The definition of actionable claims was originally contained in Section 130 of the Transfer of Property Act. The Chapter on actionable claims was remodeled by Act 2 of 1900, and the definition was amended and inserted in Section 3.[1]

According to Section 3 of the Transfer of Property Act, ‘actionable claim’ means a claim to any debt other than a debt secured by mortgage of immovable property or by hypothecation or pledge of movable property, or to any beneficial interest in movable property not in the possession, either actual or constructive, of the claimant.[2] If we take the entire provision into consideration, the following are to be taken up as the essential ingredients to determine an ‘actionable claim’:

a. An unsecured debt

b. A beneficial interest in a movable property not in actual or constructive possession of the claimant.

In the case of Gramaphone Company of India Ltd. v. Shanti Films Corporation[3], copyright was not considered as an actionable claim but was included within the ambit of “transfer” when the judgment clearly stated as follows:

“In India, copyright which is chose in action in England, is a beneficial interest in the movable property in the actual or constructive possession of the owner thereof, although strictly not an actionable claim, but capable of being transferred by assignment evidenced by a writing executed by the assignor or by his duly authorized agent.”

Prior to 1906, any claim to recover movable property as a part of beneficial interest was considered to be a right and not an actionable claim. In 1888, Ramakrishna v. Kurukal[4] had laid down that a right to recover elephants trapped on the owner’s land is a right of ownership in the elephants and not an actionable claim. However, in 1906, Jaffer Meher Ali v. Budge-Budge Jute Mills Co.[5] laid down as follows:

“the right to claim the benefit of a contract, or the right on certain conditions to call for delivery of goods mentioned in the contract was held to constitute a beneficial interest in movable property, conditional or contingent, within the meaning of the definition of actionable claim, and as such, assignable provided that the benefit sought to be assigned is not coupled with any liability and the contract was not induced by any personal considerations.”

The ‘movable property’ referred to in this situation should be one not in possession. It should be the one in which the claimant merely has his beneficial interest vested in. Somashekarrao v. KS Mishra[6] had declared that the right to recover the insurance money on the death of the assured person, or on the expiry of the endowment period, is an actionable claim.