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A owes money to B, who transfers the debt to C. A is not a party to the transfer. When B demands…

Under the proviso to section 130(1) of the Transfer of Property Act, 1882, a debtor’s dealings with the original creditor remain valid against the transferee when the debtor…

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A owes money to B, who transfers the debt to C. A is not a party to the transfer. When B demands payment, A pays B without having received express notice of the transfer under section 131 of the Transfer of Property Act, 1882. Can C recover the debt from A?

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Answer and explanation

Correct answer B

Under the proviso to section 130(1) of the Transfer of Property Act, 1882, a debtor’s dealings with the original creditor remain valid against the transferee when the debtor was not a party to the transfer and received no express notice under section 131. A’s payment to B is therefore valid against C, as illustration (i) confirms. C cannot recover that debt from A.

Option feedback

Option A

Incorrect. Under the Proviso to Section 130(1) and Illustration (i) to Section 130 TPA, where the debtor A pays the original creditor B without notice of the assignment to C, the payment is valid against C and C cannot sue A for the debt.

Option B

Correct. The proviso to section 130(1) protects A’s payment to B. C therefore cannot recover the same debt from A.

Option C

Incorrect. The payment is valid against C under the proviso to section 130(1), so C cannot recover the same debt from A.

Option D

Incorrect. Because the payment is valid and C cannot sue A for the debt under Illustration (i) to Section 130 TPA, this option is incorrect.

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