Section 130 TPA: Transfer of actionable claim

Section 130: Transfer of actionable claim

(1) The transfer of an actionable claim ¹[whether with or without consideration] shall be effected only by the execution of an instrument in writing signed by the transferor or his duly authorised agent, ²*** shall be complete and effectual upon the execution of such instrument, 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 debt or other actionable claim by the debtor or other person from or against whom the transferor would, but for such instrument of transfer as aforesaid, have been entitled to recover or enforce such debt or other actionable claim, 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 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 proceedings and without making him a party thereto.

Exception.—Nothing in this section applies to the transfer of a marine or fire policy of insurance ³[or affects the provisions of section 38 of the Insurance Act, 1938 (4 of 1938)].

Illustrations

(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 the provisions of section 132.

Footnotes in the official text

1.Ins. by Act 20 of 1929, s. 62.
2.The words and figures “and notwithstanding anything contained in section 123” ins. by Act 38 of 1925, s. 2, omitted by Act 20 of 1929, s. 62.
3.Added by Act 4 of 1938, s. 121 (w.e.f. 1-7-1939).

Questions on this section

3 questions in 10 of our papers cite Section 130. Try these from the free papers:

1. B, to whom A owes Rs 50,000, transfers the debt to C by a written instrument signed by B. Before A receives any notice of the transfer, B demands payment and A pays B in full. C then sues A for the debt. Under Section 130 of the Transfer of Property Act, 1882:
2. Under Section 130(1) of the Transfer of Property Act, 1882, the transfer of an actionable claim, whether with or without consideration, is complete and effectual: