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

Section 136 - Incapacity of Officers Connected with Courts of Justice

Section 136 of the Transfer of Property Act, 1882 restricts judges, legal practitioners and officers connected with courts from trading in actionable claims. It also prevents courts from enforcing claims dealt with in contravention of the section at their instance or through those claiming under them.

Complete text of Section 136

136. Incapacity of officers connected with Courts of Justice. - No Judge, legal practitioner, or officer connected with any Court of Justice shall buy or traffic in, or stipulate for, or agree to receive, any share of, or interest in, any actionable claim, and no Court of Justice shall enforce, at his instance, or at the instance of any person claiming by or through him, any actionable claim so dealt with by him as aforesaid.

Meaning and object of Section 136

The restriction is intended to protect the administration of justice by preventing those connected with courts from obtaining a personal financial stake in claims that may become the subject of litigation. It addresses dealings in actionable claims, rather than all dealings in property.

What is an actionable claim?

Under Section 3 of the Transfer of Property Act, an actionable claim includes a claim to an unsecured debt, other than a debt secured by mortgage of immovable property or by hypothecation or pledge of movable property, and a claim to a beneficial interest in movable property not in the claimant's actual or constructive possession, where civil courts recognise grounds for relief. The debt or interest may be existent, accruing, conditional or contingent. Classification depends on the nature of the right involved.

Persons and dealings covered

Judges: A judge may not buy, traffic in, or contract for a share or interest in an actionable claim.
Legal practitioners: The same statutory restriction applies to legal practitioners.
Officers connected with a Court of Justice: The provision also covers court-connected officers.
Prohibited arrangements: Both an actual acquisition and an agreement or stipulation to receive a share of or interest in the claim are addressed.

Effect on enforcement

The section expressly bars enforcement by any Court of Justice at the instance of the person who dealt with the actionable claim in the prohibited manner or at the instance of someone claiming by or through that person. It is therefore important to examine both the transaction and the source through which an applicant claims rights.

Practical illustration

Suppose an advocate purchases an unsecured disputed debt from its creditor with the intention of recovering it for personal profit. Such a transaction raises the prohibition in Section 136; the advocate cannot seek court enforcement of the claim so acquired. Assigning the same claim onward to another person claiming through the advocate does not remove the statutory bar described in the section.

Distinction from ordinary representation

Section 136 concerns a prohibited share or interest in an actionable claim. Acting as legal counsel for a client who independently owns a claim is not, merely by itself, the same as purchasing or trafficking in that claim. Other professional conduct rules and applicable law may separately govern fee arrangements and conflicts of interest.

Section 130 - Transfer of actionable claim, including the written instrument of assignment.
Section 131 - Written notice of assignment.
Section 132 - Liabilities and equities binding a transferee.
Section 137 - Saving of negotiable instruments, etc.
Transfer of Property Act, 1882 - Overview.

Note: Whether a particular claim or transaction is covered by Section 136 requires consideration of the statutory definition, the person's role and the circumstances of acquisition.

Frequently asked questions

Who is restricted under Section 136?

Judges, legal practitioners and officers connected with any Court of Justice are covered by the express prohibition.

What transactions are prohibited?

Buying or trafficking in an actionable claim, or stipulating for or agreeing to receive any share of or interest in an actionable claim.

Can a court enforce a prohibited claim?

Section 136 directs that no Court of Justice shall enforce such a claim at the instance of the prohibited person or a person claiming by or through that person.

Does the provision prohibit every transaction involving a lawyer?

The provision specifically concerns buying, trafficking in, or acquiring a share or interest in actionable claims. Its application depends on the actual transaction and status of the person involved.

Official statutory sources

Refer to the India Code portal for the Transfer of Property Act, 1882 and the Legislative Department for legislative publications and amendments.