Section 41 - Transfer of Ostensible Owner

Section 41 of the Transfer of Property Act, 1882 deals with the transfer of property to someone who
appears to be the owner. It states that when a person acts with the permission, whether expressed or
implied, of someone who appears to be the owner of a particular immovable property, that person is
considered the ‘ostensible owner’ of that property.

In simple words , a person may have possession and enjoyment of the property and may also have his
name entered in the official records , but even then , he may not be the real owner of that property.

If a person purchases a property in the name of another person. It is called a Benami transaction, and the
person in whose name the property is purchased is called Benamidar. So, a Benamidar is an ostensible
owner. The law relating to ostensible owners as given in S.41 of the Act is subject to the provisions of the
Benami Transaction (Prohibition of the Right to Recover Property ) Act , 1988 & S.2 of the Act defines
Benami transactions. The Benami Transaction Act is not retrospective .
Illustratration - A buys a house in the name of his sister-in-law Mrs. B. Payment has been made by A and
he and his family start to live in that house. Even if B is a rich lady, the transaction is Benami.

Nature and Scope of the Act

1.​ The Benami Transaction Act , 1988 is not of retrospective operation -
Mithesh Kumari v. Prem Bihari Khare -
In this case it was held that this act has retrospective effect and is a declaratory enactment . The
person with the title is a good owner and prohibits the right to recovery . This case was overruled
by R . Rajagopal Reddy V . P Chandrashekaran concluded that the act is not retrospective .

2.​ This act is not declaratory in nature rather it is prohibitory .

3.​ All Benami transactions entered after the commencement of this act will be punishable subject to
exceptions
4.​ No one is allowed plea under S.41 w.r.t benami transactions entered after commencement.

Jayadayal Poddar v. Bibi -

The SC held that whether a person is an ostensible owner , is a subjective question to be decided based
on the facts and circumstances.
1)​ Source of the purchase money
2)​ Nature of possession after purchase
3)​ Motive to give benami colour
4)​ Relationship between the parties
5)​ Conduct of parties dealing with the property
6)​ Custody of the title-deeds.
Exceptions - S.4(3)
The provisions of the Benami Act do not apply to
●​ Coparcener of Hindu undivided family
●​ A trustee
●​ A person standing in fiduciary capacity

Property in the name of Wife and Unmarried Daughter - S. 3(2)

There is no prohibition and no punishment if the property is purchased in the name of the wife or
unmarried daughter for their benefit - Nand Kishore Mehra v Sushila Mehta

Essentials of Section 41

To apply Section 41, certain conditions must be met. Here are the necessary prerequisites:
●​ The person transferring the property must be the ostensible owner.
●​ The actual owner’s consent, either expressed or implied, is required. - The transfer of the property
must be made by an ostensible owner with express or implied consent of the real owner and the
consent must be free consent. If the owner is minor he is incapable of giving any consent .

Ramcoomar Koondoo v. Macqueen -

In this case, the plaintiff inherited the property under dispute, by a will. She came to know that
someone else had already purchased this property in her name and sold it to a third party, with a
false misconception that he had the title over it. The whole transaction was a ‘Benami’ transaction
but was not known to anyone except the person who sold the property. The plaintiff sued the third
party for recovery of the possession of the land, but the court held that : The principle is simple: If
someone allows another person to act as the owner of a property, and a third person buys it
believing the apparent owner is the real one, the person who allowed this won't be able to claim
the property back unless they can prove that the buyer knew about the true ownership or should
have investigated and found it. In other words, if you let someone pretend to be the owner, and
someone else buys the property in good faith, you can't reclaim it without solid evidence of the
buyer's knowledge or negligence in discovering the true owner. Consent plays a huge a role
It was thereby held that the plaintiff could not take back the property form the third party and in the
eyes of the law, the transfer was a legitimate transfer, which is what section 41 essentially states.

●​ The transfer is for consideration - This section is applicable only where the transfer by ostensible
owner is with consideration. It does not apply to gifts transfers.

●​ Transferee acts in good faith (bonafide intention) - It is necessary that transferee acts in good faith
[Link] has purchased the property in honest belief that the transferor had power to transfer the
property.
 ●​ Reasonable care by the transferee - Transferee must exercise reasonable care in ascertaining the
title and authority of the transferor . A man of ordinary prudence should take while making inquiries
regarding the title of the immovable property.

Nageshar Prasad v. Raja Pateshri -

There was an error in the revenue records regarding the name of the owner. The name written
was of some other person and the real owner had already made a complaint about this error. The
person whose name was in the revenue records subsequently sold it to a third person and the
third person without making proper inquiries took the property and the real owner afterwards
objected to it. The court held that the third party had not taken reasonable care which was required
of him and therefore he will not be protected by this section. The advice of the solicitor will not be
enough to prove that the third party has taken reasonable care in determining the title of the
property.

Section 52 - Transfer of property pending suit relating thereto -

Doctrine of Lis Pendens

The law incorporated in S. 52 is based on the doctrine of Lis pendens . “Lis” means litigation and
“pendens” means pending. So, it means “pending litigation”. It is a very old doctrine and has been
operating in English law. This doctrine is expressed well in the maxim - pendente lite nihil innovature -
during pendency of litigation , nothing new should be introduced .
Under this doctrine , the principle is that during pendency of any suit regarding title of a property , any
new title or interest in respect of that property should not be created. The doctrine basically prohibits the
transfer of property pending litigation.

Lis pendens is based on ‘necessity’ and as a matter of public policy it prevents the parties from disposing
of a disputed property in such a manner as to interfere with court proceedings.

Bellamy v. Sabine -
It is common in both law and equity courts to prevent the transfer of property during pendente lite. This is
because if such transfers were allowed , it would be impossible for a plaintiff to succeed in their case.
The defendant could sell the property before a judgement or decree , forcing the plaintiff to start over ,
potentially facing the same situation. This principle is crucial to ensure a fair and effective legal process.
Govinda Pillai v. Krishnan -

It has been held that “The foundation for the doctrine of lis pendens does not rest upon the notice , actual
or constructive. It rests solely upon necessity - the necessity that neither party to the litigation should
alienate the property in dispute so as to affect his opponents. ”

Essential Conditions for application of S.52

1.​ There is pendency of suit or proceedings - the section applies only where a property is transferred
during pendency of litigation. Pendency of a suit is that period during which the case remains
before court of law for its final disposal. The first step is presentation of plaint - the suit begins
from the date of presentation and the last step is passing of a decree - termination of the case.

2.​ The suit or proceedings must be pending in a court of competent jurisdiction - The suit or
proceeding during which the property is transferred , must be pending before a Court of competent
jurisdiction. Where a suit is pending before a court which has no proper jurisdiction to entertain it ,
the lis pendens cannot apply. For filing a suit , the Civil Procedure Code has prescribed
jurisdictions of the courts . If its not within the jurisdiction then the court cannot pass any decree.

3.​ A right to immovable property is directly and specifically involved in the suit - in the pending suit ,
the right to immovable property must directly and specifically be in question. The litigation should
be regarding the title or interest in an immovable property. Whether it involves any question on the
right in immovable property is based on the nature of the claim .
Following are suits that have been held to involve the right of immovable property -
●​ A suit for partition
●​ Mortgage
●​ Pre-emption
●​ Easement suit
●​ Suit for maintenance by Hindu widow.

4.​ The suit of proceedings must not be collusive - A suit is collusive if it is instituted with a mala-fide
intention. Such a suit is , therefore, fictitious and the very purpose of filing the suit is to get a
judicial decision for some evil design such as defrauding a third party. - Nagubai v. B. Sham Rao

5.​ The property in dispute must be transferred or otherwise dealt with by any party to suit - During the
pendency of the suit , the property must be transferred or otherwise dealt with by any of the parties
to the suit. Transfer includes- sale , exchange , lease etc. During pendency of suit if the disputed
property is sold or given in exchange , is leased or is mortgaged either by plaintiff or defendant ,
 the doctrine of lis pendens shall apply on it and the transfer would be subject to the decision of the
court.

6.​ The transfer must affect the rights of the other party to litigation - The principle of lis pendens is
intended to safeguard the parties to litigation against transfers by their opponents. Any other party
here means the opposite party whose interest may be affected by transfer pendente lite.

Sri Pal Singh v. Naresh -

Where the rights only of the transferor and not of the other party to suit are affected , the principle
of lis pendens does not apply.

Section 53 A - Part performance

Doctrine of Part performance is an equitable doctrine. It is a.k.a “equity of part performance”. Under this
doctrine , if a person has taken possession of an immovable property on the basis of a contract of sale
and has either
●​ performed
●​ Willing to perform his part of contract
He would not be ejected from the property on the ground that the sale was unregistered and legal title
had not been transferred to him.
Illustration - There is a Contract of sale between A(seller) & B(purchaser) for a piece of land. The contract
was written , stamped , attested and duly executed but had not been registered.B performed or was
willing to perform his duty and took possession of the land . A sells the property to C with registration and
C having the legal title dispossesses B from the land and he has no legal protection but equity shall help
him from being disposed off .

This doctrine is based on the maxim - Equity looks on that as done which ought to have been done

Under the English Law , the equity of part performance was developed by the Chancery Courts against
strict provisions of the Statute of Frauds , 1677. Section 4 of this Act provided that all agreements in
respect of transfer of lands must be in writing.
Chancery Courts , which were the Courts of Equity , held that part performance by transferees would
take their cases out of the Statute of Frauds. Thus , equity protected the interests of those transferees
who held lands on the basis of oral contracts and had performed their part of contract.
Maddison v. Alderson -

Maddison, [Link] plaintiff and Alderson, [Link] defendant were the parties to the case .Maddison claimed
that she had an agreement with the deceased to exchange her housekeeping services for the
deceased's promise to leave her his property in his will. Maddison fulfilled her part of the deal, and the
deceased made a will naming her as the beneficiary. However, the will was invalid.
The court, led by Lord Selborne, explained the importance of part performance. It means that the
defendant is held accountable for the fairness of actions related to the oral agreement, not just the
agreement itself. If this fairness isn't considered, it would be unjust.

Before 1929 in India, the application of the English equity principle of part-performance was inconsistent.
In the case of Mohammad Musa v. Aghore Kumar Ganguli, the Privy Council initially applied this
principle. In that case, there was an unregistered written compromise deed (razinama) dividing certain
lands between parties who had taken possession based on it. After many years, the heirs of the parties
challenged the deed's validity due to lack of registration. The Privy Council, following the English
doctrine, upheld the validity of the unregistered razinama, stating that it couldn't be repudiated.

However, later in Ariff v. Jadunath, the Privy Council changed its stance, ruling that the doctrine of
part-performance couldn't override the specific provisions of the Indian Registration Act and Transfer of
Property Act.

Difference

●​ In England - The equity protects the interest of also such a defendant who has taken possession
on the basis of oral agreement.
53- A : the agreement must be written

●​ England - equity gives also a right of action against the evictor

S.53-A : gives no such right.

Thus , the rule of part performance which is administered in England as equity is now a statutory law in
India but with suitable changes. Accordingly - S.53-A is a partial importation into India of the English
doctrine of part performance.

Ingredients

In the case of Kamalabai Laxman Pathak v. Onkar Parsharam Patil, the Bombay High Court has
emphasized the requirements outlined in Section 53-A for the application of the Doctrine of Part
Performance. These requirements are as follows:
 ●​ There must be a written contract for transfer of an immovable property signed by or on behalf of
the transferor - In the case of V.R. Sudhakara Rao v. T.V. Kameswari, it was ruled that the
benefits of Section 53-A cannot be claimed by a person who possesses property based on an oral
agreement of sale. It is not sufficient for the contract to be in writing; it must also be duly executed,
meaning it should be signed by the transferor or someone on their behalf.
●​ There must be consideration - The requirement for the application of Section 53-A is a written
contract that involves the transfer of immovable property in exchange for consideration. The
written contract, which serves as the basis for the possession of the property, must clearly indicate
the intention to transfer the property. If the document is vague or unclear, Section 53-A cannot be
applied. It is crucial that the terms of the written contract can be determined with reasonable
certainty (Hamida v. Humer and Ors.)
●​ The contract should give out the terms of the transfer with reasonable certainty .
●​ The transferee must have taken the possession or continued in possession
●​ Done some act in furtherance of the contract - Taking possession alone is not the only method of
part performance. If the transferee is already in possession of the property, they must perform
some additional act in furtherance of the contract after its execution (Nathulal v. Phoolchand).
●​ Transferee should have performed his part of the deal or is willing to perform it - Section 53-A is
rooted in the principle of equity, which states that one who seeks equity must do equity. Therefore,
for a person to claim the protection of their possession under Section 53-A, their own conduct
must be fair and just. It is an essential requirement for the applicability of this section that the
transferee demonstrates a willingness to fulfil their obligations under the contract (Sardar
Govindrao Mahadik and Anr. vs. Devi Sahai and Ors Govind).

Nature of transferee’s rights under S. 53A

A.​ No title or interest in property - it does not affect ownership rights of the proposed transferor who
remains full owner of the land till they are conveyed by sale deed to the transferee.
B.​ Passive Equity : no right of action - it merely provides a right of defence , it can be used only as a
shield not as a sword .
Prabodh Kumar Das v. Dantamara Tea Co. Ltd -
C.​ Transferee as plaintiff or defendant - It is settled that this section confers on the transfree only the
right to defend his possession when he is being evicted by a person having better title. The
transferee, even if he appears in court as a plaintiff can get a protection of S.53 A provided he
uses it as a shield and not a sword.