W H AT I S A C T I O N A B L E C L A I M ?

Actionable claim is defined in Section 3 of the Transfer of

Property Act, which was included in the Act by the Amending Act
II of 1990. According to Section 3 of the Act, actionable claim
means:

1.Claim to an unsecured debt

2.Beneficial interest in a movable property

➢ These are both claims that are recognized in the Civil Court of
law as affording relief. The term actionable claim only covers
the above mentioned two types of claims.
UNSECURED DEBT
➢ Unsecured debt refers to all monetary obligations of a
certain amount, and that is not covered by any security in
the form of mortgage, pledge or hypothecation.
The three requirements for a transaction to qualify as
unsecured debt are:

1.Monetary obligation
2.No security
3.Certainty of amount of money obligated

➢ For example;
A asked B to lend Rs10000.B gives money to A without any
security
 Actionable claim may be existent, accruing, conditional or
contingent. So, the three types of unsecured debt are:
1.Existent Debt
2.Accruing Debt
3.Conditional or Contingent Debt

Existent Debt
This is the kind of debt that has already become due, and is
payable and enforceable in the present. For instance, if Mr. A
sells a house to Mr. B in present, and the monetary
consideration has to be paid then and there, then the
consideration becomes payable right then, and this is
existent debt.
Accruing Debt
If a monetary obligation is due in present, but becomes
payable on a future date, then that is accruing debt.

For example, if Mr. A is the employee of Mr. B and he

gets his salary on the last day of every month, then his
salary is accruing debt during that month, as it is due
throughout the month, but it becomes payable only on
the last day of the month. So, if Mr. B fails to pay the
salary, then Mr. A can approach the Court to claim it only
after the last date of the month, when it becomes
payable.
Conditional or Contingent Debt
➢ A debt is conditional or contingent if it becomes payable
on the fulfillment of a condition or contingency.
➢ It is called conditional debt when the stipulation is in
control of the parties.

For example, an agreement between A and B that A will pay

Rs. 1000 if B buys C’s house, then this is a conditional debt.
Here, Rs. 1000 becomes payable and B can claim it only after
he fulfills the condition.
 BENEFICIAL INTEREST IN MOVABLE
PROPERTY
If a person has the right to possess a movable property,
then it is said that he has beneficial interest in that
movable property. But if that property is not in his
possession, then he has an actionable claim.

For example A sells his car to B and B has completed his obligation,
that is, B has forwarded the consideration from his side, then B has
the right to possess the car; but if B is unable to acquire
possession, then B can approach the Court to claim this possession.
SOME INSTANCES OF ACTIONABLE CLAIM
i. A claim to money under insurance policy
ii. A Share in partnership
iii.A claim for arrears in rent
iv. A claim for return of earnest money

SOME INSTANCES OF CLAIMS WHICH ARE NOT ACTIONABLE

i. The right to recover damages for breach of contract
ii. A claim to profit
iii.Copyright , trademark and patent
INCAPABLE TRANSFEREES OF ACTIONABLE CLAIM
Section 136 of the Transfer of Property Act, 1882 declares
certain groups of people who cannot deal in the transfer of
actionable claims. Section 136 states that-

“No judge, legal practitioner or officer connected with any

Court of Justice shall buy or traffic in, or 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.”
Conclusion

Actionable claim is an intangible movable property, and it is

transferable. It mainly refers to the types of claims that can be
recovered through proceedings in Courts. Out of multiple such
kinds of claims, the concept of actionable claim includes two
types, which are claims on unsecured debt and beneficial
interest in movable property. Such claims can be transferred to
another person, but certain people are barred from becoming
transferee of actionable claims. This bar has been imposed in
order to maintain the integrity of Court proceedings.