Order XXIV CPC: Payment into Court

Order XXIV of Code of Civil Procedure: Payment into Court

Official Bare Act Text

Override / Mandate Court Discretion Procedural Action Non-Compliance Limitation Monetary

Rule 1. 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. 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. 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. Procedure where plaintiff accepts deposit as satisfaction in part or full

(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 was a full satisfaction of the plaintiff's claim, the plaintiff shall pay the costs of the suit incurred after the deposit.

(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.

Legal Commentary & Landmark Judgments: Order 24

Order XXIV regulates payments of money into court by the defendant in satisfaction of the plaintiff's claim, stopping the accrual of interest from the date of notice to the plaintiff.

Deposit in Satisfaction of Claim [R. 1]: 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, or in part, of the plaintiff's claim.
Notice to Plaintiff [R. 2]: Notice of the deposit shall be given through the court by the defendant to the plaintiff.
Cessation of Interest [R. 3]: No interest shall be allowed to the plaintiff on any sum deposited by the defendant from the date of the receipt of the notice.
Acceptance in Full or Part [R. 4]: Plaintiff may accept money in part satisfaction and continue suit for balance; if he fails to recover more than the deposit, he must pay the defendant's costs incurred after the deposit.

Key Landmark Precedents:

Salem Advocate Bar Association (I) v. Union of India, (2003) 1 SCC 49: The Supreme Court noted that Order 24 encourages early settlement of monetary claims and penalizes stubborn plaintiffs who continue litigation after fair deposits.
Prithi Nath Singh v. Suraj Ahir, AIR 1963 SC 1041: Affirmed that statutory deposits under Order 24 stop the running of commercial interest.

Courtroom Practice & Strategic Litigation Guidance:

If you admit a portion of the plaintiff's debt, deposit that admitted amount into court under Order 24 Rule 1; interest on that sum freezes immediately, and if the plaintiff fails to recover more at trial, they will be ordered to pay your litigation costs under Rule 4.

Order XXIV: Payment into Court