Actionable claim means a debt or a claim on which action can be started in a Court of law for comfort or relief. The civil Courts recognized as giving the grounds for relief whether such claims are conditional, accruing and other. The actionable claim is defined under section 3 of the Transfer of Property Act, of 1882.



(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 and 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 another actionable claim by the debtor or other person from or against whom the transferor would, but for a such instrument of transfer as aforesaid, have been entitled to recover or enforce such debt or other actionable claims, 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 the 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.

Exception: Nothing in this section applies to the transfer of a marine or fire policy of insurance or affects the provisions of section 38 of the Insurance Act, 1938 (4 of 1938).


(i) A owes money to B, who transfers the debt to C. B then demands the debt from A, who, not having received notice of the transfer, as prescribed in section 131, pays B. The payment is valid, and C cannot sue A for the debt.

(ii) A effects a policy on his own life with an insurance company and assigns it to a bank for securing the payment of an existing or future debt. If A dies, the bank is entitled to receive the amount of the policy and to sue on it without the concurrence of A’s executor, subject to the proviso in sub-section (1) of section 130 and to provisions of section 132.

SECTION – 131 Notice to be in writing, signed

Every notice of transfer of an actionable claim shall be in writing, signed by the transferor or his agent duly authorized in this behalf, or, in case the transferor refuses to sign, by the transferee or his agent, and shall state the name and address of the transferee.

SECTION – 132 Liability of transferee of actionable claim

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.



Year and ChapterSubjectExtent of repeal
27 Hen. VIII,c.10UsesThe whole
13 Eliz., c.5Fraudulent conveyancesThe whole
27 Eliz.,c.4Fraudulent conveyancesThe whole
4 Wm. and Mary, c.16Clandestine mortgagesThe whole


Number and YearSubjectExtent of repeal
IX of 1842Lease and re-leaseThe whole
XXXI of 1854Modes of conveying landSection 17
XI of 1855Mesne profits and improvementsSection 1; in the title, the words “to mesne profits and “, and in the preamble ” to limit the liability for mesne profits and”
XXVII of 1866Indian Trustee ActSection 31
IV of 1872Punjab Laws ActSo far as it relates to Bengal Regulations I of 1798 and XVII of 1806
XX of 1875Central Provinces Laws ActSo far as it relates to Bengal Regulations I of 1798 and XVII of 1806
XVII of 1876Oudh Laws ActSo far as it relates to Bengal Regulations XVII of 1806
1 of 1877Specific ReliefIn ss. 35 and 36, the words “in writing”


Number and YearSubjectExtent of repeal
Bengal Regulation I of 1798Conditional SalesThe whole Regulation
Bengal Regulation XVII of 1806RedemptionThe whole Regulation
Bombay Regulation V of 1827Acknowledgment of debts; interest; mortgages in possessionSection 15


(i) A transfers to C a debt due to him by B, A being then indebted to B. C sues B for the debt due by B to A. In such suit B is entitled to set off the debt due by A to him; although C was unaware of it at the date of such transfer.

(ii) A executed a bond in favor of B under circumstances entitling the former to have it delivered up and canceled. B assigns the bond to C for value and without notice of such circumstances. C cannot enforce the bond against A.

SECTION – 133 Warranty of solvency of debtor

Where the transferor of debt warrants the solvency of the debtor, the warranty, in the absence of a contract to the contrary, applies only to his solvency at the time of the transfer and is limited, where the transfer is made for consideration, to the amount or value of such consideration.

SECTION – 134 Mortgaged debt

Where a debt is transferred for the purpose of securing an existing or future debt, the debt so transferred, if received by the transferor or recovered by the transferee, is applicable, first, in payment of the costs of such recovery; secondly, in or towards satisfaction of the amount for the time being secured by the transfer, and the residue, if any, belongs to the transferor or other person entitled to receive the same.

SECTION – 135 Assignment of rights under policy of insurance against fire

Every assignee by endorsement or other writing, of a policy of insurance against fire, in whom the property in the subject insured shall be absolutely vested at the date of assignment, shall have transferred and vested in him all rights of suit as if the contract contained in the policy has been made with himself.

SECTION – 136 Incapacity of officers connected with courts of justice

No judge, legal practitioner or officer connected with any court of justice shall buy or traffic in, stipulate for, or agree to receive any share of, or interest in, any actionable claim, and no court of justice shall enforce, at his instance, or at the instance of any person claiming by or through him, any actionable claim so dealt with by him as aforesaid.

SECTION – 137 Saving of negotiable instruments, etc.

Nothing in the foregoing sections of this Chapter applies to stocks, shares, or debentures, or to instruments that are for the time being, by law or custom, negotiable, or to any mercantile document of title to goods.

Explanation: The expression “mercantile document of title to goods” includes a bill of lading, dock warrant, warehouse keepers certificate, railway receipt, warrant or order for the delivery of goods, and any other document used in the ordinary course of business as proof of the possession or control of goods, or authorizing or purporting to authorize, either by endorsement or by delivery, the possessor of the document to transfer or receive goods thereby represented.






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