Q1: How Is the Transfer of an Actionable Claim Effected?

A1: The transfer of an actionable claim is executed through a written instrument signed by the transferor or their authorized agent. The transfer is complete upon the execution of this instrument, vesting all rights and remedies in the transferee. "Transfer of Property Act, 1882."

Q2: What Happens if the Debtor Is Unaware of the Transfer?

A2: If the debtor or other person has not received notice of the transfer, any dealings with the debt or actionable claim remain valid against the transferee, unless the debtor is a party to the transfer or has received express notice.

Q3: Can a Transferee of an Actionable Claim Sue in Their Own Name?

A3: Yes, upon executing the instrument of transfer, the transferee can sue or initiate proceedings in their own name without needing the transferor's consent or making them a party to the suit.

Q4: Are There Any Exceptions to This Provision?

A4: Yes, the provisions do not apply to the transfer of marine or fire insurance policies, nor do they affect the provisions of the Insurance Act, 1938.

Q5: Provide an Example of How the Transfer of an Actionable Claim Might Work.

A5: If A owes money to B and B transfers the debt to C, B can still demand payment from A. If A pays B without being aware of the transfer to C, that payment is valid, and C cannot sue A for the debt.

Q6: What Rights Does the Transferee Gain Upon the Transfer of an Actionable Claim?

A6: The transferee gains all rights and remedies of the transferor regarding the actionable claim, allowing them to enforce the debt or claim as if they were the original creditor.

Q7: What Is Required for a Notice of Transfer of an Actionable Claim?

A7: A notice of transfer must be in writing, signed by the transferor or their duly authorized agent. If the transferor refuses to sign, the transferee or their agent may sign. The notice must include the name and address of the transferee.

Q8: What Liabilities Does the Transferee Take on When Acquiring an Actionable Claim?

A8: The transferee takes the actionable claim subject to all liabilities and equities to which the transferor was subject at the time of the transfer. This means the transferee cannot claim rights that are not free from the burdens that applied to the transferor.

Q9: Can a Transferee Enforce a Debt if the Transferor Had Liabilities Related to That Debt?

A9: No, if the transferor had debts owed to the debtor at the time of the transfer, the debtor can set off those debts against any claim from the transferee. The transferee cannot enforce the debt if the transferor owed the debtor.

Q10: What Happens if a Transferor Warrants the Solvency of the Debtor?

A10: If the transferor warrants the debtor's solvency, this warranty applies only to the debtor's solvency at the time of transfer and is limited to the amount or value of the consideration if the transfer is made for value.

Q11: How Is a Transferred Debt Treated When It's Secured for an Existing or Future Debt?

A11: When a debt is transferred to secure another debt, any amount recovered from the transferred debt must first cover the costs of recovery, then be applied toward the secured amount. Any remaining amount belongs to the transferor or the person entitled to it.

Q12: Are There Any Restrictions on Certain Individuals Regarding Actionable Claims?

A12: Yes, judges, legal practitioners, and officers connected with courts of justice are prohibited from buying, trafficking in, or receiving any share of actionable claims. Claims related to such dealings cannot be enforced by these individuals.

Q13: Does the Chapter Apply to Negotiable Instruments and Mercantile Documents?

A13: No, the provisions in this chapter do not apply to stocks, shares, debentures, negotiable instruments, or mercantile documents of title to goods. This includes various documents used in business to signify possession or transfer of goods.

You can also learn about :
Sector 61 Apartments for Rent in Gurgaon | Sector 70 Apartments for Rent in Gurgaon | Contact Real Estate Agents in Gurgaon Sector 22 | Buy Property in Delhi | Model Tenancy Act 2021 Chapters