The requirement of a written instrument for the transfer of an actionable claim and the need for strict proof of being a bona fide assignee for value.

Gentle, J.

1. The applicant is a debtor of the company in liquidation. On 17th February 1938, he borrowed from this banking company a sum of Rs. 1000, and as security for his loan he deposited 450 shares of two other companies. On 30th May 1938, repayment of this loan was demanded by the company. The applicant wrote a letter to the agent of the company on 4th June 1938. This letter is not available, but the contents are set out in the applicants affidavit in support of his application in para. 4, and it is not controverted that his recollection in regard to the contents is accurate. The letter was to the effect that the applicant was the holder in due course of a fixed deposit receipt with the Bank for a sum of Rs. 1000 standing in the name of Sri Bageerathi Ammal maturing on 28th July 1939, and he requested an adjustment of this debt from the company against the amount due from the applicant. An interview took place on the day of, or shortly after, the letter I mentioned, between the applicant and the agent. The substance of this interview is set out in para. 3 of the counter-affidavit and is not challenged by the applicant in his reply. At this interview, the applicant informed the agent that the depositor of Rs. 1000, the subject of the fixed deposit receipt, had attempted to obtain payment from the company for the amount covered by the receipt but was unsuccessful, and the applicant requested that he should be allowed to set off against his debt to the company the debt which was maturing in favour of the depositor. The recollections of the applicant and the agent are now at issue in regard to what subsequently transpired. The applicant says in his affidavit that the agent promised to allow a set off; on the other hand, the Official Liquidator in his affidavit says that he was informed by the agent that he promised, on being given the fixed deposit receipt signed by the depositor, to place the matter before the management and ascertain their views. Whatever may have been said, in my view, it is quite clear from the letter of the applicant dated 18th June 1938 what was the position he accepted. Two days previously, he had been told by the company that an adjustment could not be allowed against his debt before the date of maturity of the fixed deposit receipt but that this was being held as collateral security for the loan. The applicants reply in his letter of 18th June 1938 was that ho had paid the depositor the purchase consideration and he requested that the fixed deposit should be transferred to his name if it were not possible for the company to reconsider his original request to be allowed to set off. He also asked for return of the share certificates deposited as security. It is quite clear that, whatever may have been stated, he accepted the position that on that day there was no set off and the debt due from him was still outstanding to the company.

2. It is urged on behalf of the applicant) that no matter what may have transpired in June 1938, he is now entitled to set off against moneys due from him the moneys which ordinarily would have become due on the maturity of the fixed deposit receipt. In the light of the admissions and concessions which Mr. Krishnaswami Ayyar has made on behalf of the Official Liquidators, it is not necessary for me to go into the question of the right to set off. It is conceded that a debt, although not presently payable, can be set off against moneys owing to a company in liquidation. The application of the applicant was opposed on these grounds : (1) that there was no valid assignment; and (2) if there was, to allow a set off would amount to a fraudulent preference. It is now conceded that if the assignment in favour of the applicant is binding and established, then the applicant is entitled to set off. What is disputed is whether there was a valid assignment in law.

3. There was a loan made to the applicant which he was requested to repay. At about the date when repayment was dem