INTRODUCTION

What is property? Generally the term property is used to describe anything that
is owned by any person or an entity.1 Thus property is anything that can be held
or owned by a person.

Property law is the law which regulates the buying and selling of movable and
immovable property. In India, the dealings in property are regulated by the
Transfer of Property Act, which was passed in 1882. The Act is an exhaustive
code which has defined all kinds of dealings in properties, the rights, duties and
liabilities in detail.

There is a need for law regulating the buying and selling of property because
property is an integral element of a human’s legacy these days as everybody has
ownership over something movable or immovable or tangible or intangible of
some value which requires protection. Generally, the term property does not
include not just the asset of value, but also the rights and liabilities regarding the
property. The term property thus includes both the asset physically and the
rights associated with the owner regarding the asset.2

ACTIONABLE CLAIM

Section 3 of the Transfer of Property Act defines an actionable claim.

According to Section 3 of the Transfer of Property Act, an actionable claim is a

claim to any debt other than a debt secured by mortgage of immovable property
or by hypothecation or pledge of moveable property, or to any beneficial
interest in moveable property not in possession either actual or constructive, of
the claimant, which the civil courts recognize as affording grounds of relief

1
http://legal-dictionary.thefreedictionary.com/property
2
Lectures in Jurisprudence by NK Jayakumar, Third Edition, Page number 279.

ACTIONABLE CLAIN :MEANING AND ITS TRANSFER Page 1

whether such debt or beneficial interest be existent, accruing or conditional or
contingent”.3

An actionable claim is considered to be a species of property which is

transferable and can be owned.

In short, an actionable claim can be considered as anything that is a claim to an

unsecured debt or a claim to any beneficial interest in movable property not in
possession of the claimant.4 An actionable claim is anything on which a claim
can be initiated in any court of relief. It can be inherited and transferred by sale,
mortgage and gift, just like other property. Transfer of this claim either by sale,
mortgage or gift can be completed by simply execution of an instrument in
writing to this effect. Such instrument does not need to be registered. 5 An
actionable claim can be understood to be incorporeal personal property which
can be of any type which is an interest in a corporeal property which is not
currently in the possession of the owner.

Section 130. Transfer of actionable claim

(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 instruments, 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 debtor 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
proceeding and without making him a party thereto.

3
http://serialsjournals.com/serialjournalmanager/pdf/1332139475.pdf
4
https://www.slideshare.net/gagan555/topic-3-actionable-claim
5
http://www.ipropertybook.com/bnm/actionable-claim/

ACTIONABLE CLAIN :MEANING AND ITS TRANSFER Page 2

WHAT ALL ARE CONSIDERED TO BE ACTIONABLE CLAIMS?

From this we have been able to understand that an actionable claim is anything
but property which can be held like any other property. But a basic
understanding as to what is an actionable claim must be obtained in order to
ascertain what all can be constituted as an actionable claim.

Generally, the following are considered to be good examples of actionable

claims. They are:

 Claim for arrear rent;

 Claim for rent to fall due in future.
 An option offered to repurchase the property once sold.
 Benefit of a contract giving option to purchase the land.
 When a contract for purchase of goods is endorsed by the purchaser, by
writing on the back of the contract under his signature that he has sold all
his rights and interest in the goods purchased under the said contract to a
certain person who is named and properly identified in such
endorsement.6

The following are considered to be good examples of actionable claims.

However there are certain instruments considered to be actionable claims but in

reality are not considered to be actionable claims. These are:

 A claim which is decreed.

 Relinquishment of interest of a member retiring from joint Hindu Family
business in favor of the members who continue to be co-parceners of the
same.
 “Right to Sue”, though it is a right but not an actionable claim.
6
http://www.ipropertybook.com/bnm/actionable-claim/

ACTIONABLE CLAIN :MEANING AND ITS TRANSFER Page 3

  A claim for main profits.

In essence, an actionable claim, under section 3 primarily includes

1. An unsecured money debt.

2. A claim in the beneficial interest in the movable property not in
possession of the claimant.7

In English law relating to property, an actionable claim or a “chose in action” is

not only concerned with immovable property. It is considered to be a claim
relating to a simple debt for which there is no security in immovable property.

Examples of “Actionable Claim:-“The following claims are “actionable

claims”:-

1.
Claim for arrear rent;
2.
Claim for rent to fall due in future.
3.
An option offered to repurchase the property once sold.
4.
Benefit of a contract giving option to purchase the land.
5.
When a contract for purchase of goods is endorsed by the purchaser, by
writing on the back of the contract under his signature, that he has sold all
his rights and interest in the goods purchased under the said contract to a
certain person who is named and properly identified in such endorsement.
However the following claims are not “Actionable claims”:-

1. A claim which is decreed.

2. Relinquishment of interest of a member retiring from joint Hindu Family
business in favor of the members who continue to be co-parceners of the
same.
3. “Right to Sue”, though it is a right but not an actionable claim.
4. A claim for main profits.

Transfer of property : meaning and Types

Section 5 of the Act defines “Transfer of Property” as “In the following sections
‘transfer of property’ means an act by which a living person conveys property

7
Section 3 of the Transfer of Property Act, 1882.

ACTIONABLE CLAIN :MEANING AND ITS TRANSFER Page 4

in present or in future, to one or more other living person, or to himself, and one
or more other living persons, and “to transfer property” is to perform such act.

In this section “Living Person” includes “a company or association or body of

individuals whether incorporated or not, but nothing herein contained shall
affect any law for the time being in force relating to transfer of property to or by
companies, associations or bodies of individuals.”

The word ‘transfer’ has also very wide meaning. It may be either transfer of all
the right and interests in the property or transfer of one or more of subordinate
right in the property.

The transfer of property may be made to take place with immediate effect or to
take place on a future date; however the property must be in existence at the
date of transfer. There can be no transfer of future property. The expression ‘in
present or in future’ governs the word ‘conveys’ and not the word ‘property’,
e.g., A transfers his property to B for life and then to C. The transfer in favour
of B is present (although he gets only life interest) but the transfer in favour of
C is future transfer.

The transfer of property as defined under Section 5, is an act between two living
persons. Thus the conveyance of the property must be from one living person to
another living person. However transferee need not be a competent person like
transferor. A transferee may be a minor, insane or child in mother’s womb.

The word “living person” includes corporations and other association of person.
A transfer can be made by a person to himself, as for instance when a person
vests property in trust and himself becomes the whole trustee.

The Act contemplates the following kinds of transfers:

(1) Sale,

(2) Mortgage,

(3) Lease

(4) Exchange, and

ACTIONABLE CLAIN :MEANING AND ITS TRANSFER Page 5

(5) Gift.

Sale is an out-and-out transfer of property. In mortgage, there is a transfer of

limited interest in property. A lease is a transfer of a right to enjoy immovable
property for a certain time or in perpetuity. Exchange is like a sale, but differs
from it as regards the consideration. In sale, the consideration is money, while
in exchange, the consideration is another thing. In a gift, there is no
consideration.

In Harish Chandra v. Chandra Shekhar, AIR 1977 All 44 , it was held that a
realease-deed is a conveyance, hence a transfer of property. If the release deed
states that the releaser was the owner and it shows an intention to transfer his
title and its operative word sufficiently was the conveyed the title it would
amount to transfer.

Persons Competent to Transfer

Section 7 of the Act provides that, “Every person competent to contract and
entitled to transferable property, or authorised to dispose of transferable
property not his own, is competent to transfer such property, either wholly or in
part and either absolutely or conditionally, in the circumstances, to the extent
and in the manner, allowed and prescribed by any law for the time being in
force.”

Operation of Transfer

Section 8 of the Transfer of Property Act provides transfer of different kinds of

property and their legal incidents. It provides, “Unless different intention is
expressed or necessarily implied, a transfer of property passes for with the
transferee all the interest which the transferor is then capable of passing in the
property and in the legal incident thereof.

Such incidents include where the property is land, the easement annexed
thereto, the rent and profits thereof accruing after the transfer and all things
attached to the earth;

and, where the property is a house, the easements annexed thereto, the rent
thereof accruing after the transfer, and the locks, keys, bars, doors, windows and

ACTIONABLE CLAIN :MEANING AND ITS TRANSFER Page 6

all the other things provided for permanent use therewith; and, where the
property is a debt or other actionable claim, the securities therefor except where
they are also for other debts or claims not transferred to the transferee, but not
arrears of interest accrued before the transfer;

and where the property is money or other property yielding income, the interest
or income thereof accruing after the transfer takes effect.”

CONDITIONS FOR A VALID ACTIONABLE CLAIM

1. UNSECURED MONEY DEBT

There are 2 conditions for a debt to be a valid actionable claim. Since an

actionable claim is a debt obligation, there should primarily be a debt which
should be payable in the future. It should be an unsecured debt which can be
acted upon in the future provided the debt is

a. Existent debt
b. Conditional on the performance or non performance of a condition
c. Contingent.

2. CLAIM IN THE BENEFICIAL INTEREST IN THE MOVABLE

PROPERTY NOT IN THE POSSESSION OF THE CLAIMANT.
It is the right of a person to take the possession of movable property from
that of another, is the actionable claim of that person who is the claimant
who has a beneficial interest in that particular property .
The conditions to be fulfilled are:
a. The claim in some movable property
b. The movable property is in possession of another person
c. The beneficial interest or the right of possession of the claimant must
be recognised by a Court of law.

ACTIONABLE CLAIN :MEANING AND ITS TRANSFER Page 7

An important question in recent times was regarding whether promissory notes
can be assigned and in the case of Mulji Mehta & Sons v C Mohan Krishna 8, it
was held that there cannot be an assignment of a promissory note, an
assignment of a debt can be considered to be valid.

TRANSFER OF AN ACTIONABLE CLAIM

Now that what is an actionable claim is established, the conditions necessary for
the transfer of an actionable claim must be known so as to understand the nature
of the transaction. In the Transfer of Property Act, the transfer of an actionable
claim is dealt in Sections 130 to 137 provide for the transfers of actionable
claims.

Section 130 deals with what all constitute a valid transfer of an actionable
claim.

Section 130 entails that the transfer of an actionable claim, irrespective of

consideration is valid only if it is done by the execution of an instrument in
writing signed by the transferor or his duly authorised agent. It shall be effective
from the date of execution of the instrument and all the rights and remedies will
vest in the transferee thereon, provided that every dealing with debt or other
actionable claims by the debtor on the instrument, for the abovementioned is
entitled to recover or enforce other actionable claims valid against the transfer.9

Clause 2 of Section 130 talks about the right of the transferee to institute
proceedings for the actionable claim in his own name without obtaining the
transferor’s consent and making him a party thereto.10

From the statute, we are able to understand the following about the transfer of
an actionable claim:

8
AIR 1997 AP 153
9
Section 130 of the Transfer of Property Act.
10
Section 130 of the Transfer of Property Act

ACTIONABLE CLAIN :MEANING AND ITS TRANSFER Page 8

  The transfer of an actionable claim is valid only if the transfer is brought
into effect through a written instrument signed by the transferor.
Consideration is irrelevant.
 The Actionable claim is considered to be valid against any dealing with
regard to the actionable claim and the transferee is entitled to recover or
enforce other actionable claims valid against the transfer.

The proviso in Section 130(1) is intended for the benefit of the debtor and he is
protected when he pays the debt without notice of the transfer. 11 The written
instrument assigning a debt can be in any form, if the intention to transfer is
clear. A mere letter to the assignee by the claimant that he has assigned the debt
to him is sufficient.

The Section does not prevent the assignment of a part debt.

In the case of Doriaswami Mudaliar v D.K. Aiyangar12, it was held that:

(1) Even though Sec. 130 does not prescribe any language or wording of
transfer, form the language used, the intention must be clearly discernible;

(2) The whole of the debt/beneficial interest must be transferred, a part cannot
be transferred, as a single cause of action will be split up into a number of
causes of action; and,

(3) The letter of transfer must be addressed to the transferee.13

Section 130 however, has an exception. A gift of immovable property by a

Muslim does not require a document because of the applicability of Section

11
Law of Transfer of Property by Vepa P.Sarathi, Fifth Edition, Page number 295.
12
AIR 1925 Mad 753.
13
https://sol.du.ac.in/pluginfile.php/4577/mod_resource/content/1/Document15-1.pdf

ACTIONABLE CLAIN :MEANING AND ITS TRANSFER Page 9

129. However, a gift of an actionable claim by a Muslim must comply with the
requirements of Section 130.14

The reason for this is due to Muslim law on gift being based on tradition. But
for an actionable claim, their personal property will not apply.

The provisions of Section 130 does not apply to cases involving marine or fire
insurance policies.

Section 131 of the Transfer of Property Act stipulates that every notice of the
transfer of an actionable claim shall be in writing which must be signed by the
transferor or the agent who was duly authorized to act on behalf of the principal
or transferor. In case the transferor refuses to sign, the instrument shall state the
name and address of the transferee. The notice must be express in writing and it
must state the name and address of the transferee. These conditions must be
fulfilled for making the instrument valid.

Thus we can conclude that a valid notice must contain the following:

a. It shall be in writing
b. It shall have the name and address of the transferee
c. It shall be signed by the transferor or his duly appointed agent
d. If the transferor refuses to sign, by the transferee or his agent.

CASE LAW:

NAME OF THE CASE: Hunsraj v Nathoo

CITATION: (1970) 9 Bom LR 838.

DECISION:

In this case, the instrument transferring the actionable claim did not have the
required name and address of the transferor. The instrument transferring the
14 14
Law of Transfer of Property by Vepa P.Sarathi, Fifth Edition, Page number 295.

ACTIONABLE CLAIN :MEANING AND ITS TRANSFER Page 10

actionable claim was held to be invalid by the Bombay Court. Hence, it is
established that the signature or the name and address of the transferor must be
present in the instrument transferring the actionable claim. It is a statutory
condition that must be fulfilled for the instrument transferring the actionable
claim to be valid.

It is also understood that the rights of the transferee is not dependent on the
notice. He gets the rights upon the execution of the instrument of transfer.

Furthermore, there is no time limit for giving the notice. A period of one year
was considered to be reasonable in Sadasook Ramopratap v Hoar Miller & Co.15

SECTION 132 OF THE TRANSFER OF PROPERTY ACT, 1882.

Section 132 of the Transfer of Property Act deals with the liability of the
transferee after the actionable claim is transferred to the transferee’s name.
Section 132 states that “The transferee of an actionable claim shall take it
subject to all the liabilities and equities and to which the transferor was subject
in respect thereof at the date of the transfer.16

The liability of the transferee is the same as that of the transferor. It means that
the assignee can get no better title than the assignor and this principle is also
applicable to Court sanctioned sale of property.

In the case of Ram Bhaj v Ram Das17, it was held that this rule extends to an
assignee that has purchased at a Court Sale.

A debtor who is being sued by the assignee of his creditor is entitled to set off a
debt due to him by the assignor on a transaction independent of the debt
assigned.18

15
(1923) 27 CWN 733
16
Section 132 of the Transfer of Property Act, 1882.
17
(1922) 3 Lah 1414.
18
Arunachellam v Subramania (1907) ILR 30 Mad 235,

ACTIONABLE CLAIN :MEANING AND ITS TRANSFER Page 11

SECTION 133 OF THE TRANSFER OF PROPERTY ACT, 1882.

Section 133 of the Transfer of Property Act deals with the solvency of a debtor.
The section states that where the transferor of a debt wants a justification for the
solvency of a debtor. Unless there is a contract to the contrary, then it applies
only on the time of transfer and is limited to the value of the consideration

In other words, it means that the assignor is not bound to give any warranty
regarding the solvency of the debtor. But if he does, it means that the debtor
was solvent at the time of transfer. This also limits the liability of the transferor
only to the quantum of consideration.19

SECTION 134 OF THE TRANSFER OF PROPERTY ACT

Section 134 of the Transfer of Property Act deals with the transfer of a
mortgaged debt. The Section hints that the transfer of an actionable claim can
not only be made by way of mortgage but also by way of mortgage. The Section
dictates that if a debt is transferred for the purpose of securing an existing or
future debt. The debt transferred if received by the transferor or recovered by
the transferee must be applied for two purposes:

a. Of costs of realisation of such transactions.

b. For the satisfaction of the amount secured by the transfer and the
remainder belongs to the transferor.20

An assignment is nothing but the transfer of rights and interests which accrue by
virtue of a debt are transferred from one person to another person, it is called as
an assignment. This is generally seen in banking transactions. Some people

19
Transfer of Property Act by S.N. Shukla, Page 548.
20
Transfer of Property Act by S.N. Shukla, Page 549.

ACTIONABLE CLAIN :MEANING AND ITS TRANSFER Page 12

transfer Insurance and bills as security and transfer them in the name of the
bank.21

It is well known that a debt may be assigned by way of securities. 22 For

example, a right to rent to fall due in future is an actionable claim which may be
the subject of a mortgage.23

An assignment can be made by drafting a formal document or any other written

form. The only prohibition is that it should not be done orally. 24 An actionable
claim can be assigned to anybody apart from those persons mentioned in
Section 136 of the Act.

In the case of Chidambaram Pillai v Doraiswami Chetty, the position and the
meaning of the statute was explained. In the case, it was held that the if a
transfer has been effected under Section 130, then all the rights of the transferee
is vested in the transferor including the right of ownership. Section 134 is
enforced in case where there is any residue after satisfying the debt, then the
owner is entitled to the residue.

In the case of Mulraj Khatau v Vishwanath25, the Privy Council rejected the
contention that the condition of assignment under Section 130 refers only to a
transfer of absolute rights and not a charge.

SECTION 135 OF THE TRANSFER OF PROPERTY ACT.

Section 135 deals with the assignment of rights under policies of insurance
against fire.

21
https://www.bankingschool.co.in/knowledge-capsule/important-banking-laws/laws-related-to-security-
offered-to-banks/assignment-and-actionable-claim/
22
The Transfer of Property Act, 12th edition by Sir Dinshaw Fardunji Mula, Page 1040.
23
Held in the case of Santa Bai v Trust of India Assurance Company Limited, AIR 1945 Bom 11
24
https://advocateselvakumarblog.wordpress.com/2015/03/24/actionable-claim/
25
(1913) ILR 37 Bom 198, 40 IA 24, 17 IC 627.

ACTIONABLE CLAIN :MEANING AND ITS TRANSFER Page 13

The section tells us that these policies are an exception to the general rule as
they cannot be assigned without a transfer of the property that is insured. Hence
they constitute an exception because in the previous cases, the right regarding
the actionable claim was transferred even without the transfer of the ownership
of the property as it was an actionable claim. But in this case, the rights cannot
be assigned unless the transfer of the property insured takes effect. However, a
marine policy can be assigned.

The statute uses the word “absolutely vested”. The person who is being
assigned is a direct beneficiary of the policy and is entitled to receive the sum.
The kind of assignment of insurance policies sanctioned sometimes creates a
26
vested interest instead of an absolute interest in the property.

In the case of Panmal v Oriental Fire and Insurance Company27, the Guwahati
High Court held that where the assets of a partnership are insured and if the firm
is subsequently is dissolved, one of the partners cannot sue for recovery of the
damages unless the policy is assigned in his favour.

SECTION 136 OF THE TRANSFER OF PROPERTY ACT.

Section 136 of the Transfer of Property Act deals with the incapacity of officers
connected with the Courts of Justice. This section of the Act essentially dictates
that any person who comes within the ambit of the words Officers of the Court
of Justice shall buy, or agree to receive any share or interest in any actionable
claim.

The Section essentially bars any person in legal capacity in the Court such as a
judge, an advocate or any other person who can be considered as an officer of a
Court from dealing in the transfer of actionable claims. The main object behind
this provision is to prevent the officers of a court from using their position by

26
www.indiacomlaw.wordpress.com
27
AIR 1979 Gau 70

ACTIONABLE CLAIN :MEANING AND ITS TRANSFER Page 14

virtue of which they know because of their position as a legal practitioner or a
judge.28 However this incapacity extends only to another person’s actionable
claims. This means that the officers of Court are incapacitated from buying and
selling the actionable claims of other people. However, they are not
incapacitated from buying and selling their own actionable claims.

However this provision is not applicable to actionable claims in the nature of

stocks, shares and debentures. It also does not extend to a transfer of movable
property or a mortgage.29

The word buy in the Section does not refer to purchases at Court sales as
Section 136 is subject to Section 2(d).30

It has been held in the case of National Insurance Company v Haridas Basu31
that the purchase of a life insurance policy by a pleader at a Court sale is valid.

A pleader in a Court was not held to be an officer of the Court and are not
restricted or stopped from purchasing property sold in an execution. But the
Courts were not in favour of such purchases even though such purchases were
not illegal.32

The prohibition is said to apply irrespective of whether a suit has been filed on
an actionable claim and after a suit offends a public policy more than the
purchase of such a claim before a suit.33

SECTION 137 OF THE TRANSFER OF PROPERTY ACT, 1882.

Section 137 has been enacted with the objective of protecting or saving of
negotiable instruments. Nothing in the above sections apply to negotiable

28
The of Property Act, 12th edition by Sir Dinshaw Fardunji Mulla, Page 1042
29
Transfer of Property Act by S.N. Shukla, Page 549.
30
The of Property Act, 12th edition by Sir Dinshaw Fardunji Mulla, Page 1043.
31
(1927) 46 Cal LR 225.
32
Nundeepat Mehta v Urquhart (1870)
33
Muni Reddy v Venkata Row (1914) ILR 37 Mad 238, 17 IC 544.

ACTIONABLE CLAIN :MEANING AND ITS TRANSFER Page 15

instruments .These negotiable instruments include stock shares and debentures
which are negotiable either through custom, law is negotiable or a mercantile
document of title to goods.34

Document of title of goods include any document includes a range of such

documents such as

i. Bill of lading
ii. Dock-warrant
iii. Warehouse-keeper's certificate
iv. Railway receipt
v. Warrant or order for the delivery of goods

In simple words, document of title of goods include document which can be or

is used as a proof of possession or control of goods. This document can also
include authorising or purporting to authorise which is done either buy
endorsing or by delivery to the person possessing such a document to transfer or
receive the goods which is represented by the document.35 This provision is in
favour of parties dealing in negotiable instruments.

In the case of Bechuanaland Exploration Co. v. London Trading Co 36, it was

held that even bearer debentures were now considered to be negotiable
instruments in the eyes of law.

Over the years in many cases, many instruments used in financial transactions
have been considered to be instruments.

In the case of an ordinary receipt, it has been held that an endorsement and
transfer of the document is enough to complete the transfer. A document for the
transfer is not necessary.37

34
Section 137 of the Transfer of Property Act, 1882.
35
Transfer of Property Act by Avtar Singh, 2nd edition, Page number 451.
36
(1898) QB 658.

ACTIONABLE CLAIN :MEANING AND ITS TRANSFER Page 16

In the case of shares, assignment of shares can be made by sale, mortgage or
pledge.

In the case of Shatzadi Begum v Giridharlal38, it was held that in the case of
mortgage of shares, the right to enjoy is present but in the case of a pledge, no
such right is present.

37
Held in the case of GG in C v Jayanarayan AIR 1948 Pat 36
38
AIR 1976 AP 273.

ACTIONABLE CLAIN :MEANING AND ITS TRANSFER Page 17

CONCLUSION

It is very lucidly understood that actionable claims are considered and treated as
one of the species of property. It is clearly understood that actionable claims
are also treated as a species of property and therefore is transferable. The
transfer of an actionable claim is unique because an actionable claim is not
physical property such as land or building itself. An actionable can be
understood to be a species of property which is transferable like any other
property. This is a unique species of property which is property other than any
property which is:

 It is not a debt secured by a mortgage of immovable property,

 Or a property which is a pledge on any movable property.
 Or any beneficial interest in any movable property which is not in
possession of the claimants.

It is also very important that a court must realise this particular type of property
unlike the transfer of other properties. This is because this type of property is
generally provided on the grounds of relief to the claimant. Hence it is
imperative for a Court to recognise this kind of property. This is done to protect
the interests of the claimant in the property. Since the claimant gets the property
and the rights associated with the property, it is essential that he gets justice as
the property is being transferred due to the default of the transferor.

It can also be inferred that the transfer of an actionable claim is done in order to
pay the debt of the transferor. On a fundamental level, actionable claims can be
considered as those claims which can be enforced by the Courts.

It is also very clearly understood that a notice is required according to Section

131 and it is essential that the notice must be in writing and the notice must
include the notice of the transfer of an actionable claim shall be in writing
which must be signed by the transferor or the agent who was duly authorized to
ACTIONABLE CLAIN :MEANING AND ITS TRANSFER Page 18
act on behalf of the principal or transferor. In case the transferor refuses to sign,
the instrument shall state the name and address of the transferee. This is an
essential condition for making the transfer of an actionable claim legally valid.
If any of these conditions are not followed, then the notice will not be
considered to be invalid in the eyes of law.

The liability of a transferor is just like any other transfer of property being
enforced. The rights and liabilities of the transferee is shifted to the transferor
just like property rights being transfer ted in a normal transfer of a piece of
property. If the transferee left a charge on the property, then the charge will also
be transferred along with the other property related rights and is also subject to
equities.

An actionable claim can also be assigned to another natural or legal person. It is

widely understood that such assignments take place in case of banking
transactions where loans are taken. It is also the understanding of the researcher
that people even use insurance policies to take loans.

Anyone who comes under the purview of the word “Officers of the Court” will
not be allowed to transact in the transfer of an actionable claim. This is to avoid
such people who are privy to sensitive information which is not available to the
persons apart from such designated persons. However, the exception to this rule
is available. This section only prohibits officers of Court from dealing with
outsiders. It does not prohibit them from dealing with their own actionable
claims.

The Sections of the Act dealing with the transfer of actionable claims is not
applicable to negotiable instruments such as shares and debentures.

An actionable claim is a unique and important type of property which deals with
a species of property that is not material for the transfer of the rights regarding
it. It is the humble opinion of the researcher that an actionable claim is an

ACTIONABLE CLAIN :MEANING AND ITS TRANSFER Page 19

important species of property which in the opinion of the researcher is an
important case which shows the development of property and the legal position
regarding it. Like all other areas, even this area of law is also constantly
evolving and this unique concept is a testament to that. Since property is an
important aspect of society and with the advent of the concept of artificial
persons, the law regarding the transfer of property has developed to the extent
of transferring the rights regarding the property. An actionable claim is the
proof of such development.

ACTIONABLE CLAIN :MEANING AND ITS TRANSFER Page 20

BIBLIOGRAPHY

The Transfer Of Property Act Hardcover – 2015- by Mulla

Property Law Paperback – by Poonam Pradhan Saxena
Transfer of Property Act, 1882 by Universal Law Publishers
http://lexisnexis.in/the-transfer-of-property-act.htm

http://www.ebcwebstore.com/product_info.php?products_id=1220
https://indiankanoon.org/doc/515323/
https://www.sapnaonline.com/books/textbook-transfer-property-act-
5th-avtar-singh-9350358182-9789350358184
http://ecourts.gov.in/sites/default/files/TRANSFER%20OF%20PRO
PERTY%20ACT.pdf
http://www.ebc-india.com/lawyer/articles/2003v4a3.htm

ACTIONABLE CLAIN :MEANING AND ITS TRANSFER Page 21