
N.M.Tripathi Private Limited, 1967).
WEBSITES REFERRED:
www.vakilno1.com/bareacts/civilprocedure/s
indiankanoon.org/search
www.legalserviceindia.com/article/
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