Bailabel Type : bailable

Description

Order 24 of the Civil Procedure Code (CPC) deals with the procedure of making payments into court by the defendant in a civil suit, usually to settle a claim or to offer a certain sum of money in response to the suit. It allows a defendant to deposit money with the court, offering to pay the amount claimed by the plaintiff in full or partially, and this can be done at any stage of the suit. The payment is intended to resolve the issue of liability or discharge the defendant’s obligation to the plaintiff, if the court accepts it.

This order helps to facilitate the settlement of cases by allowing the defendant to offer a monetary settlement, and it provides clear guidelines about the legal process when money is deposited into court in relation to a claim.

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Key Provisions of Order 24

Rule 1: Payment into Court by Defendant

1. Purpose of Payment:
   A defendant may pay money into the court to discharge their liability. This is typically done when the defendant believes that the claim being made by the plaintiff is valid, but they want to settle the claim by offering the amount into court instead of directly paying the plaintiff.

2. Effect of Payment:
   When the payment is made into court, the plaintiff is given the option to accept or reject the payment. If the plaintiff accepts the payment, the dispute is resolved, and the case is disposed of. If the plaintiff rejects the payment, the case will continue, and the court will adjudicate the matter.

3. Acceptance of Payment:

   • If the plaintiff accepts the payment into court, the court will pass a decree in favor of the defendant, meaning that the case is considered settled and the suit will be dismissed.
   • If the plaintiff rejects the payment, the suit proceeds as usual, and the defendant may have to contest the claim in court.

4. Payment with Consent:
   The defendant can make the payment into the court with the plaintiff's consent, which is a formal agreement between the parties to resolve the dispute through the court deposit. If the plaintiff agrees to this, it can be considered a valid settlement.

Rule 2: Tender of Payment and Consequences of Rejection

1. Tender of Payment:
   If a defendant makes a tender of payment (a formal offer to pay) and the plaintiff refuses to accept the amount, the court may order the plaintiff to bear the costs for any further proceedings, especially if the final decree goes in favor of the defendant.

2. Rejection by Plaintiff:

   • If the plaintiff rejects the payment and chooses to continue with the suit, the court may still proceed with the case, and the matter will be resolved in the normal course of trial.
   • However, if the case goes to trial and the court finds in favor of the defendant, the court may order the plaintiff to pay the costs of the suit. In other words, the court may penalize the plaintiff for rejecting a reasonable offer of settlement.

Rule 3: Costs of Suit

• Payment into Court and Costs:
  If a defendant deposits the amount in court and the plaintiff rejects it, the defendant may request the court to allow for the costs of the suit to be awarded to them. The idea is to encourage settlement and avoid unnecessary litigation.

• Cost Shifting:
  If the defendant is successful in the suit after making a payment into court, the court may direct that the defendant’s legal costs be paid by the plaintiff, who rejected the payment, especially if the plaintiff would have been entitled to no more than the amount offered by the defendant in the payment.

Rule 4: Procedure of Payment

1. Deposit in Court:
   • The payment must be made by the defendant into the court registry or another designated place where the court administers funds. The payment will be acknowledged by the court, and the relevant amount will be recorded.
2. Notice of Payment:
   The defendant must give notice to the plaintiff about the deposit, and the plaintiff has the option to accept or reject it.

Rule 5: Effect of Judgment if Payment is Made

• Acceptance of Payment: If the payment is accepted and the case is resolved by this method, the court will issue a decree based on the accepted payment. This settles the matter in full, and the court will not entertain further claims from the plaintiff regarding the same issue.

• Rejection of Payment: If the payment is rejected, and the court rules in favor of the defendant, then the plaintiff may be penalized by paying the costs of the suit. This is a form of discouraging unwarranted litigation and promoting settlement.

Punishment

Consequences of Rejection:

• If the plaintiff rejects a payment into court and proceeds with the case, but the court later rules in favor of the defendant, the plaintiff may be ordered to pay the costs of the proceedings.

Dismissal of Suit:

• If the plaintiff unreasonably refuses the payment, the court may dismiss the suit with prejudice (meaning the case cannot be refiled), especially if the rejection of the payment was in bad faith or without a justifiable reason.

Cost Penalties:

• If the defendant offers a reasonable payment into court, and the plaintiff rejects it, the court can impose costs on the plaintiff, especially if the plaintiff's action is considered an unnecessary prolongation of the dispute.