Interpleader Suits – Guidelines and Landmark Judgements

Aashima Kakkar

What are Interpleader Suits?

The main controversy or dispute in an interpleader suit is between the defendants who inter-plead against each other, rather than between the plaintiff and the defendant of a case. An interpleader suit is characterized by the fact that the plaintiff of the case is not especially involved in the subject matter of the case. The primary and most important purpose of an interpleader suit is to have rival defendants’ claims adjudicated, since there must be some debt, capital, or other property in dispute between the defendants only. It basically means that an interpleader suit is initiated against each other to settle a point regarding a third party.

In an interpleader suit, the plaintiff must be in a position of impartiality and non-arbitrariness. For example: ‘A’ has a total of Rs. 10,000 in his hands, which is being claimed by ‘B’ and ‘C’ in opposition to each other. ‘B’ and ‘C’ are sued by A in an interpleader suit. At the hearing, it was discovered that ‘A’ had agreed with ‘B’ before the suit was filed that if ‘B’ won the suit, he would accept only Rs. 9,000 from ‘A’ in complete fulfilment of his argument. Since ‘A’ has an interest in the subject matter of the suit because of the arrangement, he is not entitled to file an interpleader suit. The complaint should be dismissed.

Legal Provisions related to Interpleader Suits

Section 88 and Order XXXV of the Code of Civil Procedure, 1908 deals with the provisions related to Interpleader suits.

Section 88 states the guidelines related to where an interpleader suit may be instituted, stating the following ingredients of an interpleader suit:

  1. There may be a similar mortgage, sum of money, or other movable or immovable property.
  2. When two or more parties make claims against each other,
  3. The person who is claiming the property must have no interest in it except for charges or expenses and must be able to pay or deliver it to the rightful claimant.
  4. A person who is claiming property may file an interpleader action against all claimants to decide who will receive payment or delivery and to obtain indemnity for himself.

The Hon’ble Calcutta High Court held in Asan v. Saroda[1] that a suit is not interpleader if the defendants do not complain adversely to each other, and the plaintiff does not admit the title of one of the defendants or is willing to pay or deliver the property to him.

The proviso to section 88 further states, “Provided that no such suit of interpleader shall be instituted where any suit is pending in which the interests of both parties can properly be decided.”

Order XXXV Rule 1 – Plaint in an interpleader suit

This rule requires the interpleader to state in his plaint that the plaintiff has no interest in the suit’s subject matter or the defendants’ allegations individually. The interpleader must also claim unequivocally that there is no conspiracy between the complainants and any of the defendants throughout the case. The interpleader must list all the defendants’ arguments in the plaint, as well as his willingness to put the property (if it is moveable) before the court. The Hon’ble Bombay High Court held in Mangal Bhikaji Nagpase vs State of Maharashtra[2] that the plaintiff must affirm in support of Rule 1 that he has no interest in the subject matter in dispute other than for charges or costs.

Order XXXV Rule 2 – Payment of the thing claimed into court

This rule talks about the situation where the thing claimed is capable of being paid into court or placed in the custody of the court, the plaintiff may be obliged to do so before he can be entitled to any order in the suit. The Hon’ble Patna High Court held in Syed Shamshul Haque v. Sitaram Singh & Ors.[3] That the court has discretion to make certain orders as to the subject matter in dispute, and that the party in question must follow the order before seeking relief from the court.

Order XXXV Rule 3 – Procedure where Defendant is suing the Plaintiff

This rule provides that if either of the defendants in an interpleader suit is suing the plaintiff in respect of the subject-matter of such suit, the court in which the suit against the plaintiff is pending must, upon 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 must be provided for in such suit.

Order XXXV Rule 4 – Procedure at first hearing

This rule empowers the court to rule that the plaintiff is released from all liabilities at the first hearing, and as a necessary consequence, the court will grant the plaintiff his costs and dismiss the case. If the court believes that all parties to the suit must be retained for the sake of justice, propriety, and convenience, the plaintiff will not be discharged until the suit is finally resolved. If the court deems it appropriate, it may order that any other issues be framed and tried concurrently with the suit, and that any complainant (that is, the defendant in the interpleader suit) be made a plaintiff instead of or in addition to the original plaintiff.

Order XXXV Rule 5 – Who cannot file Interpleader suit?

In the case of Jugal Kishore & Anr. V. Bhagwan Das[4], the court held that an agent cannot sue his principal, and a tenant cannot sue his landlord for the purpose of forcing those principals/landlords to interplead with persons other than those claiming through them.

Order XXXV Rule 6 – Charge of Plaintiff’s cost

This last rule of this order states that when an interpleader suit is properly initiated, the court will compensate for the original plaintiff’s costs to be charged either by charging him a fee for the item alleged by the defendants or claimants, or by some other similarly successful process.

Landmark case Laws

  • Neeraj Sharma v. The District Sangpur Khadi Gram[5]

The Punjab and Haryana High court stated that agents and tenants are not allowed to file interpleader suits against the principal and landlords, according to Order XXXV Rule 5 of Code of Civil Procedure, 1908. A tenant cannot sue his landlord for pressuring him to interplead with someone other than those who have filed a claim through him. If the other person is claiming the property through the previous landlord and then demanding rent from the tenant, the tenant can file an interpleader suit to resolve such disparate claims by two or more parties. But, if the other person is claiming the right and interest in the property without any reference to the previous landlord and demanding rent from the tenant, the tenant can file an interpleader suit to resolve such disparate claims are not maintainable.

  • Hanumanth vajhula Jagannadha v. Vajhula Annapurna Rajesswaramma[6]

Excess execution questions occur when property not included in or protected by the decree is delivered in execution of the decree, a condition known as “action in excess of the decree” in law. In such circumstances, an appeal under Section 47 of the Code of Civil Procedure, rather than a separate action, is the appropriate recourse for the judgement debtor to reclaim the property delivered more than the decree.


The law enshrined in Section 88 and Order XXXV is one of the most relevant civil laws in the country. This clause is intended to shield a person who has acted in good faith from potential condemnation because he did not fulfil his duty, or in other words, it protects a person’s right to legal costs who claims no interest in property or who is the complainant and to decide the correct argument over the property or debt. If the courts do not protect or ignore such rights, an appeal can be filed with the appellate court under Order XLIII Rule 1 of the Code of Civil Procedure, 1908.

  1. Asan v. Saroda AIR 1922 Cal 138
  2. Mangal Bhikaji Nagpase v. State of Maharashtra (1997) 99 BOMLR 91
  3. Syed Shamshul Haque v. Sitaram Singh & Ors. AIR 1978 Pat. 151
  4. Jugal Kishore & Anr. V. Bhagwan Das AIR 1990 P&H 82
  5. Neeraj Sharma v. The District Sangpur Khadi Gram (2006) 142 PLR 791
  6. Hanumanth vajhula Jagannadha v. Vajhula Annapurna Rajesswaramma 2004 (4) ALD 282


Related Post