Actionable Claims as per Transfer of Property Act, 1882

An actionable claim is a claim that can be enforced by a court of law. The Transfer of Property Act, 1882 (TPA) defines an actionable claim as a right to sue for a debt, other than a debt secured by mortgage of immovable property or by hypothecation or pledge of moveable property, or to sue for damages or other relief in respect of breach of contract, or for any other injury to person or property.

Essentials of an actionable claim

The following are the essentials of an actionable claim:

  • There must be a right to sue.
  • The right must be enforceable by a court of law.
  • The right must not be a debt secured by mortgage of immovable property or by hypothecation or pledge of moveable property.

Transfer of actionable claims

The TPA allows for the transfer of actionable claims. The transfer of an actionable claim can be made by assignment or by novation.

  • Assignment: An assignment is the transfer of a right from one person to another. The assignment of an actionable claim can be made by a written instrument signed by the assignor.
  • Novation: Novation is the substitution of a new obligation for an old obligation. The novation of an actionable claim can be made by a written instrument signed by the parties to the old obligation and the parties to the new obligation.

MCQs on Actionable Claims

Here are some MCQs on the topic of Actionable Claims as per the TPA:

  1. Which of the following is not an essential for an actionable claim?
    • There must be a right to sue.
    • The right must be enforceable by a court of law.
    • The right must be a debt.
    • The right must not be secured by mortgage of immovable property.
  2. Which of the following is not a valid method of transferring an actionable claim?
    • Assignment
    • Novation
    • Sale
    • Gift
  3. Can a debt secured by mortgage of immovable property be transferred?
    • Yes
    • No
    • Only in certain cases
    • Only in certain states
  4. Can a debt secured by hypothecation or pledge of moveable property be transferred?
    • Yes
    • No
    • Only in certain cases
    • Only in certain states

Answers to the MCQs:

  1. The answer is (c). The right to sue does not have to be a debt.
  2. The answer is (c). An actionable claim cannot be sold or gifted. It can only be assigned or novated.
  3. The answer is (b). A debt secured by mortgage of immovable property cannot be transferred.
  4. The answer is (b). A debt secured by hypothecation or pledge of moveable property cannot be transferred.