- Bookmark
- Share
- CaseIQ
Hirachand Amichand Gujar v. Nemchand Fulchand Marwadi
Factual and Procedural Background
The firm of Jivraj Amichand entered into contracts to purchase specified goods from Laxmi Mills at various rates. Subsequently, the same firm contracted to sell these goods to the defendant firm, Nemchand Gulabchand, at a profit. The defendant refused to take delivery and purportedly sold the goods against the defendant's interest, resulting in an approximate loss of Rs. 13,000 to Jivraj Amichand. Instead of filing a suit for damages for breach of contract, Hemchand, a partner of Jivraj Amichand, purported to transfer the right to recover damages to the plaintiff. The trial court dismissed the suit on the ground that the defendant did not breach the contract. The matter was then brought before the appellate court for review.
Legal Issues Presented
- Whether the right to claim damages for breach of contract can be transferred under Section 6(e) of the Transfer of Property Act.
- Whether a mere right to sue for damages qualifies as an "actionable claim" under Section 3 of the Transfer of Property Act.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Abu Mahomed v. S.C. Chunder (1909) I.L.R. 33 Cal. 345 | Clarification that a mere claim for damages for breach of contract is not an "actionable claim" under the Transfer of Property Act and thus not transferable. | The court relied on this precedent to conclude that the right to claim damages was only a right to sue and not transferable as an actionable claim. |
Court's Reasoning and Analysis
The court analyzed the nature of the right purportedly transferred by Jivraj Amichand. It held that the right to claim damages for breach of contract is a mere right to sue and does not constitute an "actionable claim" as defined under Section 3 of the Transfer of Property Act. Consequently, such a right cannot be transferred under Section 6(e) of the Act. The court relied on the reasoning of the Calcutta High Court in Abu Mahomed v. S.C. Chunder, which held that a claim for damages for breach of contract is not transferable. The court also addressed a procedural point raised by the appellant regarding costs, concluding that since the appellant sought to challenge the trial court's decision, he must bear the costs of the appeal.
Holding and Implications
The appeal is dismissed.
The direct effect of this decision is that the purported transfer of the right to claim damages for breach of contract is invalid under the Transfer of Property Act. The appellant is ordered to pay the respondents' costs of the appeal. The court did not establish any new precedent but reaffirmed existing legal principles regarding the non-transferability of mere rights to sue for damages.
1. The firm of Jivraj Amichand entered into contracts for the purchase of specified goods at various rates as evidenced by the sale-notes from the Laxmi Mills. Then the same firm contracted to sell the goods bought under the aforesaid agreements to the defendant firm, Nemchand Gulabchand, at a profit. Jivraj Amichand complained that the defendant would not take delivery and purported to sell the goods against the defendant. The result vas that owing to the refusal of the defendant to take delivery there appeared to be a loss of Rs. 13,000 odd to Jivraj Amichand. It was open then to Jivraj Amichand to file a suit against the defendant for damages for breach of the contract, Instead of so doing, Hemchand, one of the partners of the said firm, purported to transfer to the plaintiff the right to recover damages.
2. The suit was dismissed in the trial Court on the ground that the defendant did not break the contract. When it came before us in appeal it seems to us obvious that the right to claim damages against the defendant's firm could not be transferred under Section 6(e) of the Transfer of Property Act. It was merely a right to sue, and it was not a transfer of an 'actionable claim' as defined in Section 3 of the Act, being neither a debt nor a beneficial interest in moveable property.
3. The same point had to be decided by the High Court of Calcutta in Abu Mahomed v. S.C. Chunder (1909) I.L.R. 33 Cal. 345. Maclean C.J. said (p. 351):
I do not think that we can properly bring a mere claim for damages for breach of contract within those words (actionable claim). Now, if it does not fall within the definition of actionable claim what is it except a mere right to sue, a mere right to sue for damages resulting from an alleged breach of contract. It seems to me that it is not anything more or leas than that; and if so, that cannot be transferred.
4. With due respect that reasoning seems obviously right. Therefore this appeal must be dismissed. The appellant's counsel urges upon us that he ought not to be made to pay respondents' costs, as this point was not taken in the Court below. But it was open to the respondents' counsel to dispute the plaintiff's case in this Court on any point which was open to him, and as the plaintiff was not satisfied with the decision of the trial Court, but wished to take his chance of obtaining a decision in his favour in this Court, he must pay the costs of the appeal.
Alert