TOPIC- FRAUDULENT PROPERTY TRANSFER BY AN UNAUTHORIZED

PERSON BY THE ESTOPPEL FEEDING DOCTRINE

By – Surima Singh

Abstract

Property is one of the most important aspects of a person's socioeconomic life. The Transfer
of Property Act 1882 was enacted to amend some elements of the legislation relating to the
Transfer of Property by the act of parties to safeguard such rights in an item or land. The act
solely applies to immovable property as specified by the Act's interpretation clause. By
integrating the common law notion of estoppel by deed with the equitable principle, Section
43 of the Transfer of Property Act 1882 provides for the transfer of property by an
unauthorized person who later acquires an interest in the property transferred.
In India, Section 43 of the Transfer of Property Act 1882, which included the concept of
estoppel by deed, established the notion of feeding the grant by estoppel. This clause allows a
transferee to whom a transfer is made based on a fraudulent or erroneous representation to lay
claim to any interest in the property that the transferor may later acquire, as long as he does
not jeopardize the right of any subsequent purchaser for value without notice. This paper also
tries to explain the apparent owner duties defined under Section 41, as well as when an
ostensible owner's act undertaken under a Benami transaction becomes illegal and the transfer
is void. In addition, the paper tries to explain Section 53, which deals with fraudulent
transfers and how they may harm the transferee's interests. The purpose of this paper is to
comprehend the scope of section 43 of the Transfer of Property Act, 1882, to recognize the
position of the transferee in fraudulent and erroneous transfers, and to comprehend the scope
of the doctrine of feeding the grant by estoppel and how it is applied by Indian courts.
 1. Introduction

The purpose of the Transfer of Property Act was to harmonies the laws governing the
transmission of property between living people with the rules governing its devolution, as a
complement to the work done in creating the law of testamentary and intestate succession.
The Act is a contract related to immovable property 1. The principle enshrined in Section 43
of the Transfer of Property Act has been referred to as the Common Law, among other things.
The doctrine of 'feeding the grant by estoppel' is based on the adage 'nemo dat quod
nonhabet,' which states that no one can give to another what he does not have, or as a
doctrine of Equity, which states that 'equity' addresses that which should be done or a
combination of both. Section 43 deals with transfer by an authorized person who fraudulently
or erroneously represents that he is authorized to transfer such immovable property and
professes for consideration at the auction of the transferee and subsequently acquires in the
property transferred.2
It makes no difference whether the transferor makes the representation in good faith or
fraudulently; what matters is whether the transferee has been misled. Section 43 establishes a
doctrine based based on law of estoppel. It simply states that if a person buys a fraudulent or
erroneous representation transfer certain immovable property, claiming himself to be the
owner of such property, such transfer will lose his subsequent interest in the property as
estoppel arises against the transferor for his conduct, and the law requires him to feed that
estoppel by his subsequent acquisition.

Literature Review
The researcher has combed through a variety of sources for this research study. To write this
article, the researcher used both primary and secondary sources. Statutes and court rulings are
the key sources. Textbooks and web articles are examples of secondary sources that have
aided the researcher.

Primary Sources
Statutes
 Transfer of Property Act, 1882

1
Whitely Stokes, op. cit., p 726.
2
Section 43 of Transfer of Property Act 1882.
Secondary Sources

Text Books-
 Avtar Singh: Transfer of Property Act (14th Edition, Eastern Book Company,
2016)

Textbook on The Transfer of Property Act is the most lucid and analytical study of various
sections of the Transfer of Property Act, 1882. The book is a section-wise commentary
explaining the concepts in detail with the help of illustrations and judicial precedents. The
text in the chapters is divided into headings and subheadings which make it easy for readers
to understand and remember. At the end of these chapters, the book has provided short notes,
often asked questions and also some practical problems along with their solutions, with an
object to render an exhaustive coverage of the subject at hand.
In this Sixth edition, the case law has been updated incorporating all important judgments
rendered by the Courts in India since the publication of the last edition. This book is an
essential reference for law students pursuing law courses at different law schools, universities
and institutes, enabling them to understand and gather analytical skills about the subject of
"Transfer of Property".

 Mulla: The Transfer of Property Act (11th Edition, Lexis Nexis, 2012)

Mulla's The Transfer of Property Act is a section-wise commentary on the Transfer of

Property Act, 1882. It retains its original style and authenticity while making revisions in the
substantive content and also additions and deletions wherever required. It contains
appendices that include select allied Acts such as The Hindu Disposition of Property Act,
1916, The Government Grants Act, 1895, Dispositions of Property (Bombay) Validation Act,
1947. This edition incorporates a glossary of non-English terms (with case law references).
The table of cases also carries case citations for the convenience of the reader.

Research Problem
The purpose of this study is to determine the scope of section 43 of the 1882 Transfer of
Property Act. The goal is to examine the doctrine of feeding the grant by estoppel, which
applies when a property is illegally or erroneously transferred by a transferor who does not
have title to the property. The doctrines used in this research work are established principles
followed by Indian courts. The research goes on to discuss the differences between Sections
41 and 43 of the Property Act, as well as how an unauthorised person is bound by the illegal
activity of transferring property to anyone.

Research Question

How do Indian courts apply the doctrine of feeding the gift by estoppel under Section 43 of
the Transfer of Property Act, 1882?

Hypothesis
 Is the idea of estoppel by grant, as expressed in Section 43, analogous to English law
doctrine?
 Under The Property Act 1882, an unauthorised person who illegally transfers property
to receive benefits from the transfer and misleads the transferee into believing they
are the genuine owner is accountable.

Existing Legal Situation

According to Section 43 of the Transfer of Property Act 1882, if a person falsely or

erroneously represents that he is authorised to transfer certain immovable property for
consideration and performs certain acts to transfer such property for consideration, the
transfer will continue to operate in the future. It will apply to any stake in the property that
the transferor may acquire. This will be at the transferee's discretion and can be done at any
moment while the transfer contract is in effect. The rights of a bona fide transferee who was
unaware of the earlier transfer or option are safeguarded under this regulation. This rule
embodies an estoppel rule, which states that a person who makes a representation cannot later
deny it.

Every person who is legally capable of contracting is also legally capable of transferring
property, which can be transferred in whole or in part. He should have the right to the
transferred property or the authority to dispose of it if it is not his own. The property can be
moveable or immovable, current or future, and the right can be absolute or conditional.
Unless a transfer in writing is particularly required by law, such a transfer can be made orally.
Literature Review

The purpose of the Transfer of Property Act was to harmonise the laws governing the
transmission of property between living people with the rules governing its devolution, as a
complement to the work done in creating the law of testamentary and intestate succession.
The goal was to finish the Code of Contract Law in terms of immovable property, as stated
by 'Whitely Stokes.'

Under Section 43 of the Transfer of Property Act, 1882, J. L. Nageswara Rao and J. M. R.
Shah applied the "concept of estoppels" when a person was misled to purchase a property by
an erroneous representation of title by the vendor.
It was highlighted in Jamma Masjid v. Kodimaniadra Devaiah, 1962, that before the
phrase 'fraudulently' was introduced into the clause in 1929, erroneous representation was
considered to include tainted or unspoiled by fraud. After the change, the section will apply
even if the transferor is uninformed that the representation he made was false.
According to J. Agarwala, the correct view is that Section 43 of the Transfer of
Property Act, 1882 does not require that the transferee who can benefit from it be one to
whom not only a fraudulent or erroneous representation about the transferor's authority to
transfer the property is made, but also one who did not know the true factual situation and
had merely acted on behalf of the erroneous or fraudulent representation.
According to Onkur Raoji Hage and Anr. v. Shamrao Shivrao Palhade and Anr., 1996,
the transferee's view under Section 43 does not have to be expressed in specific terms or a
specific format.

Objective
To comprehend the meaning of section 43 of the 1882 Transfer of Property Act
1. Recognize the transferee's position in a fraudulent and erroneous transfer
2. To compare and contrast Sections 41 and 43.
3. To comprehend the scope of the doctrine of feeding the grant by estoppel and how the
Indian Courts use it.

Methodology
The present research paper uses the most recently available published secondary data. To
achieve the objectives, secondary data was used. The secondary data are mainly used from
Government departments for policy information,

 Judgement

 Research report, books, articles

 Newspaper clippings,

 Online sources,

 SCC journals and bare acts.

 DOCTRINE OF FEEDING THE GRANT BY ESTOPPEL

Meaning of Transfer of Property

The definition of Transfer of Property is defined in Section 5 of the 'Transfer of Property Act
1882.' A 'transfer of property is an act in which a live person conveys specific properties to
one or more other living people, unconditionally or conditionally, in the present or in the
future, and 'to transfer property is to do such an act.
According to Sect 7 of the Transfer of Property Act 1882, the person transferring the property
must be competent to contract and entitled to the transferable property, or permitted to
dispose of transferable property that is not his own. The transferor must be an adult who has
reached the age of majority under section 3 of the Indian Majority Act 1875, be of sound
mind, and be free from legal disqualification, which entails legal inability. The Transfer of
Property Act regulates a variety of property transfers, including sales, gifts, exchanges,
mortgages, leases, and the transfer of actionable claims.

Estoppel By Deed
Estoppel by matter in writing is known as estoppel by deed. It is a rule, that a person is not
allowed to deny a statement of fact that he has made in a deed, nor is he allowed to deny the
validity of a property right that one has granted by deed. 3 Deeds are said to be validly
executed by an individual if it is signed by him in the presence of a witness or witnesses who
attest signatures of parties upon such deeds.4 Deeds are constructed in the same way as other
documents where one party wishes to deny the truth of a statement in the deed it may
estoppel from doing so by the application of a rule known as estoppel by deed 5. Estoppel by
deed is based on the principle that when a person has entered into a solemn engagement by a
deed under his hand and seal as to certain facts, he shall not be allowed or permitted to deny
any matter which he has so asserted6. According to Halsbury’s Laws of England,
Where there is a statement of fact in a deed made between parties, an estoppel results, and is
called 'estoppel by deed.7

Also Blackstone in “Commentaries on Law of England” has stated the ‘a party to a deed in
most cases estoppel from controverting any statement therein or to show that it was executed
3
Jonathan Michie, Reader’s Guide to the Social Sciences (Fitzroy Dearborn, Chicago,2001).
4
Stephen Furst & Vivian Ramsey, On Construction of Contract (Sweet & Maxwell, London, 9th Edition,2012).
5
Id., at 89.
6
Parma Nand v. Champa Lal [1956] AIR 225 (All).
7
Halsbury’s Laws of England, “Estoppel” (4th Edition)1052.
with a different intent, or object to which deed itself imports, except indeed, in cases of
duress, fraud or illegality which defences the law admits. 8’ In Methavathy v. Punyakodi, the
Madras High Court attempted to define the doctrine of estoppel by deed as; Where there is a
statement of fact in a deed between parties and verified by their seals, estoppel results and is
called 'estoppel by deed.9
In the above-stated case, the court held that where the defendant has executed the sale deed in
favour of the plaintiff, he will be estopped from contending that the plaintiff is not the owner
of the said land10.

Estoppel By After Acquired Title or Feeding the Grant by Estoppel

Estoppel by deed can apply to a grantor or landlord who did not have a title at the time the
donation was made. When the granter obtains title after the defective grant, the estoppel is
said to have been fed, and the estate by estoppel becomes an estate in interest. As a result, the
grantee receives the actual title as soon as the granter obtains it. The grantor is not required to
execute a new conveyance. When the estoppel is activated, the grantee's title becomes
operative, and if there is an express recital of title, the granter is estopped from denying that
he had the legal title asserted. Under the Common Law, a man who sells property which does
not belong to him, and afterwards acquires title as enables him either wholly or partially to
perform the contract, he is bound to do so, and the subsequently acquired estate feeds the
estoppel which arises of the vendor's covenant for the title, express or implied.11
In Rajapakse v. Fernando, the Privy Council explained the English doctrine of "feeding grant
by estoppel."
English doctrine implies that where a grantor has purported to grant an interest in land which
he did not at the time possesses but subsequently acquires, the benefit of his subsequent
acquisition goes automatically to the earlier grantee, or as is usually expressed, 'feeds the
estoppel.12

This is estoppel by deed, under the document. Estoppel is a rule of evidence that precludes or
debars a person from denying his statement when it goes against him. But, here estoppel

8
Blackstone, ’Commentaries on Law of England' (Vol. 1, 1232) <http://oll.libraryfund.org/title/2140> accessed
on 20 March 2020.
9
Methavathy v. Punyakodi [2013] 1 MWN Civil 126.
10
Id., at Para 9, 129.
11
Johari v. Dropadi [1197] LJ 223 (MP).
12
Rajapakse v. Fernando[1920] AIR PC 216.
affects the legal relation transferor and transferee for value without notice.13 The principle of
‘feeding grant by estoppel’ is also based on the equitable doctrine that a man who has
promised more than he can perform must make good his contract when he acquires the power
of performance.14 In Holroyd v. Marshall the House of Lords held that, if future sale or
mortgage were sufficiently embarked at the time of contract and were such that equity might
decree specific performance of it, equity will replace the property in a state of anticipatory
isolation so as to give the beneficial interest therein to the intended transferee, directly the
property comes into existence of the intended transferor.15 The English doctrine of ‘feeding
grant by estoppel’ has been adopted in India. In Tilakdhari v. Khedan Lal, Lord Buckmaster
applied the doctrine, deciding an appeal from Bombay High Court and the Privy Council
observed:
This principle of law, which is sometimes referred to as feeding the grant by estoppel is well
established in this country. If a man who has no title whatever to property grants it by a
conveyance which in form would carry the legal estate, and he subsequently acquires an
interest sufficient to satisfy the grant the estate instantly passes. In such as case there is
nothing on which the second grant could operate in prejudice to the first.16
In India, Section 43 of the Transfer of Property Act 1882, which included the concept of
estoppel by deed, established the notion of feeding the grant by estoppel. This clause allows a
transferee to whom a transfer is made based on a fraudulent or erroneous representation to lay
claim to any interest in the property that the transferor may later acquire, as long as he does
not jeopardise the right of any subsequent purchaser for value without notice. 17 It is
immaterial whether the transferor acts bona fide or fraudulently in making the representation,
common law rule of estoppel by deed known as ‘feeding the estoppel’ comes into play in as
much as the subsequent estate passes to the transferee, without any further act of the
transferor.18

Section 43 of Transfer of Property Act, 1882

13
T.V.R. Subbu Chetty’s family Charities v. Raghava Mudaliar [1916] AIR 797 (SC).
14
Abdul Kabir v. Jamila Khatoon [1951] AIR 315.
15
Holroyd v. Marshall[1862] 10 HLC 191.
16
Tilakdhari v. Khedan Lal [1862] 10 HLC 191.
17
Ram Bhawan Singh v. Jagdish [1990] 4 SCC 309.
18
Johari v. Dropadi [1197] LJ 223 (MP).
Section 43. Transfer by an unauthorized person who subsequently acquires interest in
the property transferred.- Where a person fraudulently or erroneously represents that he is
authorized to transfer certain immovable property and professes to transfer such property for
consideration such transfer shall, at the option of the transferee, operate on any interest which
the transferor may acquire in such property at any time during which the contract of transfer
subsists.
Nothing in this section shall impair the rights of transferees in good faith for consideration
without notice of the existence of the said option.19

Illustration
A, a Hindu who has divorced his father B, sells three fields, X, Y, and Z, to c, indicating that
A is entitled to do so. Z does not belong to A because it was retained by B on the partition;
nonetheless, upon B's death, A as successor inherits Z. C may force A to deliver Z to him if
the contract of sale has not been cancelled.
Section 43, clearly applies whenever a person transfers property to which he has no title on a
representation that he has a present and transferable interest therein and acting on that
representation, the transferee takes a transfer for consideration. 20 When these conditions are
satisfied, the section enacts that if the transferor subsequently acquires the property, the
transferee becomes entitled to it, if the transfer has not been cancelled and is been
subsisting.21 There is an exception under section 43 of the Transfer of Property act 1882 in
favour of transferred for consideration in good faith and without notice of the rights under the
prior transfer. But apart from that, the section is absolute and unqualified in its operation.22

This provision states that if a person without permission professes (agrees) to transfer
immovable property, he is estopped from later contesting the transfer if he later obtains such
authority. Section 43 of the law is founded on the following two ideas.

a) The equitable principle that if a person promises more than he can perform, he must
fulfil the promise when he has the power to do so, and

b) the common law doctrine of estoppel by deed.

19
Transfer of Property Act 1882, Section 43.
20
Jumma Masjid, Mercara v. Kodimaniandra [1962] AIR 84 (SC).
21
Ibid.
22
Ibid.
Condition for Application of Section 43

The rule of feeding grant by estoppel is also known as the 'rule of estoppel by deed by the
transferor.23 To claim the benefit of the doctrine of feeding the estoppel under Section 43 of
the Transfer of Property Act 1882 the claimant, in this case, will have to establish the
following conditions.24:

a) That the transferor, who makes or made the property transfer, had no title to the
property at the time of the transfer—the transferor is an unauthorised person.

b) That the transferor represents or did represent to the transferee that he owns the
transferable interest or title to the property. The transferor has made a false or
misleading representation about his entitlement to transfer.
c) That the transferee acts on the transferor's statements and, believing the transferor's
representations, accepts the transfer for valuable consideration.25

d) The transferor obtains authority for the transfer later.

a) Transferor is unauthorized person - A person who does not own or have an interest
in the immovable property at the time of transfer is not allowed to transfer it. The
transfer is made by an unauthorised individual if he transfers the property without
authorisation. In the eyes of the law, such a person cannot transfer any legal title or
interest in the property he has transferred. As a result, such a person does not transfer
the property; he only pretends to do so. The legal effect of such a transfer is that the
transferor has pledged to transfer the property and the transferee has agreed to do so.
As a result, a transfer by an unauthorised person would imply that there is a contract
for the establishment of interest in the future and that he is permitted to make the
transfer once he receives title or such interest established in the property.26

b) Fraudulent or erroneous representation - The transferor must have made a false or

fraudulent assertion about his authority to transfer the property. Misrepresentation
might take the form of an oral or written statement. It could also take the form of the
transferor's silence or inactivity. The false statement could be made maliciously or

23
T. Ramareddy v. The Tehsildar Bangarpet Taluk [2000] ILR 1637 (Kar).
24
Ibid.
25
Ibid.
26
Dr R.K. Sinha, The Transfer of Property Act (12th Edition, Central Law Agency, 2011).
 inadvertently. Only in circumstances where the transferor is an unlawful person due to
a lack of title does Section 43 apply. It does not address the lack of capacity of the
transferor, such as minorities or insanity.

It is essential that the transferee was misled by the representation of the transferor. In Sri
Narayan Chandra Saha v. Dipali Mukerjee.27 The transferee cannot claim protection under
section 43. After all, he had an awareness that son was not allowed to transfer, according to
the court, because he could not be deemed to have been deceived regarding son's
authorization to transfer. The Court pointed out that the provisions of this section would only
apply if the transferor made an authoritative representation and the transferee acted on that
representation.

In B. Narayanswami Raju v. Krishnamoorthy Mudalier28 , It was discovered that the vendee

had purchased the property fully aware of their vendors' rights. There was no evidence that
the vendee had made a false or fraudulent representation about the property's purchase. The
Court decided that the notion of feeding the grant by estoppel was not applicable in this case.
When both parties are aware of the truth, no estoppel can occur as a result of a false
declaration.

This section does not impose upon the transferee any duty to make a reasonable enquiry
about the title of the transferor. In Rampyari v. ram Narain, 29 Supreme Court held that the
person acting on the representation is under no duty to make reasonable enquiry 30. His acting
upon the representation of the transferor is sufficient.

c) The transfer is for consideration- Section 43 does not apply to a gratuitous transfer.
Thus, where the transfer is without consideration e.g. gift, the transferee cannot get
the benefit of this section. The section applies only to transfers for value. It may be
applied to sale, exchange, lease, mortgage because these transfers are supported with
consideration.31 A charge is not the transfer of any interest in immovable property.
Therefore, Section 43 cannot be made applicable to a charge created on immovable
property.32

27
Sri Narayan Chandra Saha v. Dipali Mukerjee [2002] AIR 229 (Cal).
28
Narayanswami Raju v. Krishnamoorthy Mudalier[1998] AIR 193 (Mad).
29
Rampyari v. ram Narain [1985] SC 694.
30
Zogu Ram v. Venkata Krishnayya [1946] AIR 107 (Mad).; Gopi Nath v. Rup Ram [1930] AIR 786 (All).
31
Dr R.K. Sinha, The Transfer of Property Act (12th Edition, Central Law Agency, 2011).
32
Panchanan Pal v. Nirode Kumar Biswas [1962] AIR 12 (Cal).
 d) The subsequent acquisition of authority by transferor- The transferor must next get the
title or an interest in the property that he had previously stated he would transfer. The
transferor may obtain power for the transfer through any legal manner, including
through the operation of law or inter vivos transfer. He can also get the property
through purchase, a gift, or an exchange, as well as through inheritance or a will.
However, Section 43 does not apply to involuntary transfers such as court-ordered
auction sales. Therefore, the auction purchaser cannot invoke the provisions of this
section for his benefit.33

When a person transfers property to which he has no title on the representation that he has a
present and transferable interest in it, and the transferee acts on the representation, Section 43
of the Transfer of Property Act, 1882 applies. When these conditions are satisfied, the section
enacts, that if the transferor subsequently acquires the property, the transferee is entitled to it,
if the transfer has not meantime been cancelled and is subsisting.34

The only exemption in this provision is in favour of transferees for consideration in good
faith and without notification of the preceding transfer's rights. Aside from that, the section's
operation is absolute and unqualified. It covers all transactions that meet the conditions laid
down therein. This section is applicable whether the defect in the title of transferor arises
because he has no title in the property or because he had an interest therein being an
expectant heir.35

The original terms in Section 43 of the Transfer of Property Act 1882 were 'where a person
erroneously represents' before the Amendment Act 20 of 1929, and today they are 'when a
person fraudulently or erroneously represents' as changed by the said act. The change brought
by the Amendment emphasizes that for the section it matters not whether the transferor acted
fraudulently or innocently in making the representation, and that what is material is that he
did make representation and the transferee has acted on it.36

The law of estoppel found in Section 43 of the Transfer of Property Act of 1882 differs from
the one found in Section 115 of the Indian Evidence Act of 1872. In the first case, estoppel
arising from representation has the effect of passing the property to the purchaser as soon as

33
Jote Singh v. Ram Das Mahto [1996] AIR 273 (SC).
34
Jumma Masjid, Mercara v. Kodimaniandra [1962] AIR 84 (SC).
35
Ibid.
36
Ram Pyare v. Ram Narayan [1985] 2 SCC 62.
the transferor gets it during the contract's term. In the latter case, there is no question of any
transfer of Property or of feeding the original grant.37

THE DOCTRINE OF FEEDING ESTOPPEL BY GRANT IN INDIAN COURTS:

In certain ways, Section 43 of the Transfer of Property Act 1882 differs from the English
Feeding Estoppel Doctrine by Grant. As with English law, Section 43 of the Act allows for
the automatic transfer of later acquired property. However, it occurs when the transferee
exercises his option to have the interest transferred to him, not when the interest is purchased.
In addition, English law does not take into account the exception provided under Section 43.

The Doctrine of feeding estoppel has been applied by courts in India even before the
enactment of the transfer of Property Act 1882. In Krishna Chandra Ghose v. Rasik Lal
Khan38, When no provision of feeding the estoppel was provided under Indian law, the court
utilised the equitable theory of feeding estoppel by grant concerning a Patta (Lease deed) and
applied the general rules of equity as applicable in England.

In several instances, the Supreme Court has explored the scope of Section 3 of the Transfer of
Property Act 1882. The Supreme Court found no necessary conflict between Section 6(a) and
Section 43 in Junna Masjid Mercara v. Kodimaniandra. The court underlined that Section
6(a) deals with specific types of property interests described and bans their transfer
simpliciter. Section 43 deals with representations as to tile made by a transferor who did not
have a title at the time of transfer, and it states that the transfer will tie itself to the title that
the transferor will later obtain.39

The Supreme Court has held that the notion of feeding the grant by estoppel does not apply if
the transferee is not misled and is aware of the fact that the transferor lacks title at the time of
transfer. The Court concluded in Kartar Singh v. Smt. Harbans Kaur that the rule of estoppel
by transferor's deed or the rule of feeding the estoppel inherent in Section 43 of the Act
would apply only when the transferee has been misled. The letter in the sale deed informed
the appellant of the mother's limited rights as guardian, and as a responsible man, he was
required to ask if the mother is competent to alienate the minor's estate on her own. The
requirements of Section 43 are not satisfied if such acts are not performed.

37
Arnlayi v. Jagdeesiah [1964] AIR 100 (Mad).
38
Krishna Chandra Ghose v. Rasik Lal Khan [1917] AIR 433 (Cal).
39
Jumma Masjid, Mercara v. Kodimaniandra [1962] AIR 84 (SC).
In Johri v. Mahila Dropadi, the Court established the point of law regarding fraudulent
misrepresentation on the part of the transferor. The question before the Court was whether the
transfer of property made by the respondent on behalf of her lunatic husband was protected
under Section 43 of the Transfer of Property Act 1882. Court held that the principle of
feeding estoppel by the grant is not applicable to the fact of the case as the transferee was
aware of the fact that the transferor was not entitled to transfer the property. Further, the court
observed that for applying such a principle there must be a fraudulent or erroneous
representation by the transferor about his title and the transferee must have acted on it.40

Another important point about the application of the idea of feeding estoppel by the grant is
whether it applies to transfers of property without consideration or only to transfers for
consideration. In Ganga Baksh Singh v. Madho Singh, the Allahabad High Court held that
Section 43 is applicable only in case of transfer for consideration and not in case of a gift. A
gift of property in which a transferor has no interest will not be protected under this section if
the transferor acquires a title to the property after the gift. 41 But, the contrary opinion was
expressed by Supreme Court in Renu Devi v. Mahendra Singh, where the court applied the
'general principle' of feeding estoppel by grant, to uphold the validity of gift deed. Court held,
the doctrine of feeding the estoppel, which in essence a principle of equity, does not in terms
apply as the deed stated in the case as it is not a transfer for consideration.42

In the case of N. Srinivasa Rao v. Special Court, the court held that the doctrine of feeding
estoppel by the grant is not applicable if the transfer of property has been made in violation of
the statutory provision.43 Also, Court in Brahmvart Sanatan Dharm Mandal v. Prem Kumar,
held that Section 43 of the Act, provides for the protection of bona fide transferees for
consideration.44

Recently, in Agricultural Produce and Marketing Committee v. Bannamma, Supreme Court

considered the applicability of Section 43 of the Transfer of Property Act 1882 in a situation
when the transferor never got title over the property during his lifetime and where the
transferor having no interest in the property transfers the same, the purchaser may claim the
benefits of such subsequent acquisition of the property by the transferor.45
40
Johari v. Dropadi [1197] LJ 223 (MP).
41
Ganga Baksh Singh v. Madho Singh [1955] AIR 288 (All).
42
Renu Devi v. Mahendra Singh [2003] 10 SCC 200.
43
N. Srinivasa Rao v. Special Court [2006] 4 SCC 214.
44
Brahmvart Sanatan Dharm Mandal v. Prem Kumar [1985] 3 SCC 350.
45
Agricultural Produce and Marketing Committee v. Bannamma [2015] 5 SCC 691.
Section 53 of the Transfer of Property Act, 1882

According to TOPA section 53, every property owner has the right to transfer his or her
property as he or she sees fit. However, the transfer must be made in good faith. When a
transfer is made with the intent to defraud a creditor or a subsequent transferee, it is referred
to as a fraudulent transfer. When a transfer is made to defraud, the object of the transfer is
evil in the eyes of equity and justice, even if it is legal.

Essentials of Section 53

a) Transfer of immovable property

b) Made with intent to default or delay the creditors of the transfer.

c) Shall be voidable at the option of the creditor so defeated or delayed.

But,the provision of this subsection shall not affect-

i. The right of the subsequent transferee in good faith, for consideration.

ii. Any law for the time being in force relating to insolvency.

1) Every transfer of immovable property made with intent to defeat or delay the creditors
of the transferor shall be voidable at the option of any creditor so defeated or delayed.
Nothing in this sub-section shall impair the rights of a transferee in good faith and for
consideration. Nothing in this subsection shall affect any law for the time being in
force relating to insolvency. A suit instituted by a creditor (which term includes a
decree-holder whether he has or has not applied for execution of his decree) to avoid a
transfer on the ground that it has been made with intent to defeat or delay the creditors
of the transferor shall be instituted on behalf of, or for the benefit of, all the creditors.
2) Any transfer of immovable property made without consideration with the intent to
defraud a subsequent transferee is voidable at the transferee's discretion. No transfer
made without consideration shall be presumed to have been undertaken with the intent
to defraud for this subsection merely because a subsequent transfer for consideration
was made.46 For example, X took out a loan from Y and used his property A as
collateral. The property is then altered in favour of X's son. The mutation is carried
46
Dr Vimla Prasad v. Delhi Administration [1963] AIR 1572 (SC).
 out without interfering with the transfer. Because the father still owns the property,
what looks to be a transfer is merely a ruse, and because Y still has a claim to it, there
is no transfer.

In the case of Kanchanbai v. Moti Chand47-

The Creditor owes the Transferor Rs. 2600. The creditor demanded that the money be
returned to him/her. When the transferor refused to pay even after being requested for money,
the creditor threatened to initiate a lawsuit. The transferor executed a gift deed in favour of
her daughter in law after getting notification of the same. The transfer was challenged in
court under Section 53 of the TPA by a creditor.

The transferor argued that because there was only one creditor, Section 53 of the TPA was
not applicable in this matter.

The court noted that the term "creditors" might simply refer to a single creditor. Even if a
single creditor is defrauded or there was only the intention to defraud a single creditor, the
clause would be triggered. The transfer was made in this case to defeat and delay the
creditor's claim. As a result, section 53 would apply.

The mere preference of one creditor over another does not trigger this section unless it can be
demonstrated that it was done to defraud other creditors' claims.

Conclusion

Transfer of property by an unauthorised person who has no title to the property but later
acquires an interest in it, where the transferor fraudulently or erroneously represents that he is
authorised to transfer certain immovable property and professes to transfer such property for
consideration to deceive the transferee, and where the transferee believed to be acting under
the authority of law in good faith. In such cases, Section 43 of the Transfer of Property Act
1882 enshrined the doctrine of estoppel, which incorporated the doctrine of feeding the gift
by estoppel, which was established under English law. Feeding the estoppel impacts the legal
47
Kanchanbai v. Moti Chand [1967] AIR 145( MP).
relationship between the transferor and the transferee for value without notice. In numerous
decisions, Indian courts attempted to define the idea of feeding the estoppel about
misrepresentation, consideration, and good faith in diverse contexts. In India, this theory is
used to safeguard the transferee's interests while also allowing the transferor to follow the
equitable principle of promising more than he can deliver and then having to follow through
when he can provide. Similarly, section 41 mentions the ostensible owner whose name is
written in the transaction to conceal the real owner's name. Such a transaction is known as a
Benami Transaction, and it is currently considered illegal by the 1988 amending Act. The
Indian courts are highlighting the importance of safeguarding the interests of transferees who
have been harmed as a result of an improper act by the person who transferred the property
for their benefit. Section 53 also addresses fraudulent transfers conducted by a transferor to
defraud creditors and take advantage of their trustworthiness. As a result, it can be stated that
Indian courts are automating to strengthen the position of the transferee in the transfer of
immovable property and are emphasising the need to eliminate the interests of unauthorised
persons who deceive people for a fee. The provisions of the Transfer of Property Act 1882
are absolute and unqualified, but they should be considered as amending certain clauses that
do not clearly define the position of an unauthorised person when it comes to property
transfers.