The Concept of Assignment of Decree-Debt

8 Pages Posted: 13 Mar 2020

See all articles by Pallavi Gupta

Pallavi Gupta

O.P. Jindal Global Law School

Date Written: February 16, 2020

Abstract

A plaintiff can sue a defendant as per law only if the plaintiff has a cause of action in his favour and against the defendant. The term “cause of action” means bundle of facts which the plaintiff needs to prove in a court of law in order to obtain a relief in his favour and against the defendant.

When a claim is launched by the plaintiff against the defendant, say in the nature of suit for recovery of money, then for the defendant the amount/ sum of money claimed by the plaintiff against him is in the nature of a “contingent liability”. However, for the plaintiff the future receivables which he is likely to get at the conclusion of the litigation ensuing between him and the defendant is in the nature of an “actionable claim”.

That at the conclusion of the litigation when a decree is drawn by the court of law against the defendant and in favour of the plaintiff for whatever sum, the decree so drawn is in the nature of a “debt” due and payable by the defendant to the plaintiff.

Once a decree for a particular sum of money is drawn in favour of the plaintiff and against the defendant, then, the plaintiff is always at liberty to assign the decree obtained by him to even a third party. However, the question that arises for consideration is that: Can an amount payable in terms of a decree of the court by the defendant, be assigned by him to a third party?

That so far as the law of contract as regards assignment of contractual liability is concerned it is settled law that contractual obligations which are personal in nature cannot be assigned, and if the party to the contract otherwise assigns an obligation arising out of the contract to a third party then it results in novation of contract which is possible only if permission of the other party to the contract is sought and is there by obtained.

That when a decree is passed by the court of law for a certain sum of money in favour of the plaintiff and against the defendant then the decree so passed is in the nature of a debt for the defendant which he has to pay to the plaintiff. That the plaintiff in order to enjoy the fruits of the decree which is passed in his favour and against the defendant, has to prefer execution proceedings under Order XXI of the Code of Civil Procedure, 1908. That the general rule is that the executing court cannot go behind the decree and it is concerned with the fructification of the decree.

Keywords: Decree, Pallavi Gupta SRA, Liability, Decree Debt, Actionable Claim

Suggested Citation

Gupta, Pallavi, The Concept of Assignment of Decree-Debt (February 16, 2020). Available at SSRN: https://ssrn.com/abstract=3539018 or http://dx.doi.org/10.2139/ssrn.3539018

Pallavi Gupta (Contact Author)

O.P. Jindal Global Law School ( email )

University Sonipat-Narela Road
Near Jagdishpur Vill
Sonipat, Haryana 131001
India

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