Narayanan v. Lakshmi Ammal
Rule established
Transferee of actionable claim takes subject to all defenses available against the transferor, including prior payment
Facts
- A creditor assigned a debt to a third party
- The debtor had already made partial payments to the original creditor before the assignment
- The assignee demanded the full original amount from the debtor
Issue
- Whether the assignee (transferee) of an actionable claim takes it subject to defenses that the debtor could have raised against the original creditor (transferor).
Held
- Yes. Under S.132, the assignee gets no better right than the assignor had. All defenses available against the original creditor (prior payment, set-off, illegality, limitation) can be raised against the assignee. The assignee can only recover what is actually due.
Ratio Decidendi
S.132 enacts the principle "nemo dat quod non habet" (no one can give what they do not have) for actionable claims. The transferor's right was already diminished by the partial payment; the transferee receives only this diminished right. This protects debtors from having to pay twice.
How to use it in an exam
Use in problems where the debtor has defenses against the original creditor. Key line: "Assignee takes subject to all equities; debtor's defense of prior payment defeats the assignee's claim for the paid amount."
Source
Source: Mulla TPA 13th ed.
This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.