Report No. 70
12.21. Object.-
The insertion of clause (dd) by the Amending Act was intended to settle the conflict of views amongst certain previous decisions of the Calcutta,1 Bombay2 and Madras3 High Courts. It is sometimes stated that the amendment is in accordance with the policy which discourages all transfers of an expectancy.4 This may be so, but there appears to be a broader ground of public policy. A number of considerations support the prohibition against transfer of the right to future maintenance, namely, sustenance of the person entitled, personal nature of the right, and the aspect of future interest. The principal one, however, is the aspect of sustenance.
1. Asad All v. Hyder Ali, 1911 ILR 38 Cal 13 (20).
2. Diwati v. Appall, ILR 10 Born 342 (345) (doubt expressed).
3. Ranee Annapurna v. Swaminath, ILR 34 Mad 7, cited in Raja of Kalhati v. Venketappa, AIR 1928 Mad 713 (FB) (case before amendment).
4. Gour.
12.22. Sum accrued.-
The prohibition against the assignment of the right to future maintenance does not seem to disallow the transfer of a sum of money which has accrued due. The sum accrued due is a debt; there is nothing personal about it and the very fact that the amount has been allowed to fall in arrears would seem to indicate that the purpose of sustenance would not be defeated. by its assignment. That arrears of maintenance can be attached or assigned like any other debt, was the position established long before the Act.1 This position was not intended to be disturbed.
It may be noted that in the Civil Procedure Code, exemption from attachment is conferred in respect of a right to future maintenance by section 60(n). Under that Code, it has been held that it does not apply to arrears of maintenance.2 It has also been held that a right to future maintenance which is heritable and not personal is not exempt from attachment.3 Moreover, anything which is in excess of maintenance, pure and simple, is not exempt from attachment.4 As early as 1900, it was held that arrears of maintenance could be attached.5
1. Kasheeshuree v. Greesh Chandra, (1866) 6 WR Misc 65 (Cal), cited in Mulla, (1973), p. 68, footnote (p).
2. Palikandi v. Krishnan, ILR 50 Mad 302.
3. Ashfac v. Nazir, AIR 1942 Oudh 410.
4. Chittory v. Themana, AIR 1954 Mad 946 (947) (Mack J.).
5. Haridas v. Baroda, (1900) 4 CWN 87.
12.23. It was held in a Madras case of 19191 that the right of a member of Malabar Tarwad to maintenance is property, and can be assigned. The right to receive future maintenance cannot be alienated-though the position might be different in equity in England. An annuity by way of maintenance is transferable.2
1. AIR 1919 Mad 538.
2. AIR 1917 Mad 79.
12.24. No change.- No change in clause (dd) is required as a result of the above discussion.
12.25. Section 6(e).-
Section 6(e) provides that a mere right to sue cannot be transferred. Though this is a rule of substantive law, it has an intimate connection with certain aspects of procedure. Maine, in his Early Law & Custom,1 wrote as follows:-
"So great is the ascendancy of the Law of Actions in the infancy of Courts of Justice, that substantive law has at first the look of being gradually secreted in the interstices of procedure; and the early lawyer can only see the law through the envelope of its technical forms".
The evolution of the law prohibiting the transfer of a mere right to sue is an instance in point.
1. Maine Early Law and Custom, (1901), p. 389.
12.26. Comparison.-
Under the Code of Civil Procedure, 1908, section 60, "a mere sight to sue for damages" cannot be attached. In section 6(e) of the Transfer of Property Act, the wording was "a mere right to sue for compensation for a fraud or for harm illegally caused". The amendment of 1900 omitted the restrictive words. The present wording is very brief-a mere right to sue.
12.27. Simplicity deceptive.-
The simplicity of this brief and cryptic provision is deceptive. The word "mere" is crucial in the section. The moment this word is overlooked, difficulty arises. It never was the law, and it is not the law, that the transfer of a right to sue is totally prohibited. What the law desired to discourage was trafficking in litigation. The law of maintenance and champerty are branches of law the discussion of which is now considered of not much importance.
But these are the topics which form the basis of the prohibition against transfer of a mere right to sue. If a person indulges in intermeddling with litigation in which he has no legitimate interest, he ought to be discouraged. If a mere right to sue is transferred to such a person, it is not a permissible transfer. It is an abuse of the right of transfer and would lead to an abuse of the right to sue. Common law does not accept in its entirety the doctrine of abuse of rights familiar to continental jurists. But, to the limited extent indicated above, it takes note of the fact that even a legitimate right could be so dealt with as to lead to abuse.
12.28. Difficulty.-
The thesis of the law, taken as an abstract proposition, may be assumed to be productive of no serious difficulty. But difficulty arises when the legislature seeks to give concrete shape to it, and when, after such concrete shape is given to it, courts have to apply the legislative mandate in concrete cases.
At the stage of legislation, the problem is how to distinguish between legitimate and illegitimate dealings with rights. If the transfer of a right of suit is totally disallowed, one would be overhitting the mark, because certain kinds of property are of such a nature that their protection and enjoyment might require action on the part of a third person (other than the transferor and the transferee). A thing in possession can, within certain limits, be defended without going to a court of law. Things not in possession cannot, however, be so defended. This distinction between two kinds of property, and the special nature of things not in possession, gave rise to the evolution of special rules.
12.29. Importance.-
It is in dealing with the transfer of actionable claims that the question often assumes the greatest prominence. An actionable claim is not a corporeal thing which may change hands by de livery, but represents a right to performance of a duty by another person. Assignment of a chose in action ready amounts to substituting a new duty to the assignee in place of the duty originally incurred.1 Originally, choses in action were, in England, not transferable and their assignability became recognised only by slow degrees.
Before such recognition, the same result was achieved by novation of the contract by a triangular agreement to which the debtor was a party, or by means of the power of attorney which enabled, the assignee to sue in the name of the assignor for his own purpose. These, however, were indirect modes, and were sometimes practically inconvenient, and also involved risk. Direct transfer was recognised by equity in the seventeenth century.1
1. Ames in 3 Harvard Law Review 337, 339.
12.30. It is well-knownth at with the growth of commerce, changes in the law regarding property and transfer of property become desirable. The emergence of rules permitting the transfer of actionable claims is really an instance of the response of the law to changing economic conditions. The origin of the prohibition against transfer was directed against the multiplying of contentious suit-briefly described as maintenance. As commerce increased, the rigour of this original rule had to be modified.
Equity first gave its aid, and later, statute law gave effect to the doctrines of equity. It now remains for the courts to apply to the law in its true spirit so as to discourage, on the one hand, gambling in litigation or transactions intended to injure or oppress third persons by encouraging unrighteous suits, at the same time fostering the growth of commerce by recognising those transactions which are entered into in the process of modernisation of commercial activities.
