Suits by indigent persons & interpleader suits

January 22, 2019

Aim – This article focuses to provide complete knowledge about Indigent persons, Suits by indigent persons & Interpleader suits – The Code of Civil Procedure, 1908

Introductions to Indigent Persons

Order 33 deals with suits filed by ‘indigent persons’. The provisions of Order 33 are intended to enable indigent persons to institute and prosecute suits without payment of any court fees. Generally, a plaintiff suing in a court of law is bound to pay court fees prescribed under the Court Fees Act at the time of presentation of plaint. But a person may be too poor to pay the requisite court fee. This order exempts such person from the court fee at the first instance and allows him to prosecute his suit in forma pauperis, provided he satisfies certain conditions laid down in the order.[1]

An indigent person is defined in explanation one to Rule 1 according to which is a person is an ‘indigent’ person:

if he is not possessed of sufficient means (other than property exempt from attachment in execution of a decree and the subject-matter of the suit) to enable him to pay the fee prescribed by law for the plaint in such suit, or
where no such fee is prescribed, if he is not entitled to property worth one thousand rupees other than the property exempt from attachment in execution of a decree, and the subject-matter of the suit.

Any property which is acquired by a person after the presentation of his application for permission to sue as an indigent person, and before the decision of the application, shall be taken into account in considering the question whether or not the applicant is an indigent person.

In A.A. Haja Muniuddin v. Indian Railway[2], Hon’ble Supreme Court has observed:

“Access to justice cannot be denied to an individual merely because he does not have the means to pay the prescribed fee.”

In Union Bank of India v. Khader International Construction[3], Hon’ble Supreme Court has held:

“Order 33 CPC is an enabling provision which allows filing of a suit by an indigent person without paying the court fee at the initial stage. If the plaintiff ultimately succeeds in the suit, the court would calculate the amount of court fee which would have been paid by the plaintiff if he had not been permitted to sue as an indigent person and that amount would be recoverable by the State from any party ordered by the decree to pay the same. It is further provided that when the suit is dismissed, then also the State would take steps to recover the court fee payable by the plaintiff and this court fee shall be a first charge on the subject- matter of the suit. So there is only a provision for the deferred payment of the court fees and this benevolent provision is intended to help the poor litigants who are unable to pay the requisite court fee to file a suit because of their poverty.

Explanation I to Rule 1 Order 33 states that an indigent person is one who is not possessed of sufficient amount (other than property exempt from attachment in execution of a decree and the subject-matter of the suit) to enable him to pay the fee prescribed by law for the plaint in such suit. It is further provided that where no such fee is prescribed, if such person is not entitled to property worth one thousand rupees other than the property exempt from attachment in execution of a decree and the subject-matter of the suit he would be an indigent person.”

Inquiry into the means of an indigent person

Order 33 rule 1-A states that in the first instance, an inquiry into the means of the applicant should be made by the Chief Ministerial Officer of the court. The court may adopt the report submitted by such officer or may itself make an enquiry.

Order 33 rule 4 states that where the application submitted by the applicant is in proper form and is duly represented, the court may examine the applicant regarding the merits of the claim and the property of the applicant.

Order 33 rule 6 states that the court shall then issue notice to the opposite party and to the Government pleader and fix a day for receiving evidence as the applicant may adduce in proof of his indigency or in disproof thereof by the opposite party or by the Government Pleader. On the day fixed, the court shall examine the witnesses (if any), produced by either party, hear their arguments and either allow or reject the application.

Contents of application

As per Order 33 Rule 2, every application for permission to sue as an indigent person should contain the following particulars:

1. The particulars required in regard to plaints to suits;

2. A schedule of any movable or immovable property belonging to the applicant with the estimated value thereof; and

3. Signature and verification as provided in Order 6 Rules 14 and 15

The application should be presented by the applicant to the court in person unless exempted by the court. Where there are two or more plaintiffs, it can be presented by any of them. The suit commences from the moment an application to sue in forma pauperis is presented.

Rejection of application

As per Order 33 Rule 5, the court will reject an application for permission to sue as an indigent person in the following cases:

1. Where the application is not framed and presented in the prescribed manner; or

2. Where the applicant is not an indigent person; or

3. Where the applicant has, within two months before the presentation of the application, disposed of any property fraudulently or in order to get permission to sue as an indigent person; or

4. Where there is no cause of action; or

5. Where the applicant has entered into an agreement with reference to the subject-matter of the suit under which another person has obtained interest; or

6. Where the suit appears to be barred by law; or

7. Where any other person has entered into an agreement with the applicant to finance costs of the litigation.

8. When permission is granted: Rules 8-9A

9. Where an application to sue as a indigent person is granted, it shall be deemed to be a plaint in the suit and shall proceed in the ordinary manner, except that the plaintiff will not have to pay court fees or process fees.

The court may assign a pleader to an indigent person if he is not represented by a pleader. The central government or the State government may make provisions for rendering free legal aid and services to indigent persons to prosecute their cases. A defendant can also plead set-off or counter claim as an indigent person.

Where permission is rejected: Rules 15-15A

Where the court rejects an application to sue as an indigent person, it will grant time to the applicant to pay court fees. An order refusing to allow an applicant to sue as an indigent person shall be a bar to a subsequent similar application. However, this does not debar him from suing in an ordinary manner, provided he pays the costs incurred by the Government pleader and the opposite party in opposing the application.

Revocation of permission

Order 33 Rule 9 states that the court may, on an application by the defendant or by the Government pleader, revoke permission granted to the plaintiff to sue as an indigent person in the following cases:

1. Where he is in guilty of vexatious or improper conduct in the course of the suit; or

2. Where his means are such that he ought not to continue to sue as an indigent person; or

3. Where he has entered into an agreement under which another person has obtained an interest in the subject-matter of the suit.

Costs

Order 33 Rule 16 states that the costs of an application to sue as an indigent person shall be the costs in the suit.

1. Where indigent person succeeds. – As per Rule 10 where the plaintiff (indigent person) succeeds in the suit, the court shall calculate the amount of court fees and costs and recover from the party as ordered by the court.

2. Where indigent person fails. – As per Rule 11 and Rule 11-A where the plaintiff (indigent person) fails or the suit abates, the court shall order him (plaintiff) to pay court fees and costs.

Realization of court fees

Where an indigent person succeeds in a suit, the state government can recover court fees from the party as per the direction in the decree and it will be the first charge on the subject-matter of the suit. Where an indigent person fails in the suit, the court fees shall be paid by him. Where the suit abates on account of the death of a plaintiff, such court fees would be recovered from the estate of the deceased plaintiff.

Appeals by Indigent Persons

As per Order 44 Rule 1, any person entitled to prefer an appeal, who is unable to pay court fee required for memorandum of appeal, may present an application accompanied by a memorandum of appeal, and may be allowed to appeal as an indigent person.

The present position is that an indigent person may also file an appeal on all the grounds available to an ordinary person. An indigent person can also file cross-objections.

Introduction to interpleader suits

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.

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.^[4]Illustration, A holds in his hands a sum of Rs. 10,000 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 an agreement with B before the institution of the suit that if B succeeded in the suit he should accept from A Rs. 9,000 only in full satisfaction 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.^[5]

A party who has taken an indemnity from one of the claimants is not entitled to file an interpleader suit.^[6] 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. A plaint in an interpleader suit can be amended by inclusion of new properties and joiner of new parties.^[7]

Interpleader suit when initiated

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.” 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.

Test

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.

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.

Claims must be bonafide and adverse to one another.

The claims of the defendants must be bonafide 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.

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. 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 section does not prevent such a procedure being adopted.

Plaintiff should claim no interest in the subject-matter

The plaintiff must be in an impartial position. 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. 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.

Interpleader Suit Plaint

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 bonafide 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 any interest 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 of the Court and

(5) The suit must be instituted bonafide without any collusion for a decree as to the rightful claimant and for obtaining indemnity for himself.

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 any interest in the concerned property the interpleader suit has to fail.

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. Tenant cannot file interpleader suit against his landlord.

Payment of thing claimed in court

”May be required to so pay or 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 bonafides or disinterestedness. If he is not ready to pay or deliver the property to one of the defendants but disputes his title, the suit is not an interpleader suit. 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.

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 at first hearing

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 suit upon his own application.

First hearing

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 completed, for being discharged from the suit.

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 plaintiff from 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

(4) to restrain by injunction either defendant in a proper case from taking any proceeding against the plaintiff.[8]

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 certain parties as defendants.[9]

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.

Exceptions as to agents and tenants

Interpleader 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 principal. 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 the customer and a third person, the interpleader suit filed by the Bank would not come within the prohibition of this rule.

Interpleader suits 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.

Interpleader suits 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. 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.

Charge for plaintiff’s costs

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. Thus in an interpleader suit which is 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.

But the plaintiff will not be entitled to costs which have been unnecessarily incurred. Appeal. An appeal lies from an order under this rule. (Or.43, R.1, Cl.(p).)

Conclusion

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, CPC, 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.

Frequently Asked Questions

1. Who is an indigent person? What should be the content of application that must be adopted in a suit by an indigent person?

Order 33 deals with suits filed by ‘indigent persons’. An indigent person is defined in explanation one to Rule 1 according to which is a person is an ‘indigent’ person or forma pauperis. –

if he is not possessed of sufficient means (other than property exempt from attachment in execution of a decree and the subject-matter of the suit) to enable him to pay the fee prescribed by law for the plaint in such suit, or
where no such fee is prescribed, if he is not entitled to property worth one thousand rupees other than the property exempt from attachment in execution of a decree, and the subject-matter of the suit.

Content of the application– As per Order 33 Rule 2, every application for permission to sue as an indigent person should contain the following particulars:

1. The particulars required in regard to plaints to suits;

2. A schedule of any movable or immovable property belonging to the applicant with the estimated value thereof; and

3. Signature and verification as provided in Order 6 Rules 14 and 15.

2. On what grounds can court reject the application for permission to sue as an indigent person?

As per Order 33 Rule 5, the court may reject an application for permission to sue as an indigent person in the following cases:

Where the application is not framed and presented in the prescribed manner; or
Where the applicant is not an indigent person; or
Where the applicant has, within two months before the presentation of the application, disposed of any property fraudulently or in order to get permission to sue as an indigent person; or
Where there is no cause of action; or
Where the applicant has entered into an agreement with reference to the subject-matter of the suit under which another person has obtained interest; or
Where the suit appears to be barred by law; or
Where any other person has entered into an agreement with the applicant to finance costs of the litigation.
When permission is granted: Rules 8-9A
Where an application to sue as a indigent person is granted, it shall be deemed to be a plaint in the suit and shall proceed in the ordinary manner, except that the plaintiff will not have to pay court fees or process fees.

3. Write a short note on inter-pleader suit.

Section-88 defines interpleader suits under CPC. “To interplead” means “to litigate with each other to settle a point concerning a third party.” 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. 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.

4. Discuss the conditions relating to Inter-pleader suit. What is the test to determine its institution?

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;

(d) there must be no suit pending in which the rights of the rival claimants can be properly decided.

Test- 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.

Edited by – Sakshi Agarwal

Quality Check – Ankita Jha

Approved & Published by – Sakshi Raje

Reference

[1]Lim Pin Sin v. Eng Wan Hock, AIR 306

[2](1992) 4 SCC 736

[3](2001) 5 SCC 22

[4]Sambiah v SubbaReddiar (1951) 1 MLJ353.

[5]Murrietta v South America Co. (1893) 62 LJQB 396.

[6]HariKarmakar v Robin AIR 1927 Rang 91

[7]Raja BhagwatiBaksh Singh v Civil Judge AIR 1961 All 599.

[8]AIR 1919 Bom 15 (16).

[9]AIR 1978 Pat 151 (152) (DB).