Specific

Transaction
TANU BHARDWAJ
ASSISTANT PROFESSOR
SALE
Sale: Contract of Sale:
Sale (Sn.54 [Link]) is a transfer of ownership in exchange for a price paid or promised or part
paid and part promised. Sale of immovable property can be made by a registered deed if the
value is Rs.100/- or above. Delivery of the property takes place, when the buyer is placed in
possession of the property. Contract for sale is an agreement to sell. It is a Contract for sale of
the immovable property on terms settled by parties. This by itself will not create any charge or
interest in the property. Sale means transfer of ownership in consideration of price. Price is paid
or promised to be paid.
Essential of sale of immovable
property

1 must be two parties (i.e. seller and buyer).

2 Parties must have capacity to enter into contract.
3 There must be consideration. I Property must be transferred absolutely.
4 Stamp duty and other formalities should be complied with.
5 Subject matter is transferable property.
Procedure

By registered instrument if it is of value of Rs. 100 or more.

By registered instrument or by delivery of property when it is less than Rs. 100 in value.
Example: - A document is executed by the donor who make a gift of immovable property and the
deeds are delivered to done. The done accepts the gift but the document is not registered. Will
the gift be valid?
Rights and duties of the seller

Duties of seller:
The seller is bound
to disclose to the buyer any material defect in the property, which the seller is aware and which
cannot be discovered with ordinary care by the buyer, (caveat emptor). Otherwise it becomes
fraudulent.
 to produce to the buyer all documents of title relating to the property.
 to answer all relevant questions relating to the title etc. of the property.
 to execute a sale deed when the buyer renders the price.
 to take care of the property from the date of agreement until the date of the sale.
 to give possession to the buyer.
 to pay all public charges and rents due upto the date of the sale: he should also discharge
encumbrances, if any, unless the sale is made subject to any encumbrances.
There is a warranty that the seller has the power to transfer and also professes that interest
which he is transferring.
When the sale price is fully paid-up the seller is bound to deliver all the documents of title, to
the buyer.
 Rights of the seller:

He is entitled to all the rents and profits of the property till the ownership passes to the buyer.
Vendor's lien: a) When the buyer has become the owner and b) When the sale price has not
been fully paid, the Vendor gets a charge over the property for amounts unpaid by the buyer.
Rights and duties of the buyer

Buyer's duties.
1 The buyer is bound
To disclose to the seller any fact which would materially enhance the value of the property;
otherwise it becomes fraudulent.
2. To pay or tender the price at the time and place to complete the sale. He may adjust prepaid
or earnest money if any.
3. Where the property has passed to the buyer, the buyer becomes liable for any loss or
destruction to the property. Further as between the seller & buyer, the buyer should pay
public charges and rents which may become payable.
Rights of the buyer

The buyer is entitled to any benefit and increase in the value, rents etc, after the property has
passed on to him.
The buyer has a charge on the advances made in anticipation of the delivery and for interest on
such advances.
MORTGAGES
Meaning
Mortgage means transfer of an interest in specific immovable property for the purpose of
securing payment of money advanced or to be advanced by way of loan or performance of an
engagement which may give rise to pecuniary liability.
Essentials of mortgages

There must be transfer of an interest in immovable property.

Property must be specific
Transfer is for securing payment of loan or debt
Types of Mortgage

Simple Mortgage Section 58 (b)

Mortgagor gives personal undertaking to the mortgagee to repay amount due under the
mortgage, without delivering possession of mortgaged property, then it is called as simple
mortgage.
Essential elements
There should be a personal obligation on the part of the mortgagor to pay the debt.
An express or implied power is given to the mortgagee to cause the Property to be sold through
the intervention of the Court.
There is no transfer of ownership
2 Mortgage by conditional sale Section 58 (c)
Where the mortgagor apparently sells the mortgaged property on any of the following
conditions:
If loan is repaid, sale becomes void.
If loan is not repaid at specific time, sale will become absolute and binding.
If loan or debt is paid off within specific time, mortgaged property is re-transferred to the
mortgagor
3 Usufructuary mortgage Section 58 (d)
It is also known as mortgage with possession. Where mortgagor deliver possession of property to
mortgagee and authorized him:
 To retain possession of property until payment of money or debt and
To receive the rents and profits accruing from property in payment of mortgage money
4 English mortgage Section 58 (e)
When the mortgagor binds himself to repay mortgage money on certain date, and transfer the
mortgage property absolutely to mortgagee but subject to condition that he will re-transfer it to
mortgagor upon payment of mortgage money as agreed, mortgage is known as English
mortgage.
Essential elements
English mortgage is followed by delivery of possession. There is a personal covenant to pay the
amount.
It is effected by an absolute transfer of property, with a provision for retransfer in case of
repayment of the amount due.
Power of sale out of Court is given on certain persons under certain circumstances.
5 Mortgage by deposit of title deed Section 58 (f)
It is also known as equitable mortgage. Where mortgagor delivers to mortgagee documents of
title of property with intent to create security thereon, the transaction is known as mortgage by
deposit of title deed.
Essential elements

 It is created in specific towns by deposit of title-deeds, even though the property is situated
outside those towns.
 It is effected by deposit of material title-deeds. It is not necessary that all the deeds should be
deposited. It is sufficient if material documents are deposited.
Delivery of possession of property does not take place.
This mortgage is made to secure a debt or advances made, or to cover future advances.
This mortgage prevails against a subsequent transferee who takes under a registered
instrument.
This mortgage prevails against all who are not bonafide purchasers for value without notice
6 Anomalous mortgage Section 58(g)
A mortgage which does not belong to any of above categories is known as anomalous mortgage.
It is combination of two or more mortgages. Possession may or may not be delivered in
anomalous mortgage.
Modes of transfer in mortgage
section 59
by a registered instrument
By delivery of possession
By deposit of title deed
Right related to mortgaged
property

Rights of Mortgagor
Right of redemption Section 60
Mortgagor has right to redeem property provided as security.
Redemption means to take back the mortgaged property by paying the mortgage money at any
time after stipulated date for repayment.
Mortgagor can exercise this right:
Before right is extinguished by the act of parties or by decree of court, or I Before it is barred by
Limitation Act.
This right to redeem the property even after the time of payment has lapsed is called the Right or
Equity of Redemption. But the mortgagor is not entitled to redeem before the mortgaged money
becomes due on the date fixed for repayment of loan. His right to redeem arise only when
mortgaged money becomes due and not before.
Example: A borrows money on a mortgage and agree to pay it back after 10 years. A has obtained
gift of money from his relative at end of 5th year from date on which he borrowed money. Now,
A wants to pay the loan and redeem his property. He can’t do so, because the right to redeem
arises only when the money has become due at the end of 10 years.
Doctrine on clog of equity
redemption

Mortgagor has right of redemption by virtue of mortgage deed. This right is considered to be
absolute, and cannot be taken away from a mortgagor by means of any contract to the contrary.
Redemption means the act of the vendor of property in buying it back again from the purchaser
at the same or an enhanced price. Section 60 of the Transfer of Property Act, 1882 authorize
mortgagor to get his property back from the mortgagee on paying the amount borrowed from
him. Clog on a right means the addition of any clause or any provision under the mortgaged deed
which would alienate mortgagor of his property under certain circumstances.
As per Act, such provisions would not be able to alienate a mortgagor of his “Right of
Redemption", and such provisions would be void-ab initio. Right of redemption shall remain
effective unless the property has been sold off or under any statutory provision. Even if
mortgagee has went to the court for the foreclosure of the property mortgaged, mortgagor can
redeem his property by paying off the full amount in the court.
Doctrine of marshalling - Section
81

If the owner of two or more properties mortgaged them to one person and then mortgages one
or more of the properties to another person, the subsequent mortgagee is, in the absence of the
contract to the contrary, entitled to have the prior mortgage-debt satisfied out of the property or
properties not mortgaged to him, so far as the same will extend, but not so as to prejudice the
rights of the prior mortgagee. This is known as the Doctrine of Marshalling.
Charge - Section 100

Where immovable property of one person is by act of parties or by operation of law made
security for repayment of money of other and transaction is not mortgage it is called charge. All
provision which are applicable to simple mortgage are applicable to such charge. Charge can be
either fixed or floating charge
Conditions
i) The transaction should not amount to a mortgage.
ii) All matters relating to the rights and liabilities of the parties to the charge are governed by
those applicable to a simple mortgage. (Sn.59 [Link]).
iii) This will not apply to a trustee^ who makes a charge on the trust-property.
iv) Bonafide transferees without notice of the charge on the immovable property are protected.
A charge is an encumbrance on the property.
v) The formalities to be observed to create a charge are the same as for a simple mortgage. In a
charge, there is no transfer of any interest in the immovable property, as in a mortgage. There is
creation of a right of payment out of the property specified. Charge is less than a simple
mortgage& cannot take priority over it. It is a jus ad rem, and not jus in rem. There is no personal
covenant to pay; there is merely an obligation on the property for payment. A charge cannot bind
a bonafide purchaser for value who had no notice of the charge.
Fixed Charge

When charge is created on Specific property, it is known as fixed charge.

Example: Charge created on office building situated in particular locality. Fixed charge can't be
converted into floating charge.
Floating Charge

When charge is created not on specific property but class of property, it is known as floating
charge. Floating charge is charge on class of assets both present and future. In ordinary course of
business, it is changing from time to time. In case of floating charge, person can deal with
property in ordinary course of business. Here, deal with property means, person may use its
assets charged. Floating charge can be converted into fixed charge.
Example: Charge created on plant and machinery of factory.
A floating charge was created by a mortgage of book and other debts which shall become due
during the continuance of this security. ( Reyork shive Wool Combers Association, Supra).
Crystallization of floating Charge
A floating charge become fixed or crystallizes in the following cases:-
(a) When the money become payable under a condition in the debenture and the debenture
holder take some steps to enforce the security.
(b) When the company ceases to carry on business.
(c) When the company is being wound-up.
Difference between mortgage and charge
Mortgage Charge
It is transfer of an interest in specific 1. It does not involve transfer of any interest in immovable
property made by a mortgagor the property although it serves as a security as a security for the
loan. for the payment of the loan .
 It is created by act of parties. 2. It may be created by act of parties or by
It can be enforced against any transferee operation of law whether he takes it with or without
notice 3. It cannot be enforced against bone fide or mortgage transferee for consideration
having no
4. In a mortgage the mortgage can foreclose notice of charge.
mortgaged property. A charge –holder cannot foreclose the
5. In a mortgage ,there can be security as well property on which he has a charge .He can as
personal liability however get the property sold as in a simple mortgage.
5. In a charge created by act of the parties
when a particular property is specified the
remedy of the charge-holder is against the
property only.
LEASE
Meaning of Lease Section 105
It is transaction whereby one person transfers the right to enjoy in an immovable property to
another person for specific time or perpetuity for consideration. The person who transfer right in
property is known as lessor. The person in whose favor right in property is transferred is known
as lessee.
Total section (105-117)
Essentials of lease
•Transfer of a right to enjoy immovable property.
• Transfer is for specific time or for perpetuity.
• There must be consideration which is paid or promised to be paid. Here premium or rent is
known as consideration.
•Transfer must be accepted by transferee.
Transfer of right to enjoy
Registration
Meaning of license
License means right granted in respect of immovable property to enjoy certain benefits on land
in some way or other while it remains in the possession and control of owner.
Clubvala Vs. Russian
In it was pointed out that 'exclusiveness of possession' is a quality that distinguishes the lease
from a license. Effect of non-registration: If a document of lease which is to be registered has not
been registered at all, the position was controversial due to a number of High Court decisions. To
put an end to this the T.P. Act was amended in 1920. The Privy Council had held that non-
registration would render the lease void. According to the amendment where there is no
registration the doctrine of part performance may be invoked to protect the position of the
lessee. An unregistered lease may be admitted in evidence only to show that the possession is
under a lease. This is under section 27(a) of Specific Relief Act.
Difference between Lease and
License
Lease License
A lease is a transfer of interest in property License does not pass an interest in the property
Lease confers a right on transferee (lessee) for a License does not confer any such right but makes an
fixed period or period in perpetuity. unlawful.
Lease is transferable License is not transferable
Lessee can bring a suit in his own name License cannot bring a suit in his own name
It requires registration It does not requires registration

It is heritable It is not heritable

It is right in rem It is right in personam

 Rights and Duties of the Lessor and Lessee.

The T.P. Act under section 108 provides for the rights and liabilities of the lessor and lessee:
i) The rights and liabilities of the lessor.
a) The lessor should disclose any material or latent defects in the property leased.
b) The lessor must put the lessee in possession of the property.
c) There is a covenant for quite enjoyment of the property if the lessee is paying the rent during
the period of the lease.
ii) Rights and liabilities of the lessee.
Lessee's right to accretions if there is any accretion to the benefit of the property. The
lessee is entitled to such additions. This is of course subject to the law relating to alluvion.
Hence adjoining waste land brought under cultivation is not accretion.
b) Voidable lease: If the factual part of the leased property is destroyed (partially or
completely) by fire, tempest or floods or violence or by the enemy, the lease is voidable
at the opinion of the lessee. Of course, the lessee should not be the cause causans, for
the destruction of the property.
example :A, was a lessee running a shop. But due to mob violence the building was set
on fire. The owner claims the value of the building from A. Held: Owner not entitled. A
may avoid the lease if he so prefers
c) Right to Sub-lease : Unless prohibited by the lessor under the lease deed, the lessee is entitled
to sub-lease.
d) Right to fixtures: Anything affixed to the land becomes part of the land. The lessee is entitled
to such fixtures.
e) Right to repairs: Lessee may, by giving reasonable notice to the lessor, make the repairs if the
lessor has neglected it. The lessee may deduct such expenses from the rent or he may recover
from lessor.
f) Payment on behalf of lessor : If the lessor has neglected to make payments (House tax etc), the
lessee has a right to pay and get it reimbursed from the lessor.
g) Right to ingress : The lessee has free ingress(Right to enter) & Egress & to carry any crops
grown by the lessee when the lease is terminated.
h) Duty to restore possession: The lessee is bound to restore the property to the lessor in good
condition i.e., as the property was at the time of the lease (subject to the normal wear and tear).
However if the defect is caused by the lessee he should not use the property for a purpose
different
from a purpose agreed upon. He should not fell timber, pull down or damage buildings or commit
any other destructive or injurious acts thereto.
i) The lessee should not erect permanent structures on the property except for agricultural
purposes.
j) The lessee is bound to pay the rent as agreed upon. Leading cases are:
i) Spenser's Case.
ii) Katyayini devi Vs. Udaya Kumar.
Termination of lease:

A lease is terminated:
a) by efflux of time: If the lease is for a fixed period e.g. for 2 years, the lease terminates on the
expiry of 2 years.
b) On the happening of an event, e.g. The lease is for 20 years or ends on the death of the lessee
whichever happens first. Here the lease terminates on the expiry of 20 years or on the death of
the Lessee.
c) Termination of lessor’s Interest
Lease is effective so long as the lessor is having interest /right/ authority over the property. When
his authority /interest over it is terminated ,the lease also stands terminated automatically.
d) Merger:
When the lessor and lessee become one. This happens when the lessee buys the lease property;
of course he must buy the entire interest in the property.
e) Surrender:
A lease is terminated by surrender. It consists of yielding up of the term by the lessee to the
lessor, and of delivery of possession to the lessor, and, acceptance by the lessor. Hence, mutual
agreement is essential for surrender.
f) Implied Surrender:
This happens when the lessor accepts a new lease, with different terms and conditions, during
the continuance of the existing lease. Here, there is the implied surrender of the original lease.
(GeminiMohan V/s. Devendra)
g) Forfeiture:
By forfeiture the lease is terminated. Three circumstances are provided:
(i) There is forfeiture, when the lessee breaks an express condition. The lessor should serve his
notice to the lessee to quit.
(ii) There is forfeiture, when the lessee sets up the title to the property in a third person or in
himself. Notice by lessor to quit is essential.
(iii)When there is a provision in the lease, that on the lessee becoming insolvent, the lessor may
re-enter, the lease may be terminated by giving notice to the lessee. In the above three
circumstances, acceptance of rent by lessor, amounts to waiver or forfeiture.
h) Notice to quit:
Notice to quit or to terminate the lease should be given by the lessor to the lessee. If after giving
notice the lessor accepts rents, it amounts to waiver of notice to quit. A , the lessor gives B, the
lessee to quit. The period of notice expires. A accepts rents from B. The notice is waived.
Exchange
Exchange Of Immovable Property Section 118
Meaning
“When two persons mutually transfer the ownership of one thing for the ownership of another,
neither thing or both things being money only, the transaction is called an exchange."
Example: - Exchange of a car for two scooters or exchange of a house for 10 hectares of land.
Essentials of exchange

• Both parties must be competent to contract.

• Exchange should be with mutual consent of parties.
• There must be mutual transfer of property.
• Neither party has paid only money.
Any such transfer can be made in the same manner as is done in respect of sale. A partition of
H.U.F. is not an Exchange. The parties to Exchange are subject to the same rights & liabilities of
the Vendor and the Vendee.
Any defect in the title of the property exchanged, is to be set right by that party whose property
had the defective title.
A transfers his house to B and B transfers his wet land and pays cash of Rs.5,000/- to A as
consideration. This is an Exchange. If B had given money only, then it is not an Exchange.
Gift Section 122-129

Meaning
Gift means transfer of certain existing movable or immovable property made voluntarily and
without consideration, by one person to another. Person who transfer property is known as
donor. Person in whose favor property is transferred is known as donee.
Essentials of gift:

Transfer must be made voluntarily and without consideration.

Transfer must be accepted by donee. Acceptance by donee should be during his lifetime.
Subject matter should be existing property. It may be movable or immovable property.
Procedure
A gift of immovable property must be effected by a registered instrument signed by or on
behalf of the donor,
And attested by at least two witnesses.
Requisites of a valid gift:

Section 122 of [Link] defines a gift. 'It is the transfer of certain existing movable or immovable
property made voluntarily and without consideration and accepted by or on behalf of the donee'.
The person who makes the gift is the donor.
The donee must accept the gift:
a) during the life time of the donor and
b)While the donor is still capable of giving the property gifted. But if the done dies before
acceptance the gift is void.
Gift of movable property may be registered or may be effected by delivery. However gift of
immovable property of any value requires registration under sections 17 (a) of the Registration
Act. It must be signed by the donor and must be attested by two witnesses. Gift to God Almighty
may be oral or may be in writing or may be registered.
A makes a gift of his jewels to B. This may be done by delivery.
A makes a gift of a piece of land worth Rs.50/-. This is to be registered.
The property must be existing at the time of the gift. A gift of future property is void. When a
gift
is made to several persons and one or more donees does not accept, then it is void respect of
those who do not accept.
Revocation of gift:

Conditional gifts:
The fundamental rule is that 'A resumable gift is not a gift at all.' A gift once given cannot be
revoked at the mere will of the donor; such a gift if made, is void ab initio. But, a conditional gift
is void. A conditional gift which attaches a condition subsequent is valid if the condition is not
vague or illegal or immoral or opposed to public policy or impossible of performance. Hence
conditional gifts may be made.
Ex.: A gifts to B a plot of land, reserving to himself with the consent of B, to take back the plot if B
or his descendants die before A. B dies without any descendants during A's life time. The
condition is valid and A may take back the plot.
b) A make a gift to C, a concubine, for her continued relationship with the donor. The condition is
immoral therefore gift is void.
c) A gives Rs. 1 lakh to B reserving to himself with B's consent the right to take Rs. 25,000 at his
pleasure. Gift is valid upto Rs.75,000/ only. It is void in respect of Rs.25,000/-.
(ii) Gift made under coercion, fraud undue influence or misrepresentation may be revoked by the
donor.
Protection of Transferees: Transferees who take the property for consideration and without
notice are protected against any prejudice that may result due to revocation by the donor. The
leading case is: All card Vs. Skinner A, a sister executed a gift to S, the lady superior under undue
influence. Later A sued to set aside the gift. A would have won but there was too much of delay is
suing. Hence, her claim was dismissed.
Onerous Gift:

Section 127 of [Link] deals with onerous gift. It means a single transfer made to the donee but
some of the properties gifted are burdened by obligations. The donee must take the entire gift. If
he accepts only to take those which are without obligations, then the gift is void. But if the gift is
in two or more separate and distinct transactions, the donee may select at his liberty and refuse
those which are not beneficial to him.
Eg. : A gifts in one transaction, 200 shares of X & Co. a prosperous company and also 100 shares
of Y & Co. a company in difficulties. Heavy calls are expected from Y & Co. A may take the
entire gift. He is an onerous donee. He cannot take the gift of the shares of X & Co. only.
A minor may repudiate the onerous gift after attaining majority. Effect of Onerous gift: The donee
is liable to the extent of the total gifted property in his hands.
Universal Donee:

Here a gift of the entire property of the donor is made to a donee. The donee is liable for all the
debts, dues and liabilities of the donor at the time of the gift. This liability extends to the extent of
the property in the hands of the donee. Such a person who takes the entire rights and liabilities is
called a universal donee. Property means here movable and immovable. If A makes a gift of his
immovables only and not movables to B, B is not a universal donee.
The universal donee is liable only to the extent of the immovable and movable property comprised
in the gift.
The liability is with reference to the tune of gift by the donor, that is universal donee is not liable
for debts & liabilities incurred by the donor after the universal gift is made
Donation mortis causa
Actionable Claims
Provisions relating to actionable claim Section 3
Meaning
Actionable claim means a claim to unsecured debt. Here debt is not secured by the mortgage of
immovable property or by pledge of movable property. The debt may be existing, accruing,
conditional or contingent.
Definition
"Actionable claim means a claim to any debt other than a debt secured by mortgage of
immovable property or hypothecation or pledge of immovable property or to any beneficial
interest in movable property not in the possession, either actual or constructive, of the claimant,
which the civil courts recognize as affording ground for relief whether such debt or beneficial
interest be existent, accruing, conditional or contingent." (Section 3).
Claims. - (1) as to unsecured debts, or
(2) as to beneficial interest in movable property.
Actionable claims therefore include :
1 as to unsecured debts or
2 as to beneficial interest in movable property
Illustrations. - (a) A owes Rs. 1,000 to B. The debt of Rs. 1,000 is an actionable claim.
(b) A pays Rs. 5,000 to B for his house in anticipation of the execution of the sale-deed. This
repayment is an actionable claim.
(c) A lets a farm to B on an annual rent of Rs. 5,000. This Rs. 5,000 is an actionable claim.
(d) Money due for goods sold.
(e) The right to claim benefit of a contract for the purchase of goods.
(f) A claim to money due under insurance policy.
(g) A claim to rent to fall due in future.
(h) A claim to recover arrears of maintenance.
(i) A Mahomeden widow's claim for unpaid dower.
(j) A negotiable instrument
The following are not actionable claims :
1. Debts secured by mortgage of immovable property.

2. Damages for breach of the contract.

3. Damages in tort.

4. A claim to mesne profits.

Mode of Transfer of Actionable
Claims
Section 130 of Act provides regarding mode of transfer of Actionable claims as:-
"(1) The transfer of an actionable claim 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, shall be completed and effectual upon the execution of such instruments, 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 proceeding and without making him a party thereto.
Exception. - Nothing in this section applies to the transfer of a marine or fire policy of insurance
or affects the provisions of section 38 of the Insurance Act, 1938 (4 of 1938)."
(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 provisions of Section 132.
Rights and Liabilities of
Transferee of an Actionable
Claims Rights.
Rights and Liabilities of Transferee of an Actionable Claims Rights. - From the date of the transfer,
all the rights of the transferor in the actionable claim vest in the transferee. The transferee may
sue or institute proceedings for the actionable claim in his own name without obtaining the
transferor's consent to such suit or proceedings and without making him a party thereto.
Liabilities. - The transferee of an actionable claim is to take it subject to all the liabilities and
equities to which the transferor was subject in respect thereof at the date of the transfer.
(Section 132).
Illustrations. - (1) A transfers to C a debt due to him by B, A being then indebted to B. C sues B for
the debt due by B to A. In such suit B is entitled to set off the debt due by A to him, although C
was unaware of it at the date of the transfer.
(2) A executed a bona in favour of B under circumstances entitling the former to have it delivered
up and cancelled. B assigns the bond to C for value and without notice of such circumstances. C
cannot enforce the bond against A.
Persons disqualified to buy an actionable claim. - Section 136 enacts : `No Judge, legal practioner
or officer connected with any Court of Justice shall buy or traffic in, or stipulate for, or agree to
receive any share of, or interest in, any actionable claim, and no Court of Justice shall enforce, at
his instance, or at the instance of any person claiming by or through him, any actionable claim, so
dealt with by him as aforesaid.'
The object of this prohibition is to maintain the standard of justice. "It is of great importance in
all countries that no officer of a Court of Justice should be even exposed to the suspicion that in
the discharge of his official duties his conduct may be influenced by any personal consideration."