January 18, 2024

In order to codify the laws pertaining to property transfers, the Transfer of Property Act was passed in 1882. Since it does not encompass every sort of property or every manner of transfer, this Act is not all-inclusive. Not all rules pertaining to the various transfer modes or the transfer of all properties are covered by the Transfer of Property Act, of 1882.

Only inter vivos transfers, transfers between live parties made by act of parties through express or implied contracts, are covered by this Act. Additionally, while the Act primarily addresses the transfer of immovable property, several of its rules also apply to movable property.

actionable claim section

  • Under Section 3 of the Transfer of Property Act of 1882, an actionable claim is defined.
  • As per actionable claim meaning, it is a claim to any debt, other than a debt secured by a mortgage of real estate, hypothecation or pledge of real estate, or a beneficial interest in real estate not in the claimant’s actual or constructive possession, that the civil courts recognize as providing grounds for relief, whether or not such debt or beneficial interest be present, accruing confidential or contingent, is defined as an actionable claim in transfer of property act.

actionable claim example

Actionable claim examples include the following:

  • Make a rent arrears claim.
  • A claim made in accordance with an insurance policy.
  • Request a refund of the earnest money.
  • The right to receive the purchase price back after setting aside a sale.
  • A partner’s right to file a lawsuit to obtain the disbanded partnership firm’s account.
  • The ability to assert a benefit under a contract for the acquisition of products.
  • The entitlement to a company’s profits.
  • The sums for which the lawsuits are brought are fixed and precise

Transfer Modes for Actionable Claims

The different modes of transfer for actionable claims are as follows:

  • The Mode of Assignment: Section 130 of the Transfer of Property Act discusses and outlines the process for assigning actionable claims.
  • The Mode of Negotiation: Negotiation is an additional transfer mode that may be applied to various actionable claim types. This is particularly true for claims involving negotiable instruments such as bills of exchange and promissory notes.
  • The Mode of Endorsement: Endorsement is closely associated with negotiation and is often used in relation to negotiable documents.
  • The Transfer Modes in Particular Situations: Observing these clauses supports the orderly conduct of real estate transactions and the transfer of rights and responsibilities between parties by ensuring the validity and enforceability of actionable claims.

What are not Actionable Claims?

Certain kinds of claims and rights are not transferable since they are not deemed actionable claims. Here are a few instances that are not actionable claims:

  • The right to get compensation for contract violations or damages under tort law cannot be transferred since the amounts are ambiguous.

In the Moti Lal v Radhey Law case, the Apex Court held that a right to damages cannot be considered an actionable claim, regardless of whether the damages are unliquidated or result from tortuous culpability. While there is definitely a duty here, it is not an unsecured debt. It can be attributed to the unknown amount of money at stake.

  • Mesne profits claim cannot be transferred because it is likewise ambiguous.

In the Jai Narayan v Kishun Dutta case, it was decided that a claim for mesne profits is not actionable since it does not represent a claim to any beneficial interest in moveable property that is in the claimant’s actual or constructive possession. Mesne profits are unliquidated damages. As such, it was not an actionable claim, but rather a “mere right to sue.”

  • Copyright, patents, and trademarks are examples of rights that are not actionable claims as their owner already has them. Since they are the claimant’s intellectual property and cannot be claimed by anyone else, they are governed by separate Acts and are not transferable.
  • Debt decree or judgment cannot be transferred under an actionable claim since, once the judgment is rendered, there is no longer any action that may be transferred.

In the Jugal Kishore Saraf v Raw Cotton Ltd. case, the Apex Court determined that the action could not be considered an actionable claim in cases of decrees or judgment debts.

An actionable claim is a transferable, intangible piece of property. It mostly relates to the kinds of claims that can be obtained through legal actions.

“Actionable Claim” refers to any kind of debt involving movable property that the court could execute. This means that a claim for any form of money, regardless of whether its value was set or indeterminate, is actionable. There were occasionally misunderstandings and conflicting rulings, and the legislation was either unclear or inconsistent. The law should be changed to include the rights and obligations of both parties in transactions in the Transfer of Property Act.

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