Transfer Actionable Claims, 1882: Section 3 of the Transfer of Property Act, 1882, which was amended by the Amending Act II of 1990, defines an actionable claim. It is a mobile intangible asset whose transfer is covered in Chapter VIII of the Act.
- What is an Actionable Claim?
- Examples of Actionable Claims
- Exceptions of Actionable Claims
- Unsecured Debt
- Beneficial Interest in Movable Property
- Transfer of Actionable Claims
What is an Actionable Claim?
Actionable claim 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 recognise as affording grounds for relief, whether such debt or beneficial interest be existent, accuring, conditional or contingent.
As a result, a legally actionable claim could be:
- A claim to an unsecured obligation that is not secured by a mortgage, hypothecation, or pledge of immovable property.
- Beneficial ownership of moveable property is referred to as a beneficial interest in movable property.
Because debts secured by the mortgage, pledge, or hypothecation do not manifest as claims to property, but rather as the property itself, they are not included in the definition of “actionable claims.”
Except for demands for payment of a sum of money, debt, or price, all claims under a contract are barred. Similarly, a right to sue based solely on the fact that it is non-transferable is not regarded as an actionable claim.
Examples of Actionable Claims
- Rental arrears
- In a dissolved partnership, the partner’s interest
- Annuities under a waqf deed
- Reimbursement for items sold
- A claim for unpaid dower by a widow of a mohammadam
- A rent claim that will be due in the future
Exceptions of Actionable Claims
- Debts covered by an immovable property mortgage
- Contract damages
- Tort damages
- A claim for mesne profits
- Company ownership
- Copyright protection is a claim made by some people
Unsecured Debt
Debt can be defined as an obligation to pay a liquidated sum of money in a few words.
A monetary commitment that is not secured by a mortgage, pledge, or hypothecation is referred to as an unsecured debt. As a result, for a transaction to be classified as unsecured debt, three conditions must be fulfilled:
- A monetary obligation is a debt that is owed to a third party
- Inadequate security
- Confidence in the amount of money owed
Beneficial Interest in Movable Property
If a person has the right to possess the movable property but does not have constructive or actual possession of it, that person is said to have a beneficial interest in it. As a result, the following are the essential elements:
- The property must be moveable;
- The property is not in the claimant’s possession, and
- The claimant has the legal right to own the property in question.
Transfer of Actionable Claims
Transfer of Actionable Claims Definition: 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:
Except where the debtor or other person is a party to the transferor has received express notice thereof as hereinafter provided) every dealing with 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 another 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)
- Section 130: The transfer of actionable claims, with or without consideration, is effected by written document, according to Section 130 of the Transfer of Property Act. The transferor or his representative must sign the instrument. The transfer of a claim occurs only once the instrument has been signed and executed.
- Section 131: The transferor or his agent must sign every notification of the transferable claim, according to Section 131 of the TP Act.
- Section 132: The act’s section 132 addresses the liability of a transferee of an actionable claim.
- Section 133: The transferee is not obligated to furnish any warranty as to the debtor’s solvency under Section 133.
- Section 134: If a transfer of an actionable claim is made by means of mortgage for the purpose of securing a current or future obligation, Section 134 states that the money should be used first to pay for the cost of such realisation and then to satisfy the amount guaranteed by the transfer.
- Section 135: The transfer of rights under an insurance policy is covered by Section 135 of the law.
- Section 136 & 137: Officers associated with the court of justice are ineligible under Section 136. Saving of negotiable instruments is governed by Section 137.
Negotiable instruments are governed by Negotiable Instrument Act 1881 which, by approval and/or delivery or mere delivery, shall be assigned or transferred to them. A negotiable tool may also be transferable, however, as well as a shareable claim. The assignee shall not acquire more than the customer’s right, title, and interest under the Transfer of Property Act of 1881, but the customer shall in due time have the same rights and advantages as a customer as a holder under the Negotiable Instrument Act of 1881.