7.

Rules Regarding Transfer of property by a person other than the owner

7.1 Transfer by Ostensible owner (s. 41)

7.2 Transfer by unauthorised person / Doctrine of Estoppel (s. 43)

7.3 Transfers by Co-Owner

7.4 Joint Transfer for Consideration

7.5 Transfers by Co-owners of Share in Common Property

7.6 Doctrine of Priority of Rights (S. 48)

7.1 Transfer by Ostensible owner (s. 41)

Basic Concept:

What is an Ostensible Owner?

An ostensible owner is a person who is not the real owner but is authorised by the real owner to appear to
the public as the owner.

Example situations:

 Property stands in someone‟s name in official records.

 Real owner allows another to manage and represent himself as owner.

Scenario:

A is the real owner of the land. He allows his brother B to:

 Have his name recorded in the land records,

 Collect rent,

 Represent himself publicly as the owner.

C wants to purchase the land. C checks the records, verifies documents, and pays market value in good
faith. Later, A claims that B had no authority to sell

Legal Result:

Under Section 41:

 Since A gave implied consent to B appearing as owner,

 And C acted in good faith and with reasonable care,

� the sale is valid.
� A cannot recover the property from

Example:

➢ So, the following persons who hold possession of property cannot be the ostensible owner:

✓ Manager

✓ Agent

✓ Guardian

✓ Any other fiduciary character

Section 41 Transfer by Ostensible Owner

➢ Transfer by an „ostensible owner” is binding on the “real owner”, if the transferee can prove the
following:

1. That the transferor is an ostensible owner

2. That the transferor is the ostensible owner by the consent express or implied, of the real owner.

3. That the transfer is for consideration.

4. That the transferor has acted in good faith and has made reasonable enquiries to ascertain that the
transferor had power to transfer.
➢ Note:

✓ S.41 is an exception to the general rule that „a person cannot confer a better title than he has‟.

For protection under this section, the following conditions must be satisfied:

1. �The transferor is the ostensible owner (appears to be the owner).

2. � Such appearance is with the consent (express or implied) of the real owner.

3. �The transfer is for consideration (not a gift).

4. �The transferee acted in good faith.

5. �The transferee took reasonable care to verify authority.

If all of these exist, the transfer is valid and binding on the real owner.

Explanation from the case Law:

This principle was explained by the Privy Council in Lakshman v. Kali Charan.

A held out that his wife, W, was the owner of an immovable property called K, as she had purchased it
from her stridhan. After A‟s death, W sold property K to D, who bona fide purchased it for value. A‟s
son, S, sued D to recover the property. In this case, the court held that S could not recover the property.

The innocent purchaser was protected

The doctrine of the ostensible owner requires the following conditions:

a) The transferor must be the ostensible owner of the property (i.e., a benamidar).
b) He must hold the property with the express or implied consent of the real owner.
c) The transferee must have paid consideration and acted with reasonable care and in good faith.

In such a case, the real owner cannot set aside the transfer on the ground that it is voidable.

The general rule is that no person can pass a better title than he himself possesses. Section 41, which deals
with the ostensible owner, is an exception to this rule, provided all the above conditions are fulfilled.

Example: A sent money to B and purchased an immovable property in B‟s name. B was managing the
property but later sold it to C. Can A recover it from C? A cannot recover the property if C acted in good
faith and purchased it for valuable consideration.

In the landmark case Shafiquallah v. Samiulah, after the owner‟s death, the property was in the
possession of his illegitimate sons, who were legally ineligible to hold the property. The true heir filed a
suit claiming his inheritance rights. However, the possessors retained possession and sold it to a third
party, asserting that they were ostensible owners. Nevertheless, the current legal position does not invoke
Section 41, as the possession was neither with the express nor implied consent of the legitimate owner.
Moreover, consent must not be understood to include an intent to deceive the transferee on the part of the
real owner, nor is there a need to prove such intent.
7.2 Transfer by unauthorized person / Doctrine of Estoppel (s. 43)

Feeding the Estoppel:

A, a Hindu who had separated from his father B, sold three pieces of land—X, Y, and Z—to C. Of these,
land Z did not belong to A; it had been retained by B under a partition. Subsequently, B died, and A
inherited land Z as B‟s heir. C, the purchaser, may require A to deliver land Z to him. This doctrine is
known as “feeding the estoppel.” The principle was laid down in Smith v. Osborne.

Essential Conditions

a) The transferor must have made a fraudulent or erroneous representation.

b) The transferee must have acted upon that representation.
c) The transfer must not be one that is forbidden by law.
d) After the transfer, but while the contract is still subsisting, the transferor must have acquired an interest
(or title) in the property.

In such circumstances, the transferee may take advantage of the subsequent acquisition of interest by the
transferor and claim that interest.

This section does not apply against a bona fide transferee for value without notice.
Explanation with Cases

1. Fraudulent or Erroneous Representation

S sold the equity of redemption of property belonging to his brother B. B had been unheard of for several
years. S represented that the property was ancestral and that he was the owner. Later, B died, leaving S as
the sole heir. The purchaser, P, sued S. It was held that P was entitled to the benefit under the doctrine of
feeding the estoppel (Sunderlal v. Ghisa).

The essential condition is that the transferor must have made a fraudulent or erroneous representation, and
the transferee must have acted upon that representation. If the transferee knew the truth or the real
position, this section does not apply.

For example, M, a mother, sold the immovable property of her infant son, representing herself as the
“mother and guardian.” The son later died, and M inherited the property. When the transferee sued, it was
held that the transferee knew the true position; therefore, Section 43 was not applicable.
Leading Case

The leading case is Jumma Masjid v. Deviah. In this case, the Supreme Court held that when A
represented himself as the owner (though he had only a chance of succession) and sold the property to T,
he made a false representation. If A subsequently acquired the property, T would be entitled to it under
the doctrine of feeding the estoppel by grant.
 7.3 Transfer by Co-Owner

Section 44 Transfer by One Co-owner

Co-ownership Situation: Applicable when two or more co-owners jointly own immovable
property.

Legal Competence: If one co-owner is legally competent, he can transfer his share or any
interest in the property.

Rights Acquired by Transferee: The transferee acquires the transferor's rights to:

Joint possession with other co-owners.

Common or part enjoyment of the property.

Enforcement of the partition of the property.

Subject to Conditions and Liabilities: The transferee's rights are subject to the conditions and
liabilities affecting the transferred share or interest at the time of the transfer.

Exception for Dwelling-house in Undivided Family:

If the transferred share is a part of a dwelling-house in an undivided family:

If the transferee is not a member of the family, he is not entitled to joint possession or common
enjoyment of the house.
 7.4 Joint Transfer for Consideration

Section 45 Joint Transfer for Consideration

Joint Transfer Scenario:

Involves the transfer of immovable property for consideration to two or more persons.

Common Fund Scenario: If the consideration is paid out of a fund owned in common by the
transferees:

In the absence of a contrary contract, each transferee is entitled to interests in the property
identical to their respective interests in the common fund.

Separate Funds Scenario: If the consideration is paid from separate funds owned by each
transferee:

In the absence of a contrary contract, each transferee is entitled to interests in the property
proportionate to the shares of consideration they individually advanced.

Presumption in the Absence of Evidence: If there is no evidence regarding the interests in the
common fund or the shares of consideration advanced by each transferee:

It is presumed that the transferees are equally interested in the property.

 7.5 Transfer by Co-owners of Share in Common Property

Section 47 Transfer by Co-owners of Share in Common Property

Co-owners' Scenario: Involves several co-owners of immovable property transferring a share

without specifying from which co-owner's share the transfer is made.

Equal Share Scenario: If the co-owners' shares are equal, the transfer takes effect equally for
each co-owner.

Unequal Share Scenario: If the co-owners' shares are unequal, the transfer takes effect
proportionately to each co-owner's share.

Illustration:

A owns an eight-anna share, while B and C each own a four-anna share in mauza Ulipur. A, B,
and C transfer a two-anna share to D without specifying the source of the transfer. To give effect to the
transfer, one anna share is taken from A, and half an anna share is taken from each of B and C

7.6 Doctrine of Priority of Rights (S. 48)

Priority of Rights Created by Transfer

Rules of Priority

If a property is transferred to two/several people, then the prior transferee gets priority over the later
transferee Provided that conditions are fulfilled

To apply s.48, the following conditions must be fulfilled

1. Prior transferee‟s transfer must be valid and legal

2. If registration of a document is compulsory, then it must be registered.

3. If every transferee has registered their deed, then the person to whom the document of transfer was
executed first will become the prior transferee.

Reference: S.49 of Registration Act: If a document is registered, then it is considered that such a
document has been effective from the date of execution, not from the date of registration.