Scribd
Upload
120 views

Transfer by Ostenible Owner 2

The document discusses Section 41 of the Transfer of Property Act regarding transfers of property by an ostensible owner. [1] It examines the requirements for a valid transfer, including consent from the real owner, implied consent through inaction, consideration in the transfer, reasonable care by the transferee in investigating ownership, and good faith on the part of the transferee. [2] It also discusses relevant case laws, including ones establishing that the real owner cannot reclaim a property if they permitted another to appear as the owner, and another where implied consent from the real owner was not present. [3] In conclusion, Section 41 aims to protect innocent third parties in transactions where the transferor was ostensibly but not

Uploaded by

Shashikant Saurav
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
120 views

Transfer by Ostenible Owner 2

The document discusses Section 41 of the Transfer of Property Act regarding transfers of property by an ostensible owner. [1] It examines the requirements for a valid transfer, including consent from the real owner, implied consent through inaction, consideration in the transfer, reasonable care by the transferee in investigating ownership, and good faith on the part of the transferee. [2] It also discusses relevant case laws, including ones establishing that the real owner cannot reclaim a property if they permitted another to appear as the owner, and another where implied consent from the real owner was not present. [3] In conclusion, Section 41 aims to protect innocent third parties in transactions where the transferor was ostensibly but not

Uploaded by

Shashikant Saurav
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 4

Transfer by ostensible owner – section 41 of Transfer of Property

Act

CONSENT FROM THE REAL OWNER

The main aim of this section is to secure the interests of the innocent third party who bought
the property while the real owner was himself at fault for not protesting the transfer. The
necessary requirement, however is that the actual owner should have the capacity to give
consent and that consent should not be obtained from any unlawful act.  In the case of
minors, even if the ostensible owner claims that he has the consent of the minor, no consent
will be granted, as the minors do not have the capacity give the consent.

IMPLIED CONSENT

The implied consent can be derived from the actions of the real owner. The actual owner is
not required to give his express consent or to give his consent in writing. Therefore if another
person is concerned with the property of the real owner, as if the property was his own, and
the real owner is aware of it would be said that the real owner’s approval is tacit.

CONSIDERATION

Consideration is a must if a transfer is made by the ostensible owner. He could not give away
the property as a gift. As also given in the Indian Contract Act, 1872 that consideration is a
required component of any contract and the transfer of property by the beneficial owner is
effected only by contract. It was also provided in S. 4 of the Act, the general meanings laid
down in the Indian Contract Act, 1872 shall be deduced from anything not specifically
specified in that Act.

REASONABLE CARE

Reasonable care can be understood as the care that a reasonable and ordinary man would
have taken. It is his responsibility to check the title of the transferor. In the case of Mathura v.
Ambika, where the real owner had sold the property to another individual and had declared it
before the sale by the ostensible owner could have been registered, it was held that the
transfer by the real owner would have been valid as it had a greater ownership of the property
than the ostensible owner and the rights of a third person who had bought the property from
the ostensible owner.

PROPER INQUIRY

As an individual is expected to make fair enquiries, it is often difficult to decide what the
proper enquiry would be. The courts in India have held that this is arbitrary, that it will rely
on the facts and circumstances of each case and that it may also be the case that what
amounts to a proper investigation in one case may not be considered a proper investigation in
another case with entirely different facts.

If the transfer is made by Mahmomedans, the purchaser is required to inquire whether there is
a female heir also. In certain situations, it is the case that only males move the property
without the permission of the females and this would not be a valid transfer because they still
have a stake in the property and so the third party needs to ask about certain things. The
ultimate test is that the “transferee” should prove that he behaved as a responsible
businessman and with ordinary prudence.

GOOD FAITH

Good faith basically means that the transferee should have sincerely assumed that the
ostensible owner is the real owner after all the correct enquiries made by him. But if after
careful enquiries, the transferee is informed that the person selling the property to him is not
the actual owner, but only the ostensible owner, the transferee cannot ignore the true facts.
This is because a person cannot take advantage of his own negligence and then claim the
immunity of that act. The interests of the real owner must also be protected against such
individuals.

CASE LAWS

Ramcoomar Koondoo V.  John and Maria McQueen Case:


In this case the plaintiff, who had inherited the property by way of a testament, came to
realise that someone else had already bought the property in his name and then sold the
property to a third party, by making him think that he had a good title to the property. The
entire transaction was a ‘benami’ transaction, but no one was identified except the individual
who sold the property. The plaintiff sued the third party to reclaim the ownership of the land,
but the Committee ruled that:

“It is the concept of natural equity, which must be universally applicable, that if one man
permits another to hold himself to be the owner of the estate, and a third person purchases it
for value from the apparent owner in the belief that he is the owner of the estate, the person
who thus permits the other to hold himself to our own shall not be permitted to regain his
hidden title, unless he is able to overthrow that of the purchaser by demonstrating, either that
he had a clear notice, or anything which amounts to a constructive notice, of the true title, or
that there were circumstances which should have led him to an investigation which if brought
to justice, would have led to the discovery of it.”

It was held that the plaintiff could not take back the property of a third party and that the sale
was a lawful transfer in the eyes of the law. The text used in this case can be found in the S.
41 of the Act dealing with the ostensible owner.

Shafiquallah v. Samiulah:

The owner of the property died, and then his ownership of the property was with his
illegitimate sons who were not entitled to the legal title of the property. The lawful heirs of
the owner brought an action against the illegitimate sons to reclaim the land. However the
illegitimate sons sold the property to a third party, pretending to be ostensible owners. The
court held that the illegitimate sons did not have the consent of the actual owner, whether
express or implied, to be ostensible owners of his property. Hence section 41 cannot be
invoked.

CONCLUSION

Section 41 of the Act preserves the interests of the innocent third party involved in the
transaction. This section sets out the estoppel law against the actual owner if there is a fault
attached to it. And the agreement will not be held null and void on the basis that the
transferor was not empowered to do so. The true nature of the transaction is determined by
the intention of the individual who contributed to the purchase of the Land. The purpose was
decided on the basis of the relationship between the parties, the reason for the transaction, the
custody of the title deeds, the payment of the factors and the actual ownership of the Property
in dispute.

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy