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1931 Supreme(SC) 82

PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD THANKERTON, LORD SALVESEN, AND SIR GEORGE LOWNDES.
MANMATHA NATH MULLICK - Appellant
Versus
HEDAIT ALI (DEFENDANTS) - Respondents
On appeal from the High Court at Patna.
Decided On : Nov. 20. 1931.

Advocates:
Solicitors for appellant: Watkins & Hunter.

The assignment of a right to recover a definite sum of money for reimbursement of expenses paid under a contract is an actionable claim under Section 130 of the Transfer of Property Act, 1882, and not a prohibited transfer of a "mere right to sue" under Section 6(e).

Headnote:(A) Transfer of Property Act, 1882 - Section 6(e) and Section 130 - Transfer of a claim for a definite sum of money - Assignment of the right to recover government revenue instalments paid by a purchaser on behalf of a lessee - Whether such assignment constitutes a transfer of a "mere right to sue" - A claim for reimbursement of a precise sum disbursed to meet a contractual obligation is an actionable claim and not a mere right to sue.

(B) Actionable Claim - The failure of a party to fulfill a contractual obligation to pay a specific sum does not necessarily give rise to a claim for damages but to a claim for reimbursement of the actual sum disbursed.

Facts of the case:
A lessee of two properties failed to pay government revenue instalments. The mortgagee, who subsequently purchased the properties in execution, paid these instalments to prevent the properties from being sold. The original lessor executed a deed of assignment in favor of the purchaser, assigning the right to recover these instalments and appointing the purchaser as an attorney to sue for the recovery of the same. The High Court held that the assignment was a transfer of a "mere right to sue" for damages and was therefore inoperative under Section 6(e) of the Transfer of Property Act, 1882.

Findings of Court:
The assignment was not for a mere right to sue but for a claim for a definite sum of money which the lessee was contractually bound to repay. This constitutes an actionable claim to which Section 130 of the Act applies.

Issues: Whether the assignment of the right to recover specific government revenue instalments constitutes a transfer of a "mere right to sue" prohibited by Section 6(e) of the Transfer of Property Act, 1882, or an actionable claim.

Ratio Decidendi: The court ruled that a claim for reimbursement of a precise sum disbursed to meet an obligation is an actionable claim and not a claim for damages. Therefore, the prohibition against transferring a "mere right to sue" under Section 6(e) does not apply to the assignment of a debt or a specific sum of money owed under a contract.

Result: Appeal allowed; judgment of the High Court reversed in part.

Legal Category Hierarchy

  • property law
    • transfer of property act
      • actionable claims
      • non-transferable interests
  • contract law
    • lease
      • lessee obligations

Judgement

Appeal (No. 13 of 1930) from a decree of the High Court (December 21, 1928) reversing in part a decree of the Subordinate Judge of Cuttack (June 30, 1927).

The suit was brought by the appellant against Sheikh Haider Ali, since deceased and represented by the respondents, and others, to recover certain instalments of Government revenue which became due, as to some, before and, as to others, after a purchase of the properties by him ; the first defendant was lessee of the properties and liable to pay the revenue by the terms of his lease.

The facts appear from the judgment of the Judicial Committee.

The Subordinate Judge made a decree for the amount claimed.

Upon appeal the High Court (Kulwant Sahay and Macpherson JJ.) varied the decree by dismissing the suit so far as it related to instalments which fell due before the purchase. The learned judges held that a deed of assignment of July 28, 1925, the terms of which are sufficiently stated in the judgment, from the lessor to the purchaser was inoperative having regard to s. 6 (e) of the Transfer of Property Act, 1882, as it was a transfer of " a mere right to sue."

1931. Oct. 19. De Gruyther K.C. and Dube K.C. for the appellant.

The respondents did not appear.

Nov. 20. The judgment of their Lordships was delivered by

LORD SALVESEN. This is an appeal from a judgment and decree dated December 21, 1928, of the High Court of Judicature at Patna, which varied a judgment and decree dated June 30, 1927, of the Subordinate Judge of Cuttack.

The facts of the case which are not in dispute may be shortly stated as follows One Nani Mohan Banerji was an owner of two taluks, which may be shortly described as Narendrapur and Krishnapur. These properties were mortgaged for a total sum of Rs. 1,49,000 and the appellant also held two postponed mortgages over the same properties for a sum of Rs.35,500. On December 9, 1914, Banerji executed a lease of his two taluks in favour of the first defendant. Under this lease the lessee agreed to pay the lessor a yearly rent and, in addition, the Government revenue cesses and other public demands. The lease also contains the provision that in case of any breach of the covenants to be observed by the lessee he should be liable in damages.

In 1917 the first mortgagees brought a suit to enforce their claims under the mortgages they held. As the result the two taluks were sold in execution to the appellant in 1924. The appellant purchased Narendrapur on January 26, 1924, and Krishnapur on May 17, 1924. The lessee continued in possession of the two taluks until the expiry of his lease on September 9, 1924, when he gave up possession. He has since died and his representatives are the respondents, who have not appeared.

During the currency of the lease the obligations of the lessee were duly performed until 1923, when he failed to pay the revenue instalment due in November in respect of taluk Narendrapur. He similarly failed to pay the revenue and cesses due in April, 1924, on the said taluk, and also the instalment of revenue and cesses due in April, 1924, in respect of taluk Krishnapur. In order to save the taluks from sale the appellant paid these instalments and certain penalties to the Collector in respect of their not having been paid at the due dates. Although in the suit these penalties are sued for, Mr. De Gruyther in the course of the hearing stated that in respect of the small amount involved he limited his claim to the instalments actually paid.

In November, 1923, when the first instalment of revenue which is sued for in respect of taluk Narendrapur became due, Banerji and not the appellant was the owner of the two taluks, and the same applies to the instalment of the revenue claimed to meet the arrears of Government revenue in respect of taluk Krishnapur. As regards the other sum claimed, it became due after the appellant had purchased Narendrapur but during the currency of the lease which expired in September thereafter.

Both the Courts have









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