Section 88 of CPC : Section 88: Where Interpleader-Suit May Be Instituted

Explanation using Example

Imagine a scenario where an individual, Mr. Smith, passes away leaving behind a life insurance policy without a clear beneficiary. Both his wife and his brother claim to be the rightful recipients of the insurance payout. The insurance company, ABC Insurance, does not dispute the policy's validity but is unsure to whom the payout should be made since both parties present compelling arguments and there is ambiguity in the beneficiary designation.

ABC Insurance, seeking to avoid litigation from either party and to ensure the payout goes to the rightful claimant, can file a suit of interpleader in court. By doing so, ABC Insurance asks the court to determine whether Mr. Smith's wife or brother is the rightful beneficiary. The insurance company is willing to pay the policy amount but wants the court's assistance to resolve the conflicting claims and to protect itself from future claims or liabilities regarding this matter.

However, if there was already a pending lawsuit between Mr. Smith's wife and brother concerning the interpretation of Mr. Smith's will which could determine the rightful beneficiary, ABC Insurance would not be able to institute an interpleader suit, as the existing suit would be capable of resolving the dispute over the insurance payout.