What is a 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, though actionable are secured by mortgage or pledge or hypothecation. This exclusion is reflected in the definition of “Actionable Claim” contained in Section 3 of The Transfer of Property Act.
Explain elaborately what the definition of “Actionable Claim” means by giving certain concrete examples in that behalf.
Essentially, an actionable claim is a claim to any debt or to any beneficial interest in movable property. Under the Transfer of Property Act, an actionable Claim excludes the claims to such debts as are secured by mortgage, hypothecation or pledge of immovable or movable and the claims to any beneficial interest in any movable property that is in the actual or constructive possession of the Claimants. Such debt or beneficial interest may be existing, accruing, conditional or contingent and it is a civil court which only can have jurisdiction to grant suitable relief/s in respect thereof. The definition though complex is logical and well reasoned. The significance of “actionable Claim” lies in its assignability.
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. Similarly, all claims under the contract are excluded except claims to the payment of liquidated sums of money or debt or price.
Examples of “Actionable Claims“
- The benefit of a contract giving an option to purchase the land;
- Claim for arrears of rent;
- Claim for rent to fall due in future;
- The benefit of executory contract for the purchase of goods;
- An option to repurchase the properties sold;
- An endorsement on the back of a contract for the purchase of goods by the purchaser that he had sold all his rights and interest in the contract to a person named;
Examples of Claims that are not actionable
- A claim which is decreed;
- The right to sue for accounts and to recover money which might be found due on taking accounts from an agent;
- A claim for main profits;
- Relinquishment of interest of a retiring member of joint Hindu family business in favour of the continuing co-parcener/s;
- A mere right to sue