Transfer of Property Act, 1882 | Chapter VIII - Transfers of Actionable Claims

Section 135 - Assignment of Rights under a Fire Insurance Policy

Section 135 of the Transfer of Property Act, 1882, governs the assignment of rights under a policy of insurance against fire. Where the specified conditions are met, the assignee obtains the right to sue on the fire insurance policy as though the insurance contract had originally been made with that assignee.

Section 135 - Assignment of rights under policy of insurance against fire (full statutory text)

135. Every assignee by endorsement or other writing, of a policy of insurance against fire, in whom the property in the subject insured shall be absolutely vested at the date of the assignment, shall have transferred and vested in him all rights of suit as if the contract contained in the policy had been made with himself.

Meaning of Section 135

This provision deals with the rights to enforce a fire insurance policy when the policy is assigned to a person who also holds the entire ownership interest in the insured subject matter at the time of assignment. The assignee may then sue in the assignee's own name on the policy, subject to the terms and applicable legal requirements of the insurance contract.

Conditions for assignment under Section 135

1. Assignment by endorsement or other writing

The policy must be assigned by endorsement or another writing. An endorsement is a written statement on or associated with a policy recording the assignment. Section 135 does not describe a purely oral assignment as sufficient for this statutory effect.

2. Policy of insurance against fire

The provision specifically applies to a fire insurance policy. It should not automatically be extended to marine insurance, life insurance or every other insurance contract. Other applicable insurance laws and contractual conditions may govern those transactions.

3. Absolute vesting of the insured property

At the date of the assignment, ownership of the property that is the subject of insurance must be absolutely vested in the assignee. Merely assigning a policy without satisfying this ownership condition does not, by itself, attract the statutory consequence stated in Section 135.

4. Transfer of rights of suit

Once the statutory conditions are satisfied, the assignee acquires all rights of suit under the policy as though the insurance contract were made directly with the assignee. This concerns the ability to enforce rights; it does not eliminate applicable policy terms, exclusions, disclosure requirements or other defences available under law.

Practical illustration

A owns a warehouse insured against fire and sells the warehouse absolutely to B. At the time the ownership vests in B, A also assigns the relevant fire insurance policy to B by written endorsement. If the statutory and applicable policy conditions are met, Section 135 enables B to enforce the rights of suit under that policy in B's own name.

Contrast: If A endorses the fire policy to C but the insured warehouse remains owned by A, the condition that the insured property be absolutely vested in C at the date of assignment is not satisfied. C cannot rely on Section 135 alone to claim its statutory benefit.

Section 130 deals generally with transfer of actionable claims and contains an express exception concerning transfers of marine or fire insurance policies. Section 131 provides for notice of transfer of actionable claims, while Section 132 addresses liabilities and equities affecting a transferee. Section 135 specifically addresses the transfer of rights of suit under fire insurance policies and must be read in its proper statutory context.

Frequently asked questions

Is a written assignment required?

Yes. Section 135 refers expressly to assignment by endorsement or other writing.

Can a person who does not own the insured property use Section 135?

The section requires the property in the subject insured to be absolutely vested in the assignee at the date of assignment. Without that condition, the particular statutory right under Section 135 does not follow.

Does Section 135 automatically guarantee an insurance payout?

No. It concerns transfer of rights of suit. Whether a particular claim is payable depends on the policy, the insured event, the applicable law and the relevant facts.

Official legal resources

For the official statutory text and applicable amendments, consult India Code (Government of India) for the Transfer of Property Act, 1882 and relevant insurance legislation. See also the Transfer of Property Act overview.