On account of a breach of contract entered into with B, A suffered damages.

A
assigned to Z, the right to sue B for damages. Is the- transfer valid? Is it an
actionable claim?

According to Section 3 of the Transfer of property Act, actionable claim means:

1. Claim to an unsecured debt

2. Beneficial interest in a movable property

Instances of Actionable Claims

Some examples of actionable claims are:

1. Claim for arrears of rent.

2. Claim for money due under insurance policy.
3. Claim for return of earnest money.
4. Right to get back the purchase money when the sale is set aside.
5. Right of a partner to sue for an account of the dissolved partnership firm.
6. Right to claim benefit under a contract for the purchase of goods.
7. Right to get the proceeds of a business.

In all of these instances the amount for which the suits are filed are certain and
definite. So, such claims are transferable under actionable claims.

Claims not covered under Actionable Claim

Various types of claims are not covered under the head of actionable claim,
and hence cannot be transferred under the Transfer of Property Act.
 The right to claim damages, whether arising out of a tortuous or contractual
liability are not actionable claims. This right is not an unsecured debt, even though
it is a monetary obligation because of two reasons.

First of all, it is an uncertain amount of money, and second, it is not a part of

the original transaction.

Actionable claim under the category of unsecured debt only covers the
amount in the original transaction. Hence, it covers the principal amount and the
interest upon that principal, as these are of a certain amount. Whereas, damages is
uncertain, and hence, does not come under actionable claim.

Moreover, in cases of tortious liability such as defamation, or nuisance, the

damages is uncertain and personal or attached with immovable property, and hence
cannot be transferred.

For instance, if A defames B, then B has the right to sue A for defamation;
this right is personal in nature as B has been defamed and so, only B can have the
right to sue A. So, this right cannot be transferred and it is not an actionable claim.

An instance of nuisance would be if person X’s neighbour, Y, let his drain

pipes overflow into X’s lawn. Here, X has the right to sue for damages for the
nuisance caused by Y because of virtue of ownership that X has over his lawn.
Hence, X is the only person who has this right to sue and so, it is not a transferable
actionable claim. But, if X sells his property to a third person, Z, then Z, along with
the property, will also receive this right to sue Y for nuisance.
Instances of Claims not recognized as Actionable Claims

There are certain types of rights and claims which are not recognized as
actionable claims, and hence cannot be transferred. Some examples of this type of
claims are:

1. Right to get damages under the law of torts or for the breach of a contract:
Since these are uncertain amounts of money and hence, this cannot be
transferred.
2. Claim for mesne profits: This is also uncertain, and so cannot be allowed to
be transferred.
3. Copyright, patents and trademarks: These rights are personal in nature, as
these are available to that particular person.
4. Decree or judgment of debt: This cannot be transferred under actionable
claim, as after the judgment has been pronounced, no action subsists that
could be transferred.

In the case of Moti Lal v. Radhey Law, the Hon'ble Apex Court held that the right
of claiming damages, whether it arises out of contract or un-liquidated damages
arising out of tortuous liability, cannot be regarded as an actionable claim. 
Explain the difference between acknowledgment of a debt under Section 18
and Section 19 of the Limitation Act?

Comparison of Secs. 18 & 19 of the limitation Act.

1. Secs. 18 & 19 of the limitation Act are not mutually exclusive and Sec. 19
does not prevent the operation of Sec. 18. These sections cannot be treated, one as
a general and the other special.

A payment which, owing to some defect, does not fulfil the requirement
under Sec. 18, if the conditions of that section are fulfilled. As in the case of an
acknowledgment (Sec. 18), the payment under Sec. 19 must have been made
before the period of limitation has once fully run on.

As in the case of an acknowledgment (Sec. 18), the payment under Sec. 19

must be evidenced in writing.

Signature is essential in the case of an acknowledgment (Sec. 18).

In the case of payment under Sec. 19 either

a) the writing must have been signed by the person making the payment,
if the writing itself is in the handwriting of a different person, or

b) The writing must have been in the handwriting of the very person
making the payment, in which case he need not have signed it.

2. Acknowledgment under Sec. 18 operates only against the person against

whom such property or right is claimed.

A payment under Sec. 19 operates against all persons liable in respect of

the debt and not merely against the person making the payment.
3. Acknowledgment under Sec. 18 need not be addressed to the person
entitled to the property or right.

But a payment under Sec. 19 must be made to the person entitled to

payment.

4. Under Sec. 18 a mere writing containing an admission of liability in

respect of the property or right claimed is enough.

But under Sec. 19 two things are necessary, namely, a payment and written
record of such payment.

5. Under Sec. 18, a fresh period of limitation is allowed from the date when
acknowledged of liability is signed within the limitation period.

But under Sec. 19 such fresh period allowed from the time when the part-
payment is made and not from the date of acknowledgment of such payment.
A owes a debt to B. B dies. B's wife and children filed a suit against A for
recovery of the debt. A raises an objection that the suit cannot be maintained
without production of a Succession Certificate. Is the institution of the suit
bad in the eye of law? Can a decree be passed in the suit without a
Succession Certificate.

The law requires production of Succession Certificate by the legal

representatives of a deceased plaintiff, to get a decree for payment of ‘debt’ (to be
paid) by a defendant, so also to execute such a decree.

Section 214 of the Indian Succession Act, 1925 is the relevant provision of
law.

This provision applies to both continuation of trial for, and execution of, a decree:

1. for ‘payment of debt’ (to be paid) by the defendant; and

2. in an execution proceeding initiated by the legal representatives of a
deceased plaintiff/decree-holder.

It is held that the Succession certificate contemplated in Sec. 214 of the Indian
Succession Act, 1925 is needed only in respect of ‘debts’ or ‘securities’, and not
required in a suit for partition, compensation, maintenance etc

The main object of a Succession Certificate is to facilitate collection of debts on

succession and afford protection to parties paying debts to representatives of
deceased persons

The grant of a certificate does not establish a title of the grantee as the heir of
the deceased, but only furnishes him with authority to collect his debts and allows
the debtors to make payments to him without incurring any risk
Procedure for Obtaining Succession Certificate

To obtain succession certificate, a petition to the District Judge within whose

jurisdiction the deceased person ordinarily resided at the time of his or her death
or, if at that time he or she had no fixed place of residence, the District Judge
within whose jurisdiction any part of the property of the deceased may be found.

Revocation of the Succession Certificate

As per Section 383 of the said Act, a certificate so issued may be revoked for any
of the following causes:-

1. Process for obtaining the certificate was defective.

2. Certificate was obtained fraudulently.
3. Certificate becomes useless and inoperative due to circumstances