Order XXIV Rule 4 CPC - Partial or Full Acceptance of Court Deposit
Order XXIV Rule 4 of the Code of Civil Procedure, 1908 explains what happens when a plaintiff accepts money deposited in court by the defendant, either as part payment or in full settlement of a claim. The rule also determines how the court deals with the remaining claim, judgment and litigation costs.
Meaning and scope of Order XXIV Rule 4 CPC
Order XXIV is titled Payment into Court. A plaintiff is the person bringing the civil suit, and a defendant is the person against whom it is brought. A deposit under this Order is money paid into court by the defendant in a suit for debt or damages. Satisfaction in part means accepting the payment without treating the entire claim as settled; satisfaction in full means accepting it as complete settlement of the claim.
Rule 4(1): Acceptance in part and continuation of suit
Where the plaintiff accepts the deposit only in partial satisfaction, the plaintiff may continue the suit for the balance claimed. However, if the court ultimately decides that the defendant's deposit was sufficient to satisfy the whole claim, the plaintiff must pay the costs incurred after the deposit, together with earlier costs attributable to the excessive part of the claim.
This rule permits a plaintiff to pursue a genuine outstanding balance, while discouraging unnecessary litigation over an excessive demand.
Rule 4(2): Acceptance in full and judgment
Where the plaintiff accepts the deposit as full satisfaction, the plaintiff must submit a statement to that effect to the court. The court files the statement and pronounces judgment accordingly. When allocating costs, the court considers which party was more responsible for making the litigation necessary.
Accepting a deposit in full therefore does not automatically mean that the defendant must bear all costs or that the plaintiff will recover costs.
Statutory illustrations explained
Illustration (a): Suit without prior demand
A owes B Rs. 100. Without first demanding payment, and without any reason to believe that waiting to make a demand would be prejudicial, B sues A. A immediately deposits Rs. 100 in court and B accepts it in full settlement. The illustration indicates that B should not be awarded costs because the litigation was presumably unnecessary.
Illustration (b): Defendant initially disputes the claim
In the same circumstances, A first disputes B's claim and only later deposits the money. B accepts it in full satisfaction. The illustration indicates that B should receive the costs of the suit, because A's conduct made litigation necessary.
Illustration (c): Plaintiff makes an excessive claim
A owes B Rs. 100 and is willing to pay it without litigation. B instead sues for Rs. 150. A deposits Rs. 100 and contests liability for the remaining Rs. 50. B accepts Rs. 100 in full satisfaction. The illustration indicates that B should pay A's costs because B pursued an excessive claim.
How Rules 1 to 3 interact with Rule 4
Rule 1: A defendant in a suit for debt or damages may deposit an amount considered sufficient to satisfy the claim at any stage of the suit. Rule 2: Notice of the deposit is given through the court, and the plaintiff may apply for payment, unless the court directs otherwise. Rule 3: Interest on the sum deposited is not allowed to the plaintiff from the date the plaintiff receives notice, even if the deposit falls short of the total claim. Rule 4: The plaintiff's choice to accept the deposit partly or fully affects continuation of the suit, judgment and costs.
Practical considerations
A plaintiff should make clear in the court record whether the amount is accepted in part or in full. If accepted in part, the remaining sum claimed should be identified. If accepted in full, the required statement should be filed. Both parties should retain records of the deposit, notice and any court orders. The allocation of costs depends on the facts and the court's findings; local procedural rules and applicable amendments should also be checked.
Official legislation
Read the Code of Civil Procedure, 1908 (India Code, official PDF), including Order XXIV, Rules 1 to 4 and the three illustrations. The India Code Act record provides the legislative reference. This article explains the central CPC provision; check any applicable state or High Court amendments for a particular case.