ACTIONABLE CLAIM 

Transfer of Property Act, 1882

TANMOY MUKHERJEE INSTITUTE OF JURIDICAL SCIENCE

Dr. Tanmoy Mukherjee

Advocate

ACTIONABLE CLAIM [Section 3 of the Transfer of Property Act, 1882]-

Tanmoy Mukherjee

Advocate

Meaning-

 Actionable claim is an act or claim for which an action can be instituted in civil court for realization of the benefit. It means-

(i) Any unsecured debt; or

(ii) Any interest in movable property, not in possession of the claimant.

-An actionable claim is a claim, to take legal action for realization of the benefit. In England, it is called 'chose in action' or 'a thing in action'.

Definition:

The definition of actionable claim was given in the original Act. However, the definition under the original Act was too wide since it covered every act or claim for which an action would lie in the civil court. The Transfer of Property (Amendment) Act, 1930 has narrowed the definition. Section 3 of the T.P. Act, 1882 defines Actionable Claim to be a claim:

(1) To any debt other than a debt secured by mortgage of immovable property or by hypothecation or pledge of movable property; or

(2) To any beneficial interest in movables not in possession actual, or constructive of the claimant;

(3) Which the civil courts recognize as affording grounds for relief whether such debt or beneficial interest be existent accruing, conditional or contingent.

In brief, an actionable claim means-

 (i) Any unsecured debt; or

(ii) Any interest in immovable property, not in possession of the claimant.

The constituents of the above definition may be explained as follows-

1.Unsecured Debt-

The claim under actionable claim may be an unsecured debt (i.e. a debt without security). Debts secured by a mortgage of immovable property or by a pledge of movable property are not actionable claims.

E.g- ‘X’ owes Rs.5, 000/- to 'Y' against a promissory note. 'Y's claim is actionable claim.

2. Beneficial Interest in Movable Property-

 A right to claim benefit in a contract of purchase of goods is a beneficial interest in movable property.

E.g- 'A' agrees to sell 100 bags of wheat to be delivered on a future date. 'B' has a beneficial interest and is an actionable claim.

Instances of Actionable Claims-

 Following are some of the instances of actionable claims- Right to claim benefit under a contract of purchase of goods; Claim under insurance policy, amount standing at the credit of provident fund account; Share in partnership, arrears of rent etc.

Instances of Claims, not actionable-

Share in a company, copyright, mortgage debt, right to recover damages for breach of contract etc.

The provisions relating to mode, effect or assignment of actionable claim and the liability of the assignee are provided in Sections 130 to 132 of the Act.

Assignment of Actionable Claims-

 Sections 130 to 132 of the Act deal with assignment of actionable claims. The expression 'assignment' literally means 'transfer'. According to Section 130 of the T.P.Act, every actionable claim can be transferred by means of a separate instrument in writing duly stamped and signed by the assignor, or his duly authorized agent

-Actionable claim may be assigned by way of sale, mortgage, gift or exchange. Registration is not necessary. It takes effect from the date of assignment.

Notice (Section 131)-

 Notice of assignment should be given to the debtor so as to enable him to pay the creditor after assignment. The assignee in his own interest must give notice to the debtor. Then, the debtor is liable to pay to assignee only. According to Section 131 the notice-

 (1) Must be in writing;

(2) Must contain the name and address of assignee; and

(3) Must be signed by assignor or his authorized agent and on refusal, it must be signed by assignee or his agent.