Mulraj Khatau v. Vishwanath
Rule established
An unsecured book debt not secured by mortgage or pledge is an actionable claim transferable by written assignment under S.130
Facts
- Mulraj Khatau held an unsecured debt (money owed by a debtor without any security)
- Mulraj assigned the debt to Vishwanath by a signed writing
- The debtor challenged the assignment, arguing the debt was not transferable
Issue
- Whether an unsecured book debt is an "actionable claim" within the meaning of S.3 and whether it can be validly transferred under S.130.
Held
- Yes. An unsecured debt is squarely within the definition of "actionable claim" (S.3: a claim to any debt other than a debt secured by mortgage or pledge). It can be transferred by a written instrument signed by the transferor (S.130). The debtor must pay the assignee once notice is given.
Ratio Decidendi
S.3 defines actionable claim to include any debt not secured by mortgage or pledge. A book debt (money owed on account) satisfies this definition. S.130 provides the mode of transfer: written instrument signed by the transferor. No registration is needed. The transfer is complete on execution of the writing.
How to use it in an exam
Foundation case for actionable claims chapter. Key line: "An unsecured book debt is an actionable claim, transferable by written assignment under S.130."
Source
Source: Mulla TPA 13th ed.
This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.