Document Fragment View

Matching Fragments

It is only by the operation of the equitable principle that as soon as the property comes into existence and is capable of being identified, equity taking as done that which ought to be done fastens upon the property and the contract to assign thus becomes a complete equitable assignment. In the case of a decree to be passed in the future therefore there could be no assignment of the decree unless and until the decree was passed and the agreement to assign fastened on the decree and thus became a complete equitable assignment. The decree not being in existence at the date of the transfer cannot be said to have been transferred by the assignment in writing and the matter resting merely in a contract to be performed in the future which may be specifically enforced as soon as the decree was passed there would be no transfer automatically in favour of the "transferee" of the decree when passed. It would require a further act on the part of the "transferor" to completely effectuate the transfer and if he did not do so the only remedy of the "transferee" would-be to sue for specific performance of the contract to transfer. There would therefore be no legal transfer or assignment of the decree to be passed in future by virtue of the assignment in writing executed before the decree came into existence and the only way in which the transferee could claim that the decree was transferred to him by assignment in writing would be by the operation of the equitable principle above enunciated and the contract to assign having become a complete equitable assignment of the decree."

A judgment debt or decree is not an actionable claim for no action is necessary to realise it, as it has already been subject of an action and is secured by a decree. A decree to be passed in future is also not an actionable claim and an assignment or transfer thereof, need not be effected in the manner prescribed u/s.130 of Transfer of Property Act. The assignment in writing or the decree to be passed would itself result in a contract to assign, which contract would become a complete equitable assignment on the decree being passed and would fulfil the requirement of Order XXI Rule 16, insofar as the assignment or the transfer of the decree would in that event, be effectuated by an assignment in writing, which became a complete equitable assignment of the decree when passed.

What is categorically held is, that if the plaintiff was to be declared as assignee of the decree, subsequently passed in favour of the defendant and entitled to release the decretal amount by execution, he could himself avail the provisions of Order XXI Rule 16 as the assignee of the decree which was passed subsequent to the date of assignment in writing in its favour.


Tilak





                                        42/49                    IAL 28351-23 ARF.doc

It is held that even if the equitable assignment be construed as falling within an 'assignment in writing' contemplated by Order XXI Rule 16 of the Code, it would in terms require an assignment of decree which was passed in future in favour of the assignor. Reference was made to another aspect in relation to the actionable claim and propounding upon the same, it was concluded as below: