Civil Procedure Code - Interpleader Suit (Order 35, Section 88)

Here is an example.

X is insured by a company. X dies accidentally. His heirs is to get 1 Crore Rs. Now there are two claimants. Each one of saying "That's my money".  What if both claimant file a suit against insurance company ? How can insurance company decide which claimant is real ? What should insurance company do?

 

Well, Order 35 is to the rescue.

In above example, Insurance company owes a money which they are liable to pay. But there are multiple claimants. In such case Insurance company can file a interpleader suit as per order 35 and relax..!

What really is interpleader suit.


Section 88 of Civil Procedure code has provisions relating to it. Below are some of the essentials for filing of interpleader suit.

Now let us go through the provision provided in Order 35.

Rule 1 states about additional details to be included in plaint when suit is interpleader suit. 

The first condition, that plaintiff claims no interest is relaxed in US interpleader jurisdiction. 

Rule 2 states that if plaintiff who is liable to things like debt, money etc which can be submitted to court, then plaintiff should submit such things. So in our insurance example, insurance company might submit the money into the court as per rule 2

Rule 3 talks about already existing suit. If defendant have filed a suit against plaintiff, then such suit can be stayed once interpleader suit is institute. For example if Claimant 1 in our example had filed a suit against insurance company, then such suit will be stayed once Insurance company files a suit.

Summary of Rule 2 and 3:

 

Rule 4 talks about first hearing. In first hearing Court may declare that plaintiff may no more have liabilities. If Defendants who are fighting for claims make some admission based on which court can decide the matter, then court will pass a judgment. If there is some issues to be settled between defendants then court can frame the issue and proceed further.


Rule 5 states about folks who cannot file interpleader suit. It bars to agent filing suit against their principles and tenants against their landlords.

However in certain cases tenants can file a interpleader suit.


That's an overview about interpleader suit.


Legalfundaa

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