Debt - Definition - Law Dictionary Home Dictionary Definition debt

Definition :

Debt [fr. debitum, Lat.], a sum of money due from one person to another. An action of debt lay where a person claimed the recovery of a liquidated or certain sum of money affirmed to be due to him; and it was generally founded on some contract alleged to have taken place between the parties, or on some matter of fact from which the law would imply a contract between them. This was debt in the debet, which was the principal and only common form. There is another species mentioned in the books, called debt in the detinet, which lay for the specific recovery of goods, under a contract to deliver them. An action of debt as a technical term is now obsolete. See PLEADINGS. The order of the payment of debts and expenses out of legal assets in an ordinary administration action in the Chancery Division of the High Court is as follows:-

1. Funeral expenses, which in the case of an insolvent estate must be strictly reasonable and necessary only, the executor or administrator being personally liable for any excessive expenditure.

What is a strictly reasonable and necessary sum varies with the circumstances of each particular estate, and the price of the requisite Articles at the particular place.

2. Testamentary expenses about the probate of the Will, or the letters of administration in intestacy; debts due from the estate after death, such as rates and taxes, and warehousing charges for protecting furniture, etc.

3. The costs of necessary legal proceedings, including an administration action.

If the estate is insolvent, after providing for funeral, testamentary and administration expenses, the estate is to be administered (whether by personal representatives or by the Court, Re Cockell, 1932 AC 365) according to the rules which may be in force for the time being under the law of bankruptcy with respect to the assets of persons adjudged bankrupt, A.E. Act, 1925, s. 34(1), Part I. of the First Schedule of that Act, and see ss. 30 and 33 of the (English) Bankruptcy Act, 1914, and s. 36, ibid., as to deferred debts. An entailed interest if disposed of by will becomes assets for the payment of debts [(English) Law of Property Act, 1925, s. 176], but not if the entailed estate has not been so disposed of.

Prior to the (English) Administration of Estates Act, 1869 (32 & 33 Vict. c. 46) (popularly known as 'Hinde Palmer's Act'), special contract debts, as by bonds, covenants, and other instruments under seal, took priority over debts by simple contract; but this Act abolished that distinction as to priority.

As to attachment of debts, see that title.

Debts are assignable at law, if the assignment is absolute and in writing, where express written notice of the assignment is given to the debtor, trustee, or other person from whom the assignor would have been entitled to claim such a debt [(English) Law of Property Act, 1925, s. 136, and ASSIGNMENT). See also Administration of Estates Act, 1925, s. 34, which expressly recognizes the right of retainer of a personal representative within the limits therein set out.

It is a chose in action and is heritable and assignable and it is treated as property in India under the Transfer of Property Act which calls it an 'actionable claim', Delhi Cloth and General Mills Ltd. v. Harnam Singh, AIR 1955 SC 590: (1955) 2 SCR 402.

(ii) means an advance in cash or in kind and includes any transaction which is in substance a debt but does not include an advance as aforesaid made on or after the first day of July, 1952 or a debt due to - (i) the Central Government or Government of any State; (ii) a local authority; (iii) a scheduled bank; (iv) a co-operative society; and (v) a waqf, trust or endowment for a charitable or religious purpose only. (vi) a person, where the debt was advanced on his behalf by the Court of Wards to a ward, Raja Ganga Pratap Singh v. Allahabad Bank Ltd., AIR 1958 SC 293: (1958) SCR 1150.

Means any liability (inclusive of interest) which is claimed as due from any person by a bank or a financial institution or by a consortium of banks or financial institutions during the course of any business activity undertaken by the bank or the financial institution or the consortium under any law for the time being in force, in cash or otherwise, whether secured or unsecured, or assigned, or whether payable under a decree or order of any civil court or any arbitration award or otherwise or under a mortgage and subsisting on, and legally recoverable on, the date of the application. [Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993), s. 2 (g)]

Means by liability for an ascertained sum of money and includes a debt payable in kind, but does not include a judgment debt. [Interest Act, 1978 (14 of 1978), s. 2 (c)]

The word 'debt' is used in the order/notice issued under Income-tax Act in the same meaning in which it is used in, s. 60, C.P.C. Ordinarily, 'debt' means money that is owed; an existing obligation to pay certain amount; a sum of money due from one person to another, J. Jermans v. Aliamnal, AIR 1999 SC 3041 (3045): (1999) 7 SCC 382.

Debt includes any liability in respect of any obligation to repay capital sums by way of annuities and any liability under any guarantee, and 'debt charges' shall be construed accordingly. [Constitution of India, Art., 366(8)]

An assignment of the balance which may remain after satisfying a garnishee order is effective and attaches to the balance in the hands of the debtor after payment into court under the order, Yates v. Terry, (1902) 1 KB 527 CA.

Any liability which is alleged and due from any person by a bank during the course of any business activity undertaken by it in cash or otherwise, whether secured or unsecured, or whether payable under a decree or an order of any Civil Court or otherwise, and subsisting on and legelly recoverable on the date of application is debt, Narmadaben R. Ganchi v. Competent Authority, AIR (1997) Guj 75.

Includes funeral, testamentary or administration expenses, RSC, Ord. 44, r. 18(3) (UK) Halsbury's Laws of England (17), para 1474, p. 761.

Means money that is owed; an existing obligation to pay a certain amount: a sum of money due from one person to another, J. Jermons v. Aliammal, (1999) 7 SCC 382.

Is the entries relating to debt of Union and States appear in the Seventh Schedule (Constitution of India), which includes any Liability of Union and State Governments is respect of any obligation to repay capital sums by way of annuities and any liability under any guarantee, Constitution of India, Art. 366(8).

A sum of money due by certain and express agree-ment or contract, A. Dictionary of Law, William C. Anderson, 1889, p. 315

Means liability which is alleged as due from any person by a bank or a financial institution or by a consortium of banks or financial institution, State Bank of Bikaner & Jaipur v. Ballabhdas and Co., (1999) 7 SCC 539.

Means any liability which is alleged as due from any person by a bank during the course of any business activity undertaken by the bank either in cash or otherwise, whether secured or unsecured, whether payable under a decree or order of any court or otherwise and legally recoverable on the date of the application, United Bank of India v. Debts Recovery Tribunal, (1999) 4 SCC 69.