Abu Mahomed v. S.C Chunder

Maclean, C.J:— The facts of this case lie within a very narrow compass. It appears that by a contract, dated the 2nd of December 1904, Messrs Ebrahim Hajee Sulaiman & Co. purchased from the Defendant certain quantity of B. twills—so many hundred bags, delivery from January 1905, so many bags a month. Certain of those bags were delivered in pursuance of the terms of the contract, but in March 1905, the Defendant did not deliver the bags deliverable for that month, and loss, as the Plaintiff says, resulted to the purchasers from that default on the part of the vendor. The purchasers, Messrs Ebrahim Hajee Sulaiman & Co. eventually became insolvent, and the Official Assignee of Bombay conveyed the outstandings, assets and their interests in the executory contracts to one Sulaiman Cassim Peroo Mahomed, who again assigned his interest in those contracts to the Plaintiff by an assignment-deed dated the 5th of July 1906. The Official Assignee by his assignment, which is dated the 6th of June 1906, assigned “all actionable claims arising from the transactions of the Bombay and Calcutta firms, whether entered in the books or not, and the benefits of all contracts entered into by the Bombay and Calcutta firms of Ebrahim Hajee Sulaiman & Co.” to Sulaiman Cassim Peroo Mahomed, and he assigned the same over to the Plaintiff. The Plaintiff then brought this action and, the first point taken, and successfully taken, by the Defendant is that the Plaintiff cannot maintain the suit: and, Mr. Justice Stephen held that as the Plaintiff was a transferee merely of a right to sue, he could not maintain the action.

The question we have to decide depends upon two or three short considerations. As I have noticed, the contract had been broken and the right to damages had accrued before anything was vested in the Official Assignee under the insolvency—that, of course, is a very material feature in the case. The first question is whether, as regards the particular case we are dealing with, that which the Plaintiff purchased was a mere right to sue, or, if it were not that, what was it. Under sec. 6 of the Transfer of Property Act, the Statute enacts that “a mere right to sue cannot be transferred:” and, it is noticeable that the language of that section is much wider than was the language of the corresponding section in the Transfer of Property Act which was thereby repealed. If this was a mere right to sue, it cannot be transferred. Now, what can be transferred under the Act?—Any actionable claim can be transferred: and, sec. 130 points out how it may be transferred. What is an actionable claim? If we look at sec. 3, an “actionable claim” means a claim to any debt: but, this is not a claim to any debt; this is a claim to damages of an unascertained amount, resulting from a breach of contract on the part of one of the parties to that contract. Is it then a “claim to any beneficial interest in moveable property not in the possession, either actual or constructive, of the claimant, which the Civil Courts recognise as affording grounds for relief, whether such debt or beneficial interest be existent, accruing, conditional, or contingent?” I do not think that we can properly bring a mere claim for damages for breach of contract within those words. 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 less than that: and if so, that cannot be transferred.

It is clear, whatever the principle may be underlying it, that, according to the English law, an assignment of damages for an alleged breach of contract would not entitle the assignee to sue; and, if one may speculate, the words “a mere right to sue cannot be transferred,” in the Transfer of Property Act, are based upon the same principle. However, in these cases we must ascertain what the law is in India and not in England. I have referred to the sections of the Transfer of Property Act which deal with the matter. In this view, it does not seem necessary to discuss the English authorities which have been cited, though several of them appear to be in accord with the view I have stated.

For these reasons, Mr. Justice Stephen's view seems to be right and the appeal must be dismissed with costs.

Harington, J.:— I agree, and I think the position of the seller and the buyer at the expiration of the month of March was this:— The seller had to deliver certain goods and he had failed to do so. The result was that the benefit with regard to the contract for delivery during the month of March was at an end and, all that the buyer was to do was to sue the seller for damages for breach of the contract, which the seller had failed to perform. Some months after the breach of this contract, the present Plaintiff became, under a deed of assignment, entitled inter alia to the actionable claims to which the original seller was entitled. The question really resolves itself into this. Was this right to recover damages for the breach of contract, which could no longer be fulfilled, an actionable claim or merely a right to sue. In my opinion, it was merely a right in the seller to sue for such damages, as he might be able to prove, he had sustained. Those damages might merely be nominal or, on the other hand, they might be substantial. If that were so, then that right could not be passed under the assignment, by virtue of the provisions of sec. 6 of the Transfer of Property Act, cl. (e): and, moreover, the assignment does not purport to pass anything more from the seller than the actionable claims to which he was entitled. Then, if the definition of actionable claim given in the Transfer of Property Act is looked at, it is clear, I think, that a right to sue for damages—unascertained damages,—consequent upon a breach of contract, does not fall within that definition.

The result is that I agree that the judgment of the learned Judge in the Court of first instance was right and that this appeal should be dismissed.

Fletcher, J.:— I do not dissent, but I feel very considerable doubt that the Statute meant to limit the right of a person to assign his right under a contract by the fact that the other party to the contract had broken it.

Messrs Manuel & Agarwalla, Attorneys for the Appellant.

Mr. N.G Roy, Attorney for the Respondent.

P.R.C

Appeal dismissed with costs.