Actionable Claim

Actionable Claim in general terms signifies a claim or a debt for which you can take an action, which means there’s a claim and you can approach the court for the enforcement of the same. Here it signifies a debt and the actionable claim holder can move to the court for the recovery of that debt.

“The debt here is an unsecured debt. Actionable claim resembles Chose in Actions of English Law. But the law in India regarding actionable claims is narrower than English Chose in Action.”

Examples:

1. A lends Rs. 1, 00,000/- to B without any security. The debt given by A is an actionable claim and in case of failure on the part of B to repay it, A can move to the court.
2. A lends Rs. 1, 00,000/- to B. B keeps his property X as a security, which is worth Rs. 10, 00,000/-. This debt is not an actionable claim. Also, there is no need on the part of A to approach the court for the recovery of the same as he already has a security that is worth more than the debt itself. It doesn’t mean that A cannot approach the court. But this case will be covered under the mortgage.

Section 3 of Transfer of Property Act, 1882:

Section 3 of Transfer of Property Act, 1882 defines Actionable Claim.

According to Section 3, an actionable claim is a claim to:

1. any debt which is not secured by:

• Mortgage of immovable property, or
• Hypothecation, or pledge of movable property

Or

2. Any beneficial interest in movable property, which is not in possession of the claimant. The possession can be actual or constructive.

And the civil court recognizes these claims to be the affording ground for relief. The debt or beneficial interest can be:

1. Existent,
2. Accruing,
3. Conditional
4. contingent

In brief, it can be said that an actionable claim means a claim to an unsecured debt or any interest in movable property which is not in the possession of the claimant.

Examples:

1. X owes 500 rupees to Y. This is an actionable claim.
2. X promised Y to buy a product P from him. But later on, he refused to do the same and as a result, Y had to sell P at the loss of Rs. 500. Now Y can claim the damages from X but this claim is not an actionable claim.
3. A agrees to sell to B, a product P in the future. Here B gains a beneficial interest and hence is an actionable claim.
4. The rent due on the part of the tenants is an actionable claim.
5. 10,000 was given by A to B as earnest money for B’s house. Later on, B refuses to sell the house to A. The 10,000 rupees given as earnest money is an actionable claim.
6. Life insurance.