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Interpleader suit? Difference between interpleader and impleader?

By an interpleader suit is meant suit in which the real dispute is between the defendants only and the plaintiff is not interested in the subject matter of the suit. The plaintiff brings a suit in which he states that he has certain property which is claimed by the defendants adversely to each other. The plaintiff in a cause seeks the direction of the court as to whom out of the defendants he should deliver the property. Interpleader is civil procedure that allows a plaintiff or a defendant to initiate a lawsuit in order to compel two or more other parties to litigate a dispute. An interpleader action originates when the plaintiff holds property on behalf of another but does not know to whom the property should be transferred. It is often used to resolve disputes arising under insurance contracts. (Maclennan 1905, pp. 5-6.)

Ingredients of interpleader suit:

(1)            There must be some debt:

(2)            or a sum of money:

(3)            or other property in dispute;

(4)            between the defendants only;

(5)            and the plaintiff must be a person,

(6)            who claims no interest therein;

(7)            other than for charges;

(8)            or costs:

(9)            and who is ready to pay;

(10)      or deliver it to such of the defendants:

(11)      as may be declared by the court to be entitled to it.

Section 88 of the Civil Procedure Code:

Section 88 of the Civil Procedure Code explains that an interpleader suit is that where two or more persons claim adversely to one or other the same debt, a sum of money or other property from another person, who claims no interest in the said assets or property. (Section 88 of the Civil Procedure Code 1908)

For example:

“A” dies leaving behind one crore rupees cash in bank account. He had two wives and their children. Both claim to recover the said amount. In order to have genuine claimant, owner, the banker shall file a suit before the court and will get the order about the real owners.

Effects of Interpleader Suit:

A decision given on the claim of the co-defendants in an interpleader suit will operate as res-judicata between them.

Res judicata and Res-sub judice:

As the decision of the court relating to the matters or claims of the defendants will operate as res-judicata between the parties for obtaining complete immunity, they should implead all those persons who have the slightest adverse interest to the subject matter or the suits as relevant parties to the interpleader suit. This is because the court can only grant indemnity against the claims made by the person who were the relevant parties to the interpleader suit hut not against those claims filed by the strangers to such proceedings. It is not ordinarily necessary that each and every defendant should be interested in the entire subject matter of the suit.

Barring of Interpleader Suit:

The proviso to section 88 lays down that where any suit is pending wherein the rights of all parties can properly he decided no such suit of interpleader should ever he instituted. In other words, an interpleader suit will be barred where a suit in which the rights of all parties concerned can properly be decided is already pending. Moreover, when the plaintiff has taken an indemnity from one of the defendants he cannot file an interpleader suit.

Liability of the plaintiff:

Where in pursuance of order of the court passed under 4 or Order 35 the plaintiff has paid the amount so ordered into the court or to the person declared by the court to be rightful claimant. He will stand discharged from his obligation. This will also indemnify him against all claims that any other party to the suit may bring before the court in this behalf.

Order 35 of Code of Civil Procedure, 1908:

Plaint in an Interpleader Suit: Order XXXV, Rule 1:

It requires the interpleader to state in his plaint that, the plaintiff claims no interest in the subject-matter of suit and the claims put forth by the defendants severally. The interpleader must also categorically state that, there is no collusion between the parties to the suit, that is, the plaintiff and any of the defendants. The interpleader must specify in the plaint, the claims made by the defendants severally, and should express his willingness to bring the property (if it is moveable) before the court. The interpleader in the prayer clause of his plaint must pray the Hon’ble Court to grant him the cost incurred by him in instituting the suit and also, any other charges incurred by the interpleader in maintaining and/or safeguarding the property in dispute, which the defendants claim adversely to one another. (Order XXXV, Rule 1 of Code of Civil Procedure, 1908)

According to Order 35, Rule 1, of CPC, in every interpleader suit, in addition to other statements, the plaint shall state:-

  1. That the plaintiff claims no interest in the subject matter in dispute other than the charges or costs.

For example, when consigned goods are claimed by several parties, the railway can bring an interpleader suit claiming only a lien for freight, demurrage etc.

  1. the claims made by the defendants severally , and
  2. that there is no collusion between the plaintiff and any of the defendants.

Payment of the thing claimed into Court: Order XXXV, Rule 2:

It provides that where a thing claimed is such that, it is capable of being paid into the court, then, the plaintiff/interpleader may be required to pay such amount or thing before the court. Thus, the court has discretion to make such orders as regards the subject matter in dispute and the party concerned will be bound to obey the order before it can ask for any relief in the suit. (Order XXXV, Rule 2 of Code of Civil Procedure, 1908)

Procedure where Defendant is suing the Plaintiff, Order XXXV, Rule 3:

It states that, 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, on being informed by the court in which the interpleader suit is pending, shall stay the proceedings in that suit as against him. (Order XXXV, Rule 3 of Code of Civil Procedure, 1908)

Procedure at First Hearing, Order XXXV, Rule 4:

It empowers the court to declare at the first hearing itself, that the plaintiff is discharged from all liabilities and as a necessary corollary the court can award the plaintiff his costs and dismiss him from the suit. However, if the court is of the opinion that justice, propriety and convenience requires that all parties to the suit be retained, then, the court shall not discharge the plaintiff till the final disposal of the suit. If the court finds it necessary, then, it can direct that certain other issues be framed and tried along with other issues albeit the suit, and that any claimant (that is, defendant in the interpleader suit) be made a plaintiff in lieu of or in addition to the original plaintiff. (Order XXXV, Rule 4 of Code of Civil Procedure, 1908)

Who cannot file Interpleader Suit: Order XXXV, Rule 5:

It states that, an agent cannot sue his principal, and similarly, a tenant cannot sue his landlord for the purpose of compelling such principals/landlords to interplead with persons other than the ones claiming through them. (Order XXXV, Rule 5 of Code of Civil Procedure, 1908)

Charge for Plaintiff’s Costs: Order XXXV, Rule 6:

It states that when an interpleader suit is properly instituted, then, the court can provide for the costs to be given to the original plaintiff either by giving him a charge on the thing claimed by the defendants/claimants, or, in some other equally efficacious way. (Order XXXV, Rule 6 of Code of Civil Procedure, 1908)

 

Appeal:

An order dismissing an interpleader suit is appealable. An appeal can be preferred under Order XLIII, Rule 1 of the Code of Civil Procedure, 1908.

Difference between Interpleader and Impleader:

INTERPLEADER: IMPLEADER:
One who makes an interplea is known as interpleader. Interpleader occurs when a third party enters into a lawsuit, usually to determine that party’s rights with regard to property at issue in the lawsuit. The third party becomes a participant in the lawsuit and is known as a third-party defendant and this is known as impleader.
Motion for a third party to enter into a lawsuit in process because a matter is being adjudicated in which they have an interest. Procedural device before trial in which a party joins a third party into a lawsuit because that party is liable to an original defendant
Process by which a third party asks a court to determine which of two rival claims is to be honored by the third party.

 

Joinder and impleader in law processes whereby additional parties or additional claims are brought into suits because addressing them is necessary or desirable for the successful adjudication of the issues.
Section 88 and Order 35 of Code of Civil Procedure 1908 deal with interpleader and interpleader suits. Order 1 rule 10 lays down the procedure of an impleader in a suit.

How Interpleader suit is different from ordinary suits?

The Code of Civil Procedure, 1908 is the procedural or the adjective law of Pakistan in civil matters. Sections 26 and Sections 35-35B read with Orders I (Parties to the Suit), II (Framing of the Suit), IV (Institution of the Suit), VI (Pleadings) and VII (Plaint) provide the procedural principles and rules regarding institution of suits. The word ‘suit’ has wider application. There is a little difference between the suits under the CPC 1908 and the other civil suits. This is under the CPC the suits are instituted by the presentation of the plaint which has particular format. An inter-pleader suit is a suit in which the real dispute is not between the plaintiff and the defendant but between the defendants only and the plaintiff is not really interested in the subject matter of the suit.

Interpleader Suit and General Suits: A Comparative Approach:

Section 88 and Order 35 are related to the Interpleader Suits. Section 88 defines it and Order 35 gives the description of procedural formalities.

Ordinary Suits: Interpleader Suits:
In general suits or ordinary the real dispute is between the plaintiff and the defendant. In such suit the real dispute is not between the plaintiff and the defendant but between the defendants who interplead against the ordinary suit.
In ordinary suit the plaintiff claims the relief or compensation from the defendant. The defendant can also apply for set-off and/or counter-claim. If two or more persons adversely claiming some debt, sum of money or other property movable or immovable in dispute, from a person who does not claim any interest therein except the charges and costs incurred by him and is ready to pay or deliver the same to the rightful claimant, may file an interpleader suit.
An ordinary suit can be instituted in the cases other than those where some debt, sum of money or other property movable or immovable is related. In order to institute such suit there must be some debt, sum of money or other property movable or immovable.
In such suits neither the plaintiff nor the defendant can be exempted from the suit before the final order is passed The Court may exempt the plaintiff from the suit if all liabilities have already been discharged by the plaintiff and may proceed to try the suit in the ordinary manner regarding the determination of the actual owner of the property in dispute.

 

Conclusion:

In the light of the discussion above it is concluded that interpleader suit is regulated by the section 88 and order 35 of the code of civil procedure, 1908 and it is different from other civil suits as discussed above.

Bibliography:

Code of Civil Procedure 1908, Amer Raza.

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