Section 130 of TPA : Section 130: Transfer Of Actionable Claim

Explanation using Example

Imagine that Priya has a business and she has supplied goods to Rohan on credit, creating an actionable claim for the amount owed. Priya then decides to transfer this claim to her friend, Amit, because she needs immediate cash and Amit is willing to buy the debt at a discounted rate. According to Section 130 of the Transfer of Property Act, 1882, Priya can transfer this actionable claim to Amit by executing a written instrument, such as a deed of assignment, and signing it.

Once the deed is signed, Amit acquires all the rights to recover the debt from Rohan. Amit can now directly approach Rohan for the payment without needing Priya's consent or involving her further in the recovery process. However, if Rohan was not notified about this transfer and he pays Priya thinking he is settling the debt, the payment will be considered valid, and Amit would not be able to claim the debt from Rohan.

It's important to note that this section does not apply to the transfer of certain insurance policies, as mentioned in the exception.