What is an Interpleader Suit?
An interpleader suit is a legal remedy available under the Civil Procedure Code, 1908 (CPC), specifically under Section 88 and Order XXXV. It allows a neutral third party (often called the stakeholder) to approach the court when two or more persons claim the same property or money that the stakeholder is holding.
The stakeholder doesn’t claim any interest in the property except for recovery of costs or charges. The purpose of the suit is to resolve conflicting claims by having the claimants litigate among themselves and relieve the stakeholder from liability.
When Can an Interpleader Suit Be Filed?
A person can file an interpleader suit if the following conditions exist:
- Two or more claimants assert conflicting claims on the same property or money.
- The plaintiff (stakeholder) has no interest in the subject matter other than charges or expenses incurred.
- The stakeholder is ready to deliver the subject matter to the rightful claimant.
- There is a reasonable apprehension of double liability or multiple legal actions.
Example: A bank holds a deposit, and two parties claim ownership of that deposit. The bank may file an interpleader suit to let the court decide who is entitled to the money.
Who Can File an Interpleader Suit?
Only a person who:
- Possesses or controls the disputed property.
- Has no beneficial interest in that property.
- Faces conflicting demands from multiple claimants.
Plaintiff Example: A warehouse owner holding goods claimed by two parties.
Not Eligible: A person who has any legal right or interest in the disputed subject matter.
What are the Legal Provisions for Interpleader Suits in CPC?
Two primary provisions govern interpleader suits under Indian law:
Section 88 of the Civil Procedure Code (CPC)
This section enables a person to file an interpleader suit if they face rival claims and want the court to decide ownership.
Order XXXV of CPC
This order lays down the procedure for filing and handling interpleader suits. It includes:
- Contents of the plaint
- Conditions for appearance of claimants
- Discharge of the plaintiff once the rightful claimant is identified
What Relief Does the Plaintiff Get in an Interpleader Suit?
The court typically grants the following reliefs:
- Discharge of the plaintiff from all future liabilities.
- Injunctions against both parties from initiating parallel proceedings.
- Final judgment to decide the rightful owner among the claimants.
- Costs and expenses, if the plaintiff has incurred any in maintaining the property.
What Are the Limitations of Interpleader Suits?
- The plaintiff cannot claim any personal right in the subject matter.
- The court may dismiss the suit if the plaintiff’s neutrality is doubtful.
- Not maintainable if both claimants don’t have a genuine dispute.
