Order XXIV CPC Rules 1 to 4: Payment Into Court
Order XXIV of the Code of Civil Procedure, 1908 deals with payment into Court by a defendant in a suit for recovery of a debt or damages. Rules 1 to 4 cover deposit of money in satisfaction of the claim, notice to the plaintiff, cessation of interest after notice, and the consequences where the plaintiff accepts the deposit in part or in full.
Rule 1 Order XXIV - Deposit by defendant of amount in satisfaction of claim
The defendant in any suit to recover a debt or damages may, at any stage of the suit, deposit in Court such sum of money as he considers a satisfaction in full of the claim.
Rule 2 Order XXIV - Notice of deposit
Notice of the deposit shall be given through the Court by the defendant to the plaintiff, and the amount of the deposit shall, unless the Court otherwise directs, be paid to the plaintiff on his application.
Rule 3 Order XXIV - Interest on deposit not allowed to plaintiff after notice
No interest shall be allowed to the plaintiff on any sum deposited by the defendant from the date of the receipt of such notice, whether the sum deposited is in full of the claim or falls short thereof.
Rule 4 Order XXIV - Procedure where plaintiff accepts deposit as satisfaction in part
(1) Where the plaintiff accepts such amount as satisfaction in part only of his claim, he may prosecute his suit for the balance; and, if the Court decides that the deposit by the defendant was a full satisfaction of the plaintiff's claim, the plaintiff shall pay the costs of the suit incurred after the deposit and the costs incurred previous thereto, so far as they were caused by excess in the plaintiff's claim.
Procedure where plaintiff accepts the deposit as satisfaction in full
(2) Where the plaintiff accepts such amount as satisfaction in full of his claim, he shall present to the Court a statement to that effect, and such statement shall be filed and the Court shall pronounce judgment accordingly; and, in directing by whom the costs of each party are to be paid, the Court shall consider which of the parties is most to blame for the litigation.
Illustrations
(a) A owes B Rs. 100. B sues A for the amount, having made no demand for payment and having no reason to believe that the delay caused by making a demand would place him at a disadvantage. On the plaint being filed, A pays the money into Court. B accepts it in full satisfaction of his claim, but the Court should not allow him any costs, the litigation being presumably groundless on his part.
(b) B sues A under the circumstances mentioned in illustration (a). On the plaint being filed, A disputes the claim. Afterwards A pays the money into Court. B accepts it in full satisfaction of his claim. The Court should also give B his costs of suit, A's conduct having shown that the litigation was necessary.
(c) A owes B Rs. 100, and is willing to pay him that sum without suit. B claims Rs. 150 and sues A for that amount. On the plaint being filed, A pays Rs. 100 into Court, and disputes only his liability to pay the remaining Rs. 50. B accepts the Rs. 100 in full satisfaction of his claim. The Court should order him to pay A's costs.
Key points under Order XXIV CPC
A defendant may deposit an amount in Court at any stage of a suit for recovery of debt or damages if the defendant considers that amount to satisfy the claim in full. Once notice of the deposit is received, Rule 3 stops further interest on the amount deposited.
If the plaintiff accepts the deposit only in part satisfaction, the suit may continue for the balance. If the plaintiff accepts it in full satisfaction, the Court records that statement and pronounces judgment, while deciding costs by considering which party was chiefly responsible for the litigation.
This page reproduces and explains the central statutory provisions for general legal information. Jurisdiction-specific amendments and current court rules should be checked before relying on the provision in a particular proceeding.