ACTIONABLE CLAIM

ACTIONABLE CLAIM

                                      

Actionable claim is defined in Section 3 of the Transfer of Property Act as a ‘claim to any debt other than a debt secured by mortgage of immovable property or by hypothecation or pledge of moveable property or to any beneficial interest in the moveable property not in the possession, either actual or constructive of the claimant which the civil courts recognize as affording grounds for relief, whether such debt, or beneficial interest be existent, accruing, conditional or contingent.

Accordingly, this mean, it excludes not only a claim to any immovable property for a debt but also a debt secured or any moveable property in possession of the claimant. It follows, therefore that it is a claim for a simple debt or liability and which can be realized by a legal action.  

An actionable claim is called, in English Law, a chose in action or a thing in action as against a chose or money in possession. It denotes incorporeal personal property of all disciplines and an interest in corporeal personal property not in possession of the owner which accordingly can only be claimed or enforced in action. Therefore, while the different types of moveable property governed by the Sale of Goods Act can be called as chose in possession, an actionable claim is also a type of moveable property called chose in action.  It is also a moveable property because a debt is a property and anything which is not immoveable property is moveable property.

Actionable claim as defined in Section 3 of the Transfer ofProperty Act, as a chose in action is different from two other such chooses in action namely the right or property by way of copyright, trade-mark, patent, or design, and also to stocks and shares or debentures of a limited Company or the negotiable instruments under the Negotiable Instruments Act, which also evidence a debt and which are recoverable by legal action.

Section 137 of the Transfer of Property Act clearly provides that sections 130 to 136 will not apply to stocks and shares or debentures or to instruments which are negotiable or to mercantile documents of title to goods.  Marine Insurance claim is also excluded by Section 135 A of that Act and is dealt with in the Marine Insurance Act, XI of 1933. They are also governed by independent separate statutes passed in respect thereof and are not, therefore, governed by the Transfer of Property Act.  That Act in Section 130 only provides for transfer of actionable claims as defined and circumscribed by the Transfer of Property Act. As to transfer of the earlier mentioned actionable claims separate provisions are made for transfer thereof by the statutes governing them.

Actionable claims within the meaning of Section 3 of the Transfer of Property Act, therefore, cover (i) claims to unsecured debts and (ii) claims to beneficial interest in moveable property not in possession actual or constructive whether present or future., conditional or contingent. Such actionable claims could be (a) a right to claim maintenance (b) a right to arrears of rent (c) a right to annuities (d) moneys payable under a contract for price or advance (e) a right to claim benefit of a contract (f) a partner’s claim for accounts and his share therein (g) insurance claim, other than marine insurance (h) salary in arrears (i) book debts (j) a fixed deposit receipt, etc.  However, a mere right to sue is not assignable.  Similarly, a decree is not assignable under this section, as no legal action is required to be taken to recover the claim.  The decree itself can be executed. Similarly any other property which is not transferable, under Section 6 of the Transfer of Property Act is not assignable under Section 130 of the Transfer of Property Act. Marine Insurance Policy, negotiable instrument and documents of title to goods are specifically excluded by Section 135 A and Section 137 of the Transfer of Property Act as stated above.

Assignment:

Every actionable claim or chose in action is assignable except in four cases:

(1)  where the assignment is prohibited by law,

(2) where the terms of the contract under which the claim accrues prohibit such assignment,

(3)  where the contract is of a personal nature, and

(4)  where the assignment would increase the burden on the other party.

An actionable claim can be recovered by a legal action by the person who is the claimant or creditor. Section 130 of the Transfer of Property Act provides that a transfer of an actionable claim shall be effected by execution of an instrument in writing, signed by the transferor or his duly authorized agent in favour of the transferee and in that case all the rights and remedies of the transferor, whether by way of damages or otherwise shall vest in the transferee, whether notice of such transfer is given to the debtor or not. But when no such notice of transfer is given to the debtor and the debtor in ignorance of such transfer repays the debt or claim to the original creditor or claimant, he would be discharged from the liability.  On such transfer the Transferee would get all the rights of the creditor including the right independently to recover the debt without the original claimant’s consent or co-operation.  The deed of transfer need not be signed by the transferee and also does not require attestation or registration.

The written instrument assigning a debt can be in any form, if the intention to transfer is clear. A mere letter to the assignee by the claimant that he has assigned the debt to him is sufficient.

An assignment of a debt may be absolute or by way of security or even as a gift. The words with or without consideration in the definition of actionable claims are used to cover even a gift.

An assignment becomes effective from the date of writing, unlike English Law under which it becomes effective from the date of notice to the debtor.

The provision in the Transfer of Property Act regarding assignment of actionable claim does not apply to claims under Marine Insurance Policy or Fire Insurance Policy or affect any provisions of the Insurance Aft, 1938.

Section 134 of the Transfer of Property Act also shows that assignment of the actionable claim by way of charge is also possible to secure the debt due by the transferor to the transferee and provides how the debt assigned when recovered is to be applied viz., first in payment of costs of recovery, secondly, in satisfaction of the amount secured and thirdly, in payment of the balance if any to the transferor or other person entitled thereto.  Section 136 if the Transfer of Property Act above quoted does not apply to assignment by a charge or security, though such assignment is also recognized in English Law as equitable assignment.

An actionable claim would include

(a)     any debt due to or moneys recoverable by the transferor (except the moneys payable under a negotiable instrument)

(b)     any moveable property belonging to the transferor and not in his possession or power and which he has a right to recover or receive and

©       any claim or benefit under a contract belonging to the transferor but without any liability attached thereto.

An Assignment can be made either by a formal document or even by a letter to the debtor of the transferer but not orally.  An irrevocable Power of Attorney to recover a debt and to adjust it towards the amount due to the done is held as an assignment. An actionable claim can be assigned even as a gift that is without consideration as Section 130 of the Transfer of Property Act in terms so provides.

Apart from what is stated above, the following are held to be actionable claims:

     (1)a debt due or to become due, or whether conditional or contingent

     (2)  future rents

     (3)  amounts payable under a deed

     (4)  amount due under a policy of life insurance

     (5)  a letter of credit

     (6)  right under a contract

     (7)  beneficial interest in moveable property

     (8)  confirmed sale price

     (9)  earnest money becoming repayable

   (10)  deposit receipt

   (11)  dividend due on shares, etc.

But a mere right to sue or claim for damages or mesns profits are not assignable.As regards transfer of shares, stock and debentures, the provision in respect thereof is made in the Companies Act.

As regards actionable claims in the nature of negotiable instruments, the Negotiable Instruments Act, makes special provision for the transfer thereof by endorsement. It may however be stated that a promissory note whether negotiable or not or other such instruments can be transferred by a separate instrument of transfer instead of by mere endorsement.

An assignment of an actionable claim is not required to be registered under the Registration Act.It is desirable that the document of assignment is executed both by the Assignor and the Assignee and in duplicate, one copy remaining with the Assignor and other with the Assignee.        

 More,
Advocate sevakumar

A COMPARATIVE LOOK AT NRIs, OCIs AND PIOs

A COMPARATIVE LOOK ATNRIs, OCIs AND PIOs

Indian citizenship and citizenship of a Foreign country cannot be held at the same time as it is not allowed by the Constitution of India.  A new class of Citizenship i.e.,Overseas Citizen of India (OCI) was therefore created by amending the Constitution to compromise with dual citizenship.

Dual Citizenship and holding of two nationalities at the same time of two different  countries is categorically prohibited by both Article 9 of the Constitution of India and Section 9 of the Indian Citizenship Act, 1955.OCI are specifically prohibited political rights and other rights by Section 7B of the Citizenship Act and they have only multiple entry lifelong visa facility to visit India any time for any purpose.

Under the Ministry of Home Affairs Scheme of August 19, 2002, the registration of Person of Indian Origin ( PIO ) Card holders was started and from December 2, 2005 the OCI scheme became operational.  We need to know the difference between an NRI, a PIO and an OCI.

For this purpose, the following description is given:

Non-Residential Indians ( NRIs ):

A person resident in India and a person resident outside India are defined in Section 2 of the Foreign Exchange Management Act, 1999 ( FEMA ).  However, this portion does not define the term NRI.  According to a notification, NRI means a person resident outside India who is either a Citizen of India or is a person of Indian Origin.

A person who resides in India for more than 182 days  in the preceding financial year and who comes or stays in India for any purpose is a person ‘resident’ in India according to FEMA.  A person who is not a resident in India is defined as a ‘Non Resident’.  An NRI, therefore, is an Indian Citizen who ordinarily residents outside India and holds Indian passport.

Persons of Indian Origin (PIO):

A foreign citizen who held an Indian Passport at any time; or he/she or either of his/her parents, grandparents or great grandparents was born in and was a permanent resident in India; or he/she is a spouse of a citizen of India or of a person of Indian Origin is what is meant by a Person of Indian Origin.

PIO card holders are permitted to visit India  without visa for 15 years and have to register with Foreigners Registration Officer ( FRO ) in India if the stay is more than 180 days continuously.  PIOs have equality with NRIs where certain facilities are concerned but do not have any political rights and may apply for Indian Citizenship after residing in India for a minimum of seven years.

Overseas Citizen ofIndia ( OCI ):  

A foreign national is eligible for registration as OCI if he was eligible to become a Citizen of India on January 26, 1950, or was a citizen of India on or at any time after the said date or belonged to a territory that became part of India after August 15, 1947 and his / her children and grand children are also eligible for registration as OCIs.  They will enjoy a multiple entry, multi purpose life long visa to visit India, do not have to register with Foreigners Registration Officer (FRO)/Police authorities however long they may stay in India and have the right to benefits notified under Section 7B of the Indian Citizenship Act, 1955.  If an OCI is registered for five years and resides in India for one year he can be granted Indian Citizenship but will have no political rights.

Bank accounts in India can be opened out of funds remitted from abroad, foreign exchange brought in from abroad or out of funds legitimately due to them in India by NRIs / PIOs.  They can open these accounts with Banks that are authorized by the Reserve Bank of India.  

More,-
ADVOCATE SELVAKUMAR.

REGISTRATION OF PROPERTY DOCUMENTS OPPOSED BY PUBLIC POLICY­­

REGISTRATION OF PROPERTY DOCUMENTS OPPOSED BY PUBLIC POLICY­­

Can a registration of a document be claimed as a matter of right? Indian Registration Act, 1908, has under section17 prescribed certain documents which are compulsorily registerable and under section 18, the documents, the registration of which is optional. As such can anybody claim as a matter of right, registration of a document which is compulsory under section17 of Indian Registration Act 1908.Various States have amended the main Registration Act and have framed rules there under.

Karnataka Government has inserted a new section 22-A, with effect from 23.10.1976 which empowers the State Government to prohibit the registration of certain documents as opposed to public policy, by notifying in official gazette, and the registering officers shall refuse to register any such document.

Government of Karnataka through Revenue Secretariat Notification No. RD/141

MUNOMV/2005, date.23/04/2005, has in exercise of powers conferred under section 22-A of Registration Act as amended by Karnataka Act 55 of 1976 has declared registration of following documents as opposed to the public policy. This is effective from 06/05/2005.

1.   Site with or without building in agricultural land which is not converted for non-agricultural purpose under section 95 of Karnataka Land Revenue Act 1964.

2.   Site described as Gramathana site (form no. 9, 10) or other site declared under form no.19 under rules framed under Karnataka Municipality Act 1964, but not actually converted as site.

3.   Site on a revenue land described as Gramathana Site or other site or a site with a building on which no layout plan is approved and a release certificate is issued from local planning authority like BDA, BMRDA, BIAAPA, BMIC.

4. Site on a revenue land described as Gramathana site or other site, fiats, industrial site, commercial site, without requisite permission under section 79A and 7B read with section 109 of Karnataka Land Reforms Act.

Thus the transfer of only the following properties is permitted.

a)Properties falling under Bruhat Bangalore Mahanagara Palike.

b) Properties allotted by BDA

c) Properties in BDA approved layouts

d) Properties in layouts approved by other local planning authorities like BMRDA, BlAAPA, BMIC etc.

In the preamble the notification, it is stated that many properties are registered based on bogus and fabricated documents which do not pass on legally perfect title to the purchaser. In many cases, the agricultural land is transferred by registration as non-agricultural land without actually converting it to a non-agricultural purpose in accordance with Section 95 of Karnataka Land Revenue Act 1964 and Karnataka Land Grant Rules 1989. This has led to haphazard growth of Bangalore and other cities.

More,

Advocate Selvakumar

REGISTRATION OF PROPERTY

REGISTRATION OF PROPERTY

All documents do not require registration compulsorily. The Transfer of Property Act, 1882 and the Indian Registration Act, 1908 have made registration of certain documents compulsory while in respect of certain other documents it is optional. According to Section 17 of the Indian Registration Act, 1908 registration of documents is compulsory if they relate to an immovable property.  Similarly, Section 54 of Transfer of Property Act 1882, stipulates that sale of immovable property the value of which is one hundred rupees or more should be registered. Since no immovable property is available for rupees one hundred or less than rupees one hundred, implicitly all sale deeds of immovable property need compulsory registration.  

Most of the instruments dealing with the immovable property for creating, declaring, assigning, limiting or extinguishing any right, title or interest in the property require compulsory registration, as enumerated under the Indian Registration Act, 1908. For executing an instrument, the first and the foremost aspect to be considered is the nature of the right intended to be transferred. If the document falls within the category of the documents which warrants compulsory registration, any avoidance of registration of such document would invalidate the document itself.  For documents which require mandatory registration certain procedures are prescribed.

Time limit for registration

Under Section 23 of the Registration Act, subject to certain exceptions, any document other than a Will has to be presented for registration within four months from the date of its execution.  Execution means signing of the document. It is not uncommon that the date of execution and the date of registration may differ. For the non-testamentary documents such as Sale Deed, Gift Deed,Mortgage Deed, etc, the time limit within which the document has to be registered is four months from the date of execution. Decrees drawn in terms of Compromise Petition wherein shares of the parties are allotted by metes and bounds require registration.

Even for registration of the court decree, four months time limit is stipulated under the Act. If the document is executed by all or any of the parties residing abroad, the same can be accepted for registration within four months from the date of receipt of the document in India. In case of doubt as to the validity of registration, the document may be re-registered within four months from the date when it is noticed that the registration is invalid or of doubtful validity. Where a document is executed by several persons at different times, it should be presented within four months from the date of the latest execution for registration. If a document is not presented for registration within the prescribed period of four months and the delay in presentation of the document does not exceed a further period of four months, then the parties can apply to the Registrar for registration of the document who may direct, upon payment of fine not exceeding ten times the actual registration fees, for registration of such a document [Sec.25].

A document relating to an immovable property can be executed out of India and later it can be presented for registration in India.  As per section 26 of the Registration Act, 1908, if a document purporting to have been executed by all or any of the parties out of India is presented within the prescribed period of time for registration, the Registering Officer may, on payment of proper registration fee accept such document for registration if he is satisfied that the instrument was executed out of India and the instrument has been presented for registration within four months after its arrival in India.

Fees of Registration

Fees charged for the registration or searching the register are prescribed by State Governments through Notifications.

Testamentary instrument

In case of Testamentary instrument, that is, Will, registration is optional and time limit is not prescribed. It can be registered any time before the death of the Testator. How-ever, it is advisable to register the same as soon as possible in order to avoid disputes about the genuineness of its execution. In case of registration of Will, the same may be presented by the Testator during his life time and after his death, by the beneficiary or the administrator, for registration.

A Will may be deposited with the Sub-Registrar in a sealed cover and such deposit may be done through an agent. After the death of the Testator, the sealed envelope will be opened and the contents recorded in the relevant register maintained in the Sub-Registrar's Office. The Original copy of the 'Will' will be in the custody of the Sub-Registrar.

Jurisdictional Sub-Registrar Offices

Generally documents have to be presented for registration only at the Sub-Registrar's office within whose jurisdiction the immovable property is situated. However, in certain exceptional cases, documents may be presented for registration with the Registrar who has been conferred with the power to register the documents. In fact, Sub-Registrars have been vested with the special power to register the document at the residence or office of the executants or to accept deposit of Will.

Presentation of the document

Documents which require mandatory registration have to be presented in the concerned Sub-Registrar Office for registration by the executants or person claiming under the Decree. However, in certain cases, the representatives of the Executants, duly authorized under Power of Attorney, can also execute the same on behalf of the Executants. A power of Attorney holder can execute the document, representing the Principal only if an authority has been vested in him under Power of Attorney, which is authenticated by the Registering authority within whose jurisdiction the Principal resides. If the Principal does not reside in India, then the Power of Attorney should be executed before and authenticated by a Notary Public or any Court, Judge, Magistrate, Indian Consul or Vice-Consul or the Representative of Central Government in that country and the same is required to be presented with the concerned registrar in India with in a period of three months of its receipt in India. When a document has been executed by more than one executants and after execution of the same, one of the executants refrain from attending the concerned Sub-Registrar's Office for registration, then the remaining executants can compel attendance of the executant reluctant to be present before the registering authority through the process of law.

Enquiry by the Registering authority

The Registering Officer is empowered under sec. 34 of the Registration Act to enquire whether or not the person is the same by whom it purports to have been executed such a document.  He may insist on production of proof for his identity and in case any person is appearing as a representative or agent, the Registrar may ask for relevant documents to show that the agent or representative has the right to appear on behalf of his principal.    

Effect of non-registration

What would be the repercussion if a document which requirescompulsory registration  is not registered? Section 49 of Indian Registration Act deals with this situation. It states clearly that such un-registered documents do not convey to the transferee a legally valid title and such documents are not admitted as evidence for any transaction affecting the property referred to in the document. However, there is an exception provided in the Act. The unregistered documents may be admitted as evidence in a suit for specific performance under Specific Relief Act or in any other related transaction, not required to be effected under a registered instrument.

Documents are mainly registered for conservation of evidence, assurance of title, and to help an intending purchaser to know if the title deeds of a particular property have been deposited with any financial institution or person for purpose of obtaining loan or advance against security of the property. Registration of documents acts as notice to the public and to protect oneself against the likely fraud. Therefore, it is advisable to register all documents connected with the immovable property irrespective of whether the registration is compulsory or not as it creates a permanent record of event which are reflected in encumbrance certificates.

As registered documents have higher value of evidence than unregistered documents it is always beneficial to you if you  get all your property documents registered within the stipulated period  irrespective of the fact that such registration is mandatory or not.

Endorsement

After accepting the document for registration, the Registering authority shall endorse the document regarding affixation of the signature of the Executant, payment of consideration, date and other relevant particulars. If registration is declined by either of the party, the same shall be endorsed on the document itself. Apart from this, the Registering authority shall also endorse on the Document the registration number, Book number, pages, volume or CD number and affix the seal of the office of the Sub-Registrar. Such a Certificate shall be copied in the Register meant for the purpose and copy of the map or plan, if any, shall be filed in Book No.1. Thereafter, the registered document will be returned to the person who has presented the same for registration or to his representatives.

More,

Advocate Selvakumar

CONSUMER COURT WILL FACILITATE IN REALTY PROBLEMS

Advocate Selvakumar|Property Advocates in Bangalore|Senior Lawyer

When a replacement metropolis based mostly homebuyer approached a client court to file a case against the developer who didn't deliver the project on the secure date, she didn't apprehend that client courts to admit cases involving possession of property or any quite delay in construction. These cases are preoccupied by the civil courts. Within the higher than mentioned example, the client has already paid ninety fifth of the full value of the property, however continues to be to urge possession. The matter is legal. 

Like our friend from Indian capital, several homebuyers don't apprehend that such cases don't return below the orbit of client courts. However, delay in construction isn't the sole downside that homebuyers face. There are alternative cases like deficiency in services at varied points even when possession of flat, wherever you'll be able to look for facilitate of client courts. Here's an inventory of some such issues during which you'll be able to take the developer to the buyer court. 

Construction defects and maintenance:

There may be variations from what you were secure, within the final style of the flat. If you are doing not get an equivalent style or outlay as mentioned within the advertisements or shown within the sample flat, it's a deficiency in services on the developer's half. 

Even poor construction quality will be the premise of a client criticism wherever you'll be able to drag the developer to a consumer court. "For the primary year when possession, the builder is susceptible to pay attention of damages like leaks in water pipes or cracks within the walls. If he refuses to try and do thus, you'll be able to lodge a criticism with the buyer court." Says Rajesh Goyal, decision maker, RG Group, a replacement Delhi-based realty firm. 

Also, it's the developer's responsibility to keep up parks, parking areas, clubs and alternative such amenities for the primary three-five years. However, just in case he's not doing an equivalent, you'll be able to invite a refund of the number that. You have got already paid at the time of shopping for the property. If he acts stubborn, you'll be able to drag the d v lover to the buyer court. 

Escalation Clause:

The price of the flat will go up, though marginally, throughout the course of construction. This could happen any time throughout the development. If you consider the agreement paper signed with the developer, you'll notice a rise-and-fall or alteration clause that permits the developer to require a unilateral call on value amendment throughout the course of construction. though' value changes rely upon varied factors like demand and provide within the housing sector, home equity loan rates or costs of raw materials, the clause does not mention the vary of value rise. "There is nothing a lot of that you simply will do regarding the amendment if you have got signed the builder-buyer agreement." Says Snehdeep Agarwal, Director, Bhartiya cluster, a true estate firm with comes in urban center. However, if the developer isn't ready to justify the rationale for a hike in value, you'll be able to look for facilitate. 

property agreement

Misuse of common areas:

The developer cannot sell the open spaces at intervals the premise for setting retailers and offices. Marketing of common areas of the complicated could remove the additional house that you simply have got. It’s been determined within the past that developers sell common areas while not the permission of the resident’s welfare association. Even putting in telecommunication towers on the roof of building would like permission of the residents in writing. 

Delay Compensation:

Although the property possession cases are preoccupied by civil courts, you'll be able to approach the buyer court if the developer fails to pay you the delay compensation charges in such cases. Most builder- emptor agreements have a delay- compensation clause. In keeping with this clause, associate quantity at the speed of, say, Rs.5-7 per sq.ft has got to be paid to the homebuyer just in case the property isn't delivered on scheduled date. 

Case Hearing:

The hearing in client courts is taken on a fast-track basis. You will get a judgment in a very single day if all the required documents are in situ. If the court finds the developer guilty, it orders a compensation quantity that he must pay to you. the buyer Protection Act, 1986, provides a three-tier system of redressal agency - 1st, at the district level referred to as the district forum; second, at the state level referred to as the state commission; and third, at the national level referred to as the national commission. These forums deal in matters of realty further as goods. 

"A client will file criticism within the district forum of the district involved wherever the worth of products, services and compensations, if any, up to Rs.20lakh. He will approach the state commission for cases involving sums of cash between Rs.20lakh and Rs.1crore, and therefore the national commission for quite Rs.1crore." Says fragmentize Khatri, a Delhi- based mostly attorney active within the Supreme Court. 

There is provision for appeals against orders of a selected forum by the aggrieved party before ensuing higher forum / commission and even from the findings of the national commission before the Supreme Court. 

How to set about it:

Approaching a client court is fairly straightforward. If truth be told you are doing not even would like a attorney for filing a case in a very consumer court. You’ll be able to write your issues in a very piece of paper and send it to the court through post. In your note, you would like to say the matter and therefore the name of the one that is accountable for the deficiency in commission. Says Khatri, "While, you must address the actual court and mention the topic is one line at the beginning of your application. Following this you must mention all the facts of your complaints below section twelve of the buyer Protection Act." 

Senior advocates

Most significantly, it's a requirement to say the compensation quantity in terms of cash that you simply need as refund from the developer. However, you would like to justify the number with correct documents, adds Khatri. If you name the developer, the court can summon an equivalent. The developer could appoint a representative to look within the court on his behalf. If your case is a previous one, you'll be able to invite associate redoubled quantity of compensation supported the actual fact that property rates have additionally redoubled over the amount. 

However, before you approach the buyer courts, discuss the difficulty with the developer. In most cases, developers would need to avoid legal battle and would need to resolve the matter outside the court.

More,

Property legal opinion

Property Registration