Transfer of property avinash

Transfer Of Property Act, 1882
Actionable Claim
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INDORE INSTITUTE OF LAW
(Affiliated to D.A.V.V. & Bar Council of India)
B.A.LL.B. (HONS)
Project on
(Subject)_______________________________
Topic: 01_______________________________
Submitted to:
Asst. Prof._____________________________
Submitted by:
Name ____________________Signature______
Year _____ Semester ______
Date-:___/___/____

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ACKNOLEDGEMENT
A research work of such great scope and precision could never have been possible without great co-
operationfromall sides.Contributionsof variouspeople have resultedinthiseffort.Firstly, I would like
to thank God for the knowledge he has bestowed upon us.
I would also like to take this opportunity to thank Asst. Prof.______________________________
withoutwhose valuable supportandguidance, this project would have been impossible. Also, I would
like toextendsincere gratitude tomyparents,whoguided me ateverypointduring the research of this
project. I would also like to thank the library staff for having put up with my persistent queries and
havinghelped me outwiththe voluminous materialsneededforthiswork. Iwouldalso like to thank my
seniors for having guided me and culminate this acknowledgement by thanking my friends for having
kept the flame of competition burning, which spurred me on through these days.
Andfinally myparents,whohave beenasupportto usthroughout mylife andhave helped me,guided
me to performmybestin all interestsof ourlife, mygrandparentswhohave alwaysinculcatedthe best
of theirqualitiesin me.
Avinash Rai
VIIth Semester

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CERTIFICATE
THIS IS TO CERTIFY THAT SHIVAM SRIVASTAVA
HAS SUCESSFULLY COMPLETED THE PROJECT
WORK TITLED
“Actionable Claim”
IN PARTIAL FULFILLMENT OF REQUIREMENTS
FOR THE KNOWLEDGE OF
______________________PRESCRIBED BY INDORE
INSTITUTE OF LAW.
THIS PROJECT IS THE RECORD OF AUTHENTIC
WORK CARRIED OUT DURING THE ACADEMIC
YEAR 2016-2017
Teacher's signature....................
DATE....................

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DECLARATION
I , Avinash Rai student of B.A.LLB.(H) 7TH
sem studying
at INDORE INSTITUTE OF LAW declare that the
project work entitled “ was carried by me on my own
research .”
This project was undertaken as a part of academic
curriculum according to the university rules and
regulations and it has no commercial interest and motive,
it is my original work. It is not submitted to any other
organization for any other purpose.

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Contents
ABSTRACT......................................................................................................................................8
OBJECTIVE OF RESEARCH ............................................................................................................9
RESEARCH METHODOLOGY.........................................................................................................9
INTRODUCTION TO ACTIONABLE CLAIM.................................................................................10
ACTIONABLE CLAIM...................................................................................................................10
CONDITIONS OF ACTIONABLE CLAIM.......................................................................................12
Types of Debts.................................................................................................................................12
In what context are terms Pledge, Hypothecation and Mortgage Used:...............................................14
Pledge, Hypothecation and Mortgage Under Indian Law.....................................................................15
Difference BetweenPledge, Hypothecation and Mortgage at a Glance................................................16
Transfer of Actionable Claim ............................................................................................................17
DEFINITION OF ACTIONABLE CLAIM:.......................................................................................18
DEFINITION OF GOODS:...............................................................................................................18
JUDICIAL PRONOUNCEMENTS...................................................................................................22
CONCLUSION................................................................................................................................24

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ABSTRACT
Actionable Claim is a complicated area of law that requires a researcher to master not only a
large volume of complex legislation, but because of its ‘accessory-law’ nature also requires good
knowledge of many other areas of law (both statutes and common law). This assignment
provides an overview to actionable claim research in the Indian context. It begins by introducing
the actionable claim in Part 1 before moving on to discuss how to find the law and material with
legally enforceable consequences in Part 2. The assignment, in part 3, discusses whether
actionable claim can be considered as goods? Part 4 discussed whether sales tax can be levied on
actionable claim?

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OBJECTIVE OF RESEARCH
1. Whether actionable claim can be considered as goods?
2. Whether sales tax can be levied on actionable claim?
3. What is significance of actionable claim and what are the legal attributes thereof insofar
as the law in India is concerned?
RESEARCH METHODOLOGY
“DESCRIPTIVE” Method of Research” has been relied upon for conducting the research given
the availability of resources and time. The researcher has relied mainly upon secondary sources,
including books available in Library, Databases, Journals, Articles and case laws.

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INTRODUCTION TOACTIONABLE CLAIM
The term actionable claim is that every kind of claim in a movable property which would be
enforced through the courts. But such a wide meaning created confusion.
For example, under this meaning all debts whether secured or unsecured were actionable claims
whereas a debt secured by mortgage of immovable property is, strictly speaking, an ‘interest in
land’.
Similarly, under this meaning any claim of money whether the amount was fixed amount or
uncertain, was an actionable claim. Because of such confusions there used to be conflicting
decisions and the law was neither clear nor uniform.
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 whether such debt or beneficial interest be
existent, accruing or conditional or contingent.
ACTIONABLE CLAIM
As Per Section 3 of the Transfer of Property Act, 1882
Actionable Claim1 is a claim to any debt, other than a debt secured by mortgage of immovable
courts recognize2 as affording grounds of relief whether such debt or beneficial interest be
existent, accruing or conditional or contingent”.
“A person is said to have notice”3 of a fact when he actually knows that fact, or when, but for
willful abstention from an enquiry or search which he ought to have made, or gross negligence,
he would have known it.
Explanation I: Where any transaction relating to immovable property is required by law to be
and has been effected by a registered instrument, any person acquiring such property or any part
of, or share or interest in, such property shall be deemed to have notice of such instrument as
from the date of registration or, where the property is not all situated in one sub-district, or where
the registered instrument has been registered under sub-section (2) of section 30 of the Indian
Registration Act, 1908 (16 of 1908), from the earliest date on which any memorandum of such
registered instrument has been filed by any Sub-Registrar within whose sub-district any part of
1 http://www.lawzonline.com/legalencyclopedia/a/Actionable-Claim.html
2 Subharao’s G.C.V. “Transfer of Propert Act” 15th Edition 2006.
3 http://dolr.nic.in/Acts & Rules %5C Transfer of Property Act (1882).htm

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the property which is being acquired, or of the property wherein a share or interest is being
acquired, is situated:
PROVIDED that-
(1) The instrument has been registered and its registration completed in the manner prescribed by
the Indian Registration Act, 1908 (16 of 1908), and the rules made there under,
(2) The instrument of memorandum has been duly entered or filed, as the case may be, in books
kept under section 51 of that Act, and
(3) The particulars regarding the transaction to which the instrument relates have been correctly
entered in the indexes kept under section 554 of that Act.
Explanation II: Any person acquiring any immovable property or any share or interest in any
such property shall be deemed to have notice of the title, if any, of any person who is for the time
being in actual possession thereof.
Explanation III: A person shall be deemed to have had notice of any fact if his agent acquires
notice thereof whilst acting on his behalf in the course of business to which that fact is material:
PROVIDED that, if the agent fraudulently conceals the fact, the principal shall not be charged
with notice thereof as against any person who was a party to or otherwise cognizant of the fraud.
Actionable claim means a claim to any debt other than a debt secured under a mortgage or
hypothecation or pledge on any immovable or moveable property5 , possession of which is given
to person or institution which gave the loan.
An Actionable Claim is a plain unsecured debt which can be claimed by a person against another
person and which can be enforced in civil courts according to law. Right to benefit of a contract
falls within the definition of Actionable Claim. An Actionable Claim is transferable and
inheritable and it is deemed to be a property in the hands of the person who has the claim.
Actionable claim,6 a claim to a debt, whether existent, accruing, contingent or conditional (the
latter two types being future debt), are capable of being transferred in present. It is recommended
that this position be clarified by virtue of an amendment to the Transfer of Property Act.
Simply stated7 , an actionable claim means a claim to any unsecured debt or a claim to any
beneficial interest in movable property, not in the possession of the claimant. The debt or
beneficial interest may exist, accruing, conditional or contingent.
4 Section 55 Rights and Liabilities of Buyer and Seller of “Transfer of Property Act”
5 http://www.hindu.com/pp/2006/05/20/stories/2006052001250300.htm viewed on
6 http://www.rbi.org.in/scripts/PublicationReportDetails.aspx?UrlPage=&ID=166
7 http://www.xomba.com/gift_and_actionable_claim.

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For example, A borrows Rs. 5000/- from B at 12% per annum interest on 1st April, 2006 and
promises to pay back the amount with interest on 1st July, 2006. Till 1st July, 2006, the debt is
an accruing debt and is an actionable claim. It may be noted that a person can have a actionable
claim, even without consideration. Further such person’s claim will not be affected by claim of a
subsequent transferee with consideration.
CONDITIONS OFACTIONABLE CLAIM
Two conditions of actionable claim is that—
1. Unsecured Money Debt: A debt is an obligation8 to pay a liquidated or definite sum of
money. Such debt may me: (1) existent, (2) conditional, (3) contingent. If it is now due
and owing it is existent. If it is a present debt but payable in the future it is accruing. A
debt which will be due only if a condition be fulfilled or if a certain specified thing
happens is a conditional debt9 . Contingent debts are debt which are payable on a certain
contingency, e.g., an amount due under a policy of insurance.
Types ofDebts
Existent Debt: Where a debt or sum of money10 has already become due and is payable
(enforceable) at present, the debt is existent. For example, claim of arrears of maintenance
allowance or the claim of arrears of salary is existent debt because a definition sum of money has
already become due in the past and now it is payable.
Accruing debt: Where a debt or sum of money is at present due but it is payable not now but on a
future date, the debt is accruing. Accruing debt is due at present but becomes payable only on a
future date. For example if A promises to pay Rs. 100 to B as maintance allowance on fifth of
every month, the claim for salary to fall due in the next month is an accruing debt and such an
actionable claim
Conditional or Contingent debt: Where the claim for a sum of money exists but the payment
depends upon the fulfillment of any condition, the debt is condition. If A promises to give Rs.
1000 to B provided he marries within one year, than B’s claim for Rs. 1000 is conditional
because it is subject to a condition to be fulfilled by him in future.
Similarly, where the claim of money is subject to some uncertain future event which may or may
not happen, the claim is contingent, For example, Where A promises to give Rs. 1000 to B
provided B’s first child is a son, the claim of B for Rs. 1000 is contingent claim (debt).
8 Sukla S. N., “The Transfer of Property Act”, 26th Edition 2007
9 Sukla S. N., “The Transfer of Property Act”, 26th Edition 2007
10 Sinha R. K., “The Transfer of Property Act”, 9th Edition 2006.

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Debts secured11 by a mortgage of immovable property or by a pledge of movable property are
excluded from the definition of actionable claim. Actionable claim therefore under the section
means a claim to unsecured debt. A claim for damages, i.e. for an unascertained sum of money
or a claim for mesne profits does not come within the definition of actionable claim.
Illustrations
(1) A owes Rs. 1000 to B. B’s claim is an actionable claim.
(2) A borrows Rs. 1000 from B and mortgages his house to him. The mortgage debt is not
actionable claim.
(3) A contracted to buy goods from B. On the due date, a fails to take delivery and B sells the
goods in the open market at a loss Rs. 10000. B has a right to claim the damages from A but this
claim is not an actionable claim.
2. Claim to Beneficial Interest not in Possession of the Claimant
Right of a person to take the possession of a movable property from the possession of the
another, is the actionable claim of that person provided claimant has beneficial interest(i.e. right
of possession) in that property. Following condition are necessary for an actionable claim:
(a) The claim is in some movable property.
(b) The movable property is in possession of another person.
(c) The beneficial inters or the right of the possession of the claimant is recognized by the court
A person can claim possession of a movable property of which he has right to possess but it is
not in his possession. If a property is already in his actual or constructive possession there is no
question of claiming its possession, Therefore, if a movable property is proved to be in actual or
constructive possession of the claimant, there is no actionable claim. Moreover, the claimant
must also have right of possession i. e. the law recognizes that he has beneficial interest in that
movable property. If he has no legal right of possession, the claim is not actionable claim.
Beneficial interest of movable property: A claim12 to any beneficial interest in movable property,
not in possession of the claimant, is included in the present definition. Thus, a right to claim the
benefit of a contract for the purchase of goods is a beneficial interest in movable property.
Illustration
1. A agrees to sell to B bales of cotton deliverable on a future day. B has a beneficial interest in
the goods and it is an actionable claim.

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2. A has sold fifty bags of wheat to B. The bags of wheat are in the godown of A. B’s right to
take possession of the bags of wheat from the godown of A is his (B’s) Actionable claim.
3. A has fifty bags of wheat in his godown. A has not sold these bags to B or the contract of sale
is not valid. B has not beneficial interest in those bags of wheat. Claim of B, if made by him, is
not his actionable claim.
In what context are terms Pledge,Hypothecationand Mortgage Used:
These terms are used for creating a charge on the assets which is given by the borrower to the
lender as a security for any loan. Thus, one of these terms will be normally used whenever an
individual or a business firm avails any loan and the bank keeps some assets as a security, so that
it will be able to sell the same in case that individual or the firm defaults in repayments.
MEANING
Pledge, Hypothecation, and Mortgage
1) Pledge is used when the lender (pledgee) takes actual possession of assets (i.e. certificate,
goods). Such securities or goods are movable securities. In this case the pledgee retains
the possession of the goods until the pledger (i.e. borrower) repays the entire debt
amount. In case there is default by the borrower, the pledgee has a right to sell the goods
in his possession and adjust its proceeds towards the amount due (i.e. principal and the
interest amount). Some examples examples of pledge are Gold /Jewellery Loans,
Advance against goods,/stock, Advances against National Saving Certificates etc.
2) Hypothecation is used for creating charge against the security of movable assets, but
here the possession of the security remains with the borrower itself. Thus, in case of
default by the borrower, the lender (i.e. to whom the goods / security has been
hypothecated) will have to first take possession of the security and then sell the same.
The best example of this type of arrangement are Car Loans. In this case Car / Vehicle
remains with the borrower but the same is hypothecated to the bank / financer. In case
the borrower, defaults, banks take possession of the vehicle after giving notice and then
sell the same and credit the proceeds to the loan account. Other examples of these
hypothecation are loans against stock and debtors. [Sometimes, borrowers cheat the
banker by partly selling goods hypothecated to bank and not keeping the desired amount
of stock of goods. In such cases, if bank feels that borrower is trying to cheat, then it can
convert hypothecation to pledge i.e. it takes over possession of the goods and keeps the
same under lock and key of the bank]
3) Mortgage : is used for creating charge against immovable property which includes land,
buildings or anything that is attached to the earth or permanently fastened to anything
attached to the earth (However, it does not include growing crops or grass as they can be

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easily detached from the earth). The best example when mortage is created is when
someone takes a Housing Loan / Home Loan. In this case house is mortgaged in favour
of the bank / financer but remains in possession of the borrower, which he uses for
himself or even may give on rent.
Pledge, Hypothecation and Mortgage Under Indian Law
Pledge : Section 172 of the Indian Contract Act defines pledge as "The bailment of goods as a
security for the payment of a debt or performance of a promise" The bailor in this case is called
a Pawnor and the bailee is called Pawnee
To create a valid pledge in the eyes of Law, the three important points needs to be noted :
(a) Delivery of Possession : As in bailment, in pledge too delivery of possession is required. For
exmaple, in Revenue Authority vs Sundarsanam Pictures, AIR 1968, it was held NOT to be
pledge because the film producer borrowed a sum of money from a financier and agreed to
deliver the final prints of the film when ready. Thus, there was no delivery of the goods at the
time of agreement;
(b) Delivery is in return of a loan or promise to perform something. Therefore, if your friend
gives you his Motor-cycle to go to college, it is not pledge but can be called simple bailment;
(c) It should be in pursuance of a contract : The delivery must be done under a contract (oral or
written). However, it is not necessary that delivery and loan take place at the same time.
Delivery can be made even after the loan is received.
Hypothecation: was not defined under Indian Law for long time and was used more on the
basis of practice. However, now under the Secruitisation and Reconstruction of Financial
Assets and Enforcement of Security Interest Act, hypothecation is defined as "a charge in or
upon any movable property, existing or future, created by a borrower in favour of a secured
creditor without delivery of possession of the movable property to such creditor, as a security for
financial assistance, and includes floating charge and crystallization into fixed charge on
movable property".
Mortgage : is defined in Section 58 of the "Transfer of Property Act 1882". It is the transfer of
an interest in specific immovable property for the purpose of securing payment of money
advanced by way of loan.

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DifferenceBetween Pledge, Hypothecation and Mortgage at a Glance
Pledge Hypothecation Mortgage
Type of
Security
Movable Movable Immovable
Possession of
the security
Remains with
lender (pledgee)
Remains with
Borrower
Usually
Remains
with
Borrower
Examples of
Loan where
used
Gold Loan,
Advance against
NSCs, Adv against
goods (also given
under
hypothecation)
Car / Vehilcle
Loans, Adv
against stock and
debtors
Housing
Loans

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Transfer of Actionable Claim
Beneficial interest in movable property is intangible movable property. Therefore, actionable
claim is regarded as property. Some instance of actionable claim:
(1) The right to claim benefit of the contract for the purchase of goods13 .
(2) A claim to money under an insurance policy14 .
(3) A share in partnership.15
(4) A claim for arrears of rent16 .
(5) A claim for return of earnest money17 .
(6) Right to get back the purchase-money when the sale is set aside.18
(7) Muslim women claim for her unpaid dower.19
(8) Right to get the proceeds of a business.20
Instances of claims which are not actionable claim:
(1) A debt is an actionable claim, but a debt which has passed into a decree is not an actionable
claim.21
(2) The right to recover damages for breach of contract.22
(3) A claim to mesne profits.23
(4) A copyright.24
(5) Where a decree provides for a future decree, this future decree is also not actionable claim.25
13 Zaffar Mehar Ali v. Budge-Budge Jute Mills, (1907), 34, Cal. 289.
14 Varjivan Das v. Magan Lal, A. I. R., (1937), Bom. 382
15 Bharat Prasad v. Pras Sibgh Jute Mills, (1907), 34, Cal. 289.
16 Daya Debi v. Chapla Debi, A.I.R. (1960), Cal. 378.
17 Lalchand v. Hussainio, (1927), 97, I.C. 257.
18 Chinnappareddi v. Venkataramanappa, A.I.R. (1942), Mad. 209
19 Amir Hasan Khan v. Muhammad Nazir Hussain,A.I.R. (1932), All. 345.
20 Alkash Ali v. Nath Bank, A.I.R. (1951), Assam56
21 Gvindarajulu v. Ranga Rao, A.I.R. (1921), Mad. 113.
22 Moti Lal v. Radhey Lal, (1933), ALL, 642.
23 Jai Narayan v. Kishun Dutta, A.I.R. (1924), Pat. 551.
24 Savitri Devi v. Dwarka Prasad, (1939), A.L.J. 71
25 Jugalkishor Saraf v. Raw Collon Co. Ltd. A.I.R. (1955), S.C. 376.

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DEFINITION OF ACTIONABLE CLAIM:
Section 3 of Transfer of Property 1882 defines “Actionable claim”. As per Mulla’s T.P. Act an
actionable claim is a claim to any unsecured debt. Such a debt should be other than a debt
secured by mortgage of immovable property or by hypothecation or pledge of movable property
(because these are not transfers of claim but of the property itself) or a claim to any beneficial
interest in movable property not in the possession, either actual or constructive, of the claimant.
The claim should be such as Civil Court would recognise as affording grounds for relief, whether
such debt or beneficial interest be existent, accruing, conditional or contingent; Such transfer of
an actionable claim shall be effected only by execution of an instrument is writing by the
assignor to the assignee. [Section 130 of Transfer of Property 1882].
DEFINITION OF GOODS:
 Definition of goods under Sale of Goods Act 1930 - “Goods” means every kind of
movable property other than actionable claims and money; and includes stock and shares,
growing crops, grass, and things attached to or forming part of the land which are agreed
to be severed before sale or under the contract of sale. [section 2(7)].
 Definition of goods under Central Sales Tax Act 1956- “Goods” includes all materials,
articles, commodities and all other kinds of movable property, but does not include
newspapers, actionable claims, stocks, shares and securities. [section 2 (d)]
ISSUE I & II: DETERMINATION WHETHER ACTIONABLE CLAIM OR GOODS WITH
THE HELP OF RELEVANT CASE LAWS
 H. Anraj v. State of Tamil Nadu (1986) 1 SCC 414
Issue: Whether sales tax can be levied by a State Legislature on the sale of the Lottery Tickets in
the concerned State?
The Supreme Court held that the lottery tickets, to the extent they comprise an
entitlement to participate in a draw, are "goods" as they constitute a dealer's (in lottery
tickets) stock in trade which is capable of being bought and sold in the market (and that
there is a transfer of property in goods in every sale of the same). Lottery tickets are
goods and not actionable claims. Both were held to be beneficial interests in moveable
property, the former in present, and the latter in future, depending on the contingency.
 Vikas Sales Corporation v Commissioner of Commercial Taxes AIR 1996 SC 2082
Issue: Whether transfer of import license (REP) by the holder to another person constitute sales
of goods?

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S.C examined if it does, it is eligible to sales tax, otherwise not. The features of REP licence
include an innate value and freely transferable. These features make it a marketable commodity.
Thus it held that it was a highly attractive and sought after instrument/means for importing
goods. Infact, those licenses were being traded freely in the market and for that reason alone
those were goods. Also, when they have a value of their own unrelated to the goods which can be
imported there under, it is idle to contend that they are in the nature of actionable claims.
 Sunrise Associates vs. Govt. of NCT of Delhi & Ors 2006 (5) SCC 603
Issue: Whether decision in Anraj case that lottery tickets are goods for purposes of levying sales
tax was correct?
S.C. held that the lottery ticket has no value in itself as it is mere piece of paper. Its value lies in
fact that it represents chance or right to conditional benefit of winning prize of greater value than
consideration paid for transfer of that chance. It is nothing more than token or evidence of this
right. Three ingredients in the sale of lottery tickets, namely, (i) prize; (ii) chance; and (iii)
consideration. So, when one purchases a lottery ticket, he purchases for a prize, which is by
chance and the consideration is the price of the ticket. The distinction drawn in H. Anraj case
between the chance to win and the right to participate in the draw was held to be unwarranted
and specious. Even if taken as a separate right, it would still be considered to be an actionable
claim. A Constitutional Bench of the S.C. overturned the decision in the H Anraj case, holding
that the sale of lottery tickets is, at best, an actionable claim.
 Yasha Overseas v. Commissioner of Sales Tax (2008)
Issue: Whether the decision in Vikas case can be said to be impliedly overruled by the
Constitution Bench decision in Sunrise? If no, whether Vikas case is still a good law and apply to
cases of DEPB?
S.C. held that It was indeed true that the Constitution Bench in Sunrise Associates’ case (supra)
did not approve the decision in Vikas Sales Corpn.’s case (supra) insofar as it gave their free
transferability as an additional reason to hold that REP licences were not actionable claims but
‘goods’ properly so called. But there this question did not come for reference and hence no
decision was given on this issue. Decision in Vikas sales still holds good and is applicable to
DEPB as well.
 State of Kerala and Ors. v. Mini Shamsudin and Ors. (2009)
Issue: Whether decision in Sunrise case is correct?
H.C. upheld the decision of Sunrise case. It held that actionable claims are `goods' and movable
property but not for the purpose of the Sales Tax Acts. Consequently, an actionable claim is

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movable property and ‘goods’ in the wider sense of the term but a sale of an actionable claim
would not be subject to the sales tax law.
What is significance of actionable claim and what are the legal attributes thereof insofar as
the law in India is concerned?
As the expression "Actionable Claim" itself denotes, it is a claim on which action lies for certain
reliefs in the law courts. It excludes, the claims which have been already adjudicated or decreed
so that no further action can be based thereon and also the claims, through actionable are secured
by mortgage or pledge or hypothecation. This exclusion is reflected in the definition of
"Actionable Claim" contained in Section3 of Transfer of Property Act.

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JUDICIALPRONOUNCEMENTS
Sadasook Ramprotap v Hoare Miller & Corporation26 in this case contains a very special
scheme which has some of the features of both the English common law, and of equity. Thus, in
equity, debts were assignable, and also contingents interest and future property when the
assignable was for valuable consideration.
Chowne v Bayliss Corporation Bank27 in the case the procedure adopted for reducing them into
possession. Legal chose, in action were those enforceable by action at law, such as promissory
notes, bills of exchange or policies of insurance. Re Bainbridge, Ex parte Fletcher28 in this case
editable closes in action, sometime called chose in equity, were enforced by action in equity, e.g.
a beneficial interest in a partnership.
Hammond v Stewar29 in this case remedy of the assignee was imperfect at law, he had to sue in
the name of the assignor on giving him and indemnity against costs. In equity he could sue in his
own name, but there had to be consideration for the assignment, and the assignee could not sue
the debtor in equity, but had to sue in law in the name of the assignor, unless the assignor had
refused to allow the assignee to sue in his name.
Loknarayan Sethia v state Bank of jaipur30 in this case the Supreme Court was called upon to
decide whether an irrevocable power of attorney in favor of a creditor to execute a decree on
behalf of the debtor - decree-holder constituted an equitable assignment. The court held that it
did, as it was an engagement to pay out of a specific fund, viz the decrial amount.
Bharat Nidhi Ltd v Takhatma31 in this case held that an irrevocable power of attorney
authorizing the creditor-Bank to receive moneys due or that may become due to the borrows,
coupled with a bill endorsed in favor of the bank for collection, constitution an equitable
assignment.
Anraj vs Government of Tamil Nadu32 was overruled prospectively with effect from the date of
the judgment (see ‘A draw without a chance to win is meaningless,’ in Business Line, May 6). A
three-judge Bench had agreed with the decision in the Anraj case, when deciding the Vikas Sales
Corpn case. There, it was held that REP licenses/Exim scrips are not actionable claims and,
therefore, sale of such licence/scrip was not liable to sales tax. The Constitution Bench has now
overruled the Anraj case and held that a sale of a lottery ticket amounts to the transfer of an
actionable claim.
26 1923, (27), Cal WN, 733
27 1862, (31), Beav, 351
28 1878, (8), Ch D 218.
29 1838, (9), Sim 327, p. 332.
30 1969, (1), SCR 122
31 1969, (1), SCR 595.
32 1986, (61), STC, 165 SC.

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The court, however, clarified that the order of reference in Sunrise vs NCT, Delhi was limited to
the question whether lottery tickets are ‘goods’ and that the court had not been called upon to
answer the question whether REP licenses (or the DEPB which has replaced the REP licenses)
are ‘goods’ and having regard to the limited nature of the reference, the court did not decide the
issue. Even while clarifying as above, the Bench held that the assumption in the Vikas Sales case
that actionable claims are not transferable for value and that that was the difference between
‘actionable claims’ and those other goods which are covered by the definition of ‘goods’ in the
Sale of Goods Act, 1930 and the sales tax law was fallacious and the conclusion insofar as it was
based on this erroneous perception was held equally wrong. The apex court has, however,
clarified in its judgment that the Anraj case is overruled only prospectively with effect from
April 28, 2006. However, nothing has been specifically mentioned about the pending cases,
levies already made but not collected.

Actionable Claim
24
CONCLUSION
Actionable claim is a claim to any debt, other than a debt secured by mortgage of immovable
courts recognize as affording grounds of relief whether such debt or beneficial interest be
existent, accruing or conditional or contingent. Actionable claim is a claim to any debt, other han
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
whether such debt or beneficial interest be existent, accruing or conditional or contingent. So the
actionable claim is a very important for the transfer of property act. Debts secured by mortgage
etc. are excluded from the definition of “Actionable Claim” because such debts are not the
claims to property but the property itself.

Actionable Claim
25
BIBLIOGRAPHY AND WEBLIOGRAPHY
1) Sinha R. K., “The Transfer of Property Act”, 9th Edition 2006.
2) Sukla S. N., “The Transfer of Property Act”, 26th Edition 2007
3) Subharao’s G.C.V. “Transfer of Propert Act” 15th Edition 2006.
4) http://www.lawzonline.com/legalencyclopedia/a/Actionable-Claim.html
5) http://www.hindu.com/pp/2006/05/20/stories/2006052001250300.htm
6) http://www.rbi.org.in/scripts/PublicationReportDetails.aspx
7) P.N. MISRA 9TH EDITION Rights and Liabilities of Buyer and Seller of “Transfer of Property
Act”

Transfer of property avinash

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