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[Landmark Judgement] Kapilaben V. Ashok Kumar Jayantilal Sheth (2020) 

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Landmark Judgment Law Insider (1)

Published on: February 7, 2024 at 16:08 IST

Court: Supreme Court of India

Citation: Kapilaben V. Ashok Kumar Jayantilal Sheth (2020) 

Honourable Supreme Court of India has held that assignment of a contract might result in transfer of either rights or obligations thereunder however, the transfer of obligations is not possible without the consent of the other party. The transfer of right is permissible except in cases where the contract is of personal nature. It is held that a contract which is such that the promisor must perform it in person viz. involving personal considerations or personal skill or qualifications (such as his credit), are by their nature not assignable. The benefit of contract is assignable in “cases where it can make no difference to the person on whom the obligation lies to which of two persons he is to discharge it”. It is held that contractual rights for the payment of money or to building work, for e.g. do not involve personal considerations.

24. It is well-settled that the term “representative-in-interest” includes the assignee of a contractual interest. Though the provisions of the Contract Act do not particularly deal with the assignability of contracts, this Court has opined time and again that a party to a contract cannot assign their obligations/liabilities without the consent of the other party.

27. Even in a case of assignment of rights simpliciter, such assignment would necessarily require the consent of the other party to the contract if it is of a “personal nature”. This is elucidated by the learned authors Pollock and Mulla in their commentary on The Indian Contract and Specific Relief Acts (R. Yashod Vardhan, and Chitra Narayan, Eds., 15th Edn., Vol. I) at p. 730.

Drafted By Abhijit Mishra