Introduction

Actionable Claim is a species of property which is capable of ownership and transfer. Sections 3, 130, 131 and 132 of the Transfer of Property Act, 1882 (TPA) contain provisions in relation to Actionable claim.

Section 3 of TPA

• Section 3 of TPA defines actionable claim.
• It means a claim to any debt, other than a debt secured by mortgage of immoveable property or by hypothecation or pledge of moveable property, or to any beneficial interest in moveable property not in the possession, either actual or constructive, of the claimant, which the Civil Courts recognize as affording grounds for relief, whether such debt or beneficial interest be existent, accruing, conditional or contingent.

Illustrations

• A borrows Rs. 1000 from B and mortgages his house to him. The mortgage debt is not an actionable claim.
• C owes Rs. 1000 to D. D’s claim is an actionable claim.

Instances of Actionable Claim

• Unsecured Debt
• Maintenance allowance payable in future
• A claim for return of earnest money
• Fixed deposit in bank
• Hire-purchase agreement
• Arrears of Rent

Section 130 of TPA

• This section deals with the transfer of actionable claims. It states that -

(1) The transfer of an actionable claim whether with or without consideration shall be effected only by the execution of an instrument in writing signed by the transferor or his duly authorized agent, shall be complete and effectual upon the execution of such instrument, and thereupon all the rights and remedies of the transferor, whether by way of damages or otherwise, shall vest in the transferee, whether such notice of the transfer as is hereinafter provided be given or not.

Provided that every dealing with the debt or other actionable claim by the debtor or other person from or against whom the transferor would, but for such instrument of transfer as aforesaid, have been entitled to recover or enforce such debt or other actionable claim, shall (save where the debtor or other person is a party to the transfer or has received express notice thereof as hereinafter provided) be valid as against such transfer.

(2) The transferee of an actionable claim may, upon the execution of such instrument of transfer as aforesaid, sue or institute proceedings for the same in his own name without obtaining the transferor's consent to such suit or proceedings and without making him a party thereto.

Section 131 of TPA

• This section states that every notice of transfer of an actionable claim shall be in writing, signed by the transferor or his agent duly authorized in this behalf, or, in case the transferor refuses to sign, by the transferee or his agent, and shall state the name and address of the transferee.

Section 132 of TPA

• This section deals with the liability of transferee of actionable claim. It states that the transferee of an actionable claim shall take it subject to all the liabilities and equities to which the transferor was subject in respect thereof at the date of the transfer.

Case Law

• In the case of Doriaswami Mudaliar v. D. Aiyangar (1925), Madras High Court held that even though Section 130 of TPA does not prescribe any language or wording of transfer from the language used, the intention must be clearly discernible.