Section 41, 43 and 51 of Transfer of

Property Act, 1882

Project work submitted to Rayat College of Law

In partial fulfilment of the requirement of the course
BA LLB for Fifth semester

Subject: Law of Property

Submitted on: 08.11.24

Under the supervision of Submitted By:

Ms. Manjeet Kaur Anmol Sharma
Asst. Prof. Law BA LLB (5th SEM)
Rayat College of law Sec A

Roll no 20069
 Acknowledgement

I am using this opportunity to express my gratitude to everyone who supported

me throughout the course of this Law of Property project. I am thankful for the
aspiring guidance, invaluably constructive criticism and friend advice during the
project work. I am sincerely grateful to them for sharing their truthful and
illuminating views on a number of issues related to the project. I will strive to
use gained skills and knowledge in the best possible way, and I will continue to
work on their improvement.
I express my warm thanks to my subject teacher Ms. Manjeet Kaur for giving
me opportunity to work on this topic and without her support and guidance ,I
would have not completed this project.
Furthermore I would also like to acknowledge with much appreciation the
crucial role of the Library staff of the department, who gave the permission to
use all required equipment, books and necessary material required to complete
the task, and thanks to all the people who provided me with the facilities being
required and conductive conditions for my Family law project. . I choose this
moment to acknowledge their contribution gratefully.
A special thanks goes to my class mate, who help me to assemble the parts and
gave suggestion about the task .
I also acknowledge with a deep sense of reverence, my gratitude towards my
parents and members of my family, who has always a supported me morally as
well as economically.
Any omission in this brief acknowledgement does not mean lack of gratitude.

Anmol Sharma
Introduction
The Transfer of Property Act, 1882, outlines laws governing the transfer of property,
emphasizing the rights of real owners, ostensible owners, and third parties. While the Act
doesn’t cover transfers through gifts, succession, inheritance, or testamentary, it aims to
streamline property transfers for the public. Section 41 of the Act establishes the principle of
transfer of property by ostensible owner, designed to protect the rights of innocent third
parties.
Definition of Ostensible Owner
An ostensible owner is an individual who appears to be the rightful owner of a property,
possessing indicia of ownership such as being listed on records and having physical
possession. However, the ostensible owner lacks the genuine intent to own the property.
The concept, governed by Section 41 of the Transfer of Property Act, 1882, recognizes
transfers made by such ostensible owners with the consent of interested parties. The transfer
is deemed valid for consideration, and it is not voidable based on the lack of authorization by
the ostensible owner.
This protection is contingent on the transferee acting in good faith and taking reasonable care
to confirm the transferor’s authority, ensuring a fair balance between property rights and the
interests of innocent transferees.
Understanding Section 41 of the Transfer of Property Act
Section 41 of the Transfer of Property Act, 1882 addresses the transfer of property to an
ostensible owner. It states that when an individual acts with the express or implied consent of
the true owner of a specific immovable property, that individual is recognized as the
‘ostensible owner’ of the property.
Conditions for Lawful Transfer by Ostensible Owner
1. The transferor must be the ostensible owner of the property, holding it with the
consent of the real owner.
2. The transfer must be for consideration, and the transferee must take reasonable
precautions to ascertain the transferor’s authority, acting in good faith.
3. Express or implied consent of the real owner is necessary for ostensible ownership.
4. The transfer must be made for something in return (consideration).
5. The transferee must exercise reasonable care and act with bona fide intention.
6. Lack of reasonable care by the transferee impacts the application of Section 41.
7. The transferee must demonstrate standard title investigation, and if the title is obvious,
no inquiry is necessary.
 8. Good faith is a crucial requirement, ensuring that the transferee acts honestly and
conducts a reasonable investigation into the transferor’s authority and title.
Benami Transactions and Section 41 of Transfer of Property Act
According to the Benami Transaction (Prohibition) Act of 1988, when a property is
transferred benami (under someone else’s name), the holder of the property becomes the
genuine owner, with the benamidar serving as a trustee.
The real owner can challenge such alienation only by proving lack of consent and the buyer’s
awareness. The Act prohibits legal actions or claims against the person in whose name the
property is held or any other claimant asserting real ownership.
Ownership rights of the true owner cannot be enforced against the benami owner due to legal
provisions such as the Benami Transaction (Prohibition) Amendment Act, 2016. This Act
renders the transfer by an ostensible owner illegal, with specific exceptions.
In Thakur Krishna vs. Kanhayalal, the court ruled that property held in the name of a
benami owner is subject to acquisition by the government’s competent authority without
compensation. However, the 2016 Amendment Act outlines exceptions, including property
held by the Karta or a member of an HUF for the benefit of other HUF members, purchases
by known sources for spouses or children, property held by a trustee, and jointly held
property with known individuals. These exceptions align with Section 41 of the Transfer of
Property Act, 1882.
Landmark Cases on Transfer of Property by Ostensible Owner
In the case of Md. Shafiqullah Khan v. Md. Samiullah Khan, the illegitimate sons of the
landowner acquired the property after his death, even though they were legally ineligible to
possess it. The legitimate heir, Muhammad Shafiqullah Khan, filed a lawsuit to claim his
inheritance rights. However, the illegitimate sons, acting as ostensible owners, sold the
property to a third party, Samiullah.
The lower court, considering Samiullah’s lack of knowledge about the lawsuit and his good
faith, protected him under Section 41 of the Act, barring Shafiqullah Khan from establishing
his title. The Allahabad High Court, in contrast, held that this did not meet the Section 41
requirement, as ownership was not obtained with the express or implied consent of the lawful
owner, thus denying the ostensible ownership status to the illegitimate sons.
In the case of Ishwar Dass vs. Bir Singh and Ors. before the court, the plaintiff claimed co-
ownership of a piece of land along with proforma defendants. The dispute revolved around
the extent of the plaintiff’s share in the land. The plaintiff asserted a 1/3rd share, while the
contesting defendants argued for a 1/6th share.
The land originally belonged to Saran Dass, who had two wives, Bimla Devi and Biasan
Devi. The plaintiff contended that, due to neglect by defendants 1 and 2 (sons of Biasan
Devi), Saran Dass gifted the land to Bimla Devi.
Defendants 1 and 2 challenged the gift, leading to a legal dispute that resulted in a partial
dismissal of the suit. The court addressed the issue of ostensible ownership within this
context, evaluating the plaintiff’s claim of co-ownership against the backdrop of the disputed
gift and its legal implications.
Conclusion
Section 41 of the Transfer of Property Act acts as a safeguard for unsuspecting third parties,
ensuring the validity of property transfers made by ostensible owners with the consent of
interested parties. However, this protection is contingent upon the third party’s careful
consideration and bona fide intentions, and it does not excuse negligence in property
acquisition.
The provision emphasizes the authority granted to ostensible owners by real owners, whether
expressed or implied, with legal constraints to prevent misuse. Property transfers, once
executed, are irreversible at the owner’s discretion, encompassing various forms such as
mortgages, leases, sales, or exchanges. The burden of proof lies with the transferee to
demonstrate the ostensible owner’s status, reinforcing the need for due diligence and cautious
investigation.

The doctrine of equity states that when one person either by his act or omission, or by
declaration, has made another person believe something to be true or persuaded that person to
act upon it, then in no case can he or his representative deny the truth of that thing later in the
suit or in the proceedings. In simple words, estoppel means one cannot contradict, deny or
declare to be false the previous statement which was made by him in the Court.
The law incorporated in S. 43 is based upon common law doctrine of Estoppel by deed and
the equitable by deed and the equitable principle that if a person promises more than he can
perform, then he must fulfil the promise, when he gets the ability to do so. Feeding the grant
by Estoppel acts as an exception to the general rule contained under S. 7 of the Transfer of
Property Act, 1882 according to which unauthorised transfers are void. However, in this case
such transfer is considered valid.

Introduction
Where a person has no right to transfer the property, he should not agree or profess to transfer
any interest therein. However, if he has professed to transfer, equity does not permit him to
deny his earlier statement. The Estoppel is backed by or is supported by, his own earlier
grant.
The English common law ‘Doctrine of estoppel by deed’ was extended by equity to estoppel
by representation. This extension dates back from the English case of Pickard v. Sears.
Ingredients
Fraudulent/ Erroneous Representation By The Transferor
The transferor transfers with a mala fide intention to deceive the transferee or under a mistake
of his own right.
As the equitable doctrine of estoppel requires a man to make his representation good, the
word fraudulently/erroneously is the foundation of this section. The words imply that the
intention can be intentionally false or can even be made under a mistaken belief of having the
authority to transfer. It need not be any particular form; it can even be by word of mouth or
by a document.
Transferree Acted Upon The Representation
On the erroneous and fraudulent representation made by the transferor, the transferee believes
him and acts upon such representation to complete the transaction. It is a well settled position
that no estoppel can arise where the true possession is known to the transferee. Section 43
does not apply to gracious transfer or gifts.
Subsequent Acquisition Of Authority By The Transferor
The transferor may acquire the authority by any legal method, for example, by gift, purchase,
inheritance or even by a will. Further, for the application of Section 43, the transfer should be
otherwise be valid, i.e., the transferor must be competent and the object to the transferor
should not be contrary to the public policy.
The transfer becomes valid when the transferee exercises the option and the title of the
transferor becomes perfect. Where the official receiver transfers property before it vests in
him, the implied covenant will be treated as erroneous representation, and the purchaser’s
title would be complete as soon as the property vests in him (Muthiya Chettiar v
Doraswami[1]). Similarly, where a partner sells the property of a firm in his right and
subsequently on the dissolution of the firm is allotted the same property, the transferee gets
the benefit of such allotment (Syed Nurul Hossein v Sheosahai[2]).
Further, the interest acquired by the transferor does not automatically pass on to the transferee
but only when he claims his interest in such property
There Should Be A Subsisting Contract Of Transfer
The option of the transfer can only be exercised in respect of an interest acquired by the
transferee whilst the contract of transfer “still subsists”. If the transferee (purchaser) had
repudiated or cancelled that transaction, or had recovered his purchase money, or if the
transaction were one of mortgage and the mortgage money had been repaid, then the relation
of the transferor and the transferee has ceased to exist, and no claim in respect of the property
can be made by the latter.
Invalid Transfer
43 of the Transfer of Property Act acts as an exception to S. 7 of the Act. S. 7 declares all
unauthorised transfers void, however, S. 43 acts as an exception of the same which declares
the unauthorised transfer under S. 43 valid. However, the transferee cannot take the help of S.
43 in the following cases:
 If the transaction is against public policy
 If the transferor is minor
Section 43 is applicable in all other situations except in the two conditions mentioned herein
above.
In the case of Rajapakse v. Fernando[3], the Privy Council observed that where the transferor
has purported to grant an interest in the property in which he did not have any interest at the
time of transfer but he subsequently acquires interest, the rule of estoppel applies against the
transferor, if he subsequently acquires that interest.
In Ram Bhawan Singh v Jagdish[4] the court observed that “when a person having a limited
interest in the property transfers a larger interest to the transferee on a representation, and
subsequently acquires the larger interest, the larger interest passes to the transferee at the
latter’s option. This doctrine not only applies to sale but also applies to a mortgage, lease,
charge, and exchange. Where no grant or interest in immovable property is involved, the
doctrine would not apply. The doctrine also does not apply in cases where the transferor has
acquired interest not in the property which is the subject matter of the transfer, but in some
other property.
Difference between English Law and Indian Law
There exists a difference between the English law and the Indian law on one point. In English
law, as soon as the transferor acquires the interest, an equitable estate passes to the transferee
automatically. However, under the Indian law, as soon as the property is acquired, no estate
passes to the transferee, however, an obligation is annexed to the property and the transferor
becomes trustee of it for the transferee.
The equitable rule is enacted under Section 13 (1) (a) of the Specific Relief Act. Since, under
the Indian Law, the transferee is required to take some further action by bringing the suit of
specific performance and in case he does not exercise his option, then the right of transferee
may get defeated by a purchase for value without notice.
Spes Successions
Spes Successionis is a latin maxim. It means the chance of succeeding in a person’s property
after his death. It states about the mere possibility of a person to succeed in a property after
his death. If The heir apparent or any relation expects to succeed in a property by way of will
or succession, then according to the transfer of Property Act, he does not vest any interest in
the property and cannot transfer that property.
The general rule of Section 6 of the Transfer of Property Act is that the person who possesses
an interest in the property can transfer the property. Transfer by an heir – apparent cannot be
taken as a transfer because the property is not in the hands of the transferor but there is only
an expectation that the heir – apparent may get the property in future. The Transfer of
Property Act, 1882 governs the transfer of property and prohibits some way of transfer to
protect the principle of equity.
Therefore, it is an undisputable law that no one can have any estate or interest at law or in
equity, contingent or other, in the property of a living person to which he hopes to succeed as
heir at law or next of kin of such living person. During the lifetime of such person no one can
have more than a spes successions, an expectation or hope of succeeding to his property.
The concept of Spes Successionis is contained under S. 6 (a) of the Transfer of Property Act.
In the case of Ghulam Abbas v. Hazi Koyyum[5], the Court held that the transfer of mere
expected interest is prohibited as being spes – successionis as waiting for the death of
someone is against public policy. Therefore, it is not allowed.
Whether There Is A Conflict Between Section 6(a) AND Section 43 of Transfer of
Property Act?
The honourable Supreme Court in the case of Juma Masjid v. Kodimaniandra[6], observed
that there is no conflict between Section 6 (a) and Section 43. The provisions of S. 6 (a) refer
to the rule of substantive law. Whereas S. 43 prescribes a rule of equity in case a transfer is
made by a person not having the authority to transfer.
1. 43 provides for the application of rule of estoppel against the transferor after he
acquires the authority to transfer. Further, Section 43 lays down that one of the
conditions for the applicability of estoppel against the transferor is that the transferee
must have been misled by the representation of the transferor. However, if the
transferee had the knowledge of facts and the title of the transferor, then Section 43
shall not apply, however, Section 6 (a) of the Act shall apply.
Section 43 applies only in those cases, where the transfer is for consideration, it does not
apply on gratuitous transfer. It applies in cases where despite a misrepresentation, the
transferor, either takes or seeks to take a monetary benefit from the transferee. It therefore
would not apply to cases where a person transfers the property by way of gift. On the other
hand, the prohibition under S. 6(a) applies to all kinds of transfers, irrespective of whether
they are for consideration or gratuitous transfer. A gift of property that a person hopes to
inherit is also void.
The status of a transfer under S. 6(a) is void in its inception, however under S. 43, the transfer
is voidable at the option of the transferee provided two conditions are satisfied. Firstly, that
the contract should be subsisting at the time the transferor attains competency to transfer the
property, i.e it should not have been rescinded and secondly, that the property should be
available with the transferor. It should not be in the hand of a bona fide transferee for value.
Conclusion
The doctrine contained under section 43 is based on the equitable principle that if a person
promises more than he can perform, then he must fulfil the promise, when he gets the ability
to do so. The rule in India is the rule extended by equity and it is contained under Section 115
of the Indian Evidence Act. As the equitable doctrine of estoppel requires a man to make his
representation good, therefore, if the transferor professes to transfer, equity does not permit
him to deny his earlier grant.

Section 51. Improvements made by bona fide holders under defective title
Improvements
Section 51 of the Transfer of Property Act, 1882 applies to a transferee, who, in good faith,
believes that he is the real owner of the property. He makes improvements under this belief
over the property but is subsequently evicted by the real owner.
In such a case, the law provides him with two options in the alternative generally i.e. in the
nature of relief to the transferee.
First, he can require the owner to pay him the value of the improvements effected by him on
the property and in the alternative; he can require the real owner to transfer the interest in the
property to him at the market value.
The option is with the person who evicts the transferee. Transferee has to select any one of
the reliefs given to him by the evictor. Transferee cannot compel the evictor to give any
particular relief to him – Motichand v. British India Corporation.
Normally the person having better title would give the cost of improvement. But, if he is too
poor to give the cost or it is otherwise not beneficial to him, he would sell his own interest in
property to the transferee.
The fundamental principle on which this section is based is the maxim — ‘one who seeks
equity must do equity’.
Under this section, law imposes an obligation upon the evictor to compensate a person acting
honestly and making improvements on the evictor's property. While evicting such person, the
real owner cannot appropriate or take benefit of the improvements made by this person
without compensating him.
What is absolutely essential is that the transferee was under a conviction that he holds the title
and was competent to improve the property. If he knew that he does not have the title to the
property, he would not be entitled to the protection under this section and the benefit of the
improvements would pass to the real owner – Ismail Hajee Essa Trust v. Muslim
Educational Society (Registered).
In Harilal Ranchhod v. Gordhan Keshav,
 The property belonging to the minor was sold by his guardian to a person X without
seeking the permission of the court.
 X paid the consideration and under the sincere belief that he was the absolute owner
of the property demolished the existing structure on the land and built a new house.
 The minor, on attaining majority, evicted X.
 The court held that the minor had a better title and he was entitled to the property, but
at the same time he was under a legal obligation to compensate X.
Provisions of Section 51. – Section 51 provides that:—
(i) When the transferee of immovable property,
(ii) makes any improvement on the property,
(iii) believing in goodfaith that he is absolutely entitled thereto, and
(iv) he is subsequently evicted therefrom by any person having better title,
the transferee has right to require the person causing eviction to either give the value of
improvement or to sell his interest in the property.
Essential Conditions of Section 51.-
As is clear from the analysis of the provisions of this section, following conditions are
necessary for the applicability of this section:
(a) The person who is being evicted is a transferee, and
(b) Such transferee had made improvements believing in good faith that he was
absolutely entitled to do so.
Transferee of immovable property.-
The equity enacted in this section gives relief to the transferee of an immovable property who
believes himself to be absolutely entitled to make improvements.
The words ‘absolutely entitled thereto’ indicate that the transferee must acquire a property
under absolute transfer. It should be transfer of all the rights in the property and not transfer
of an interest in it.
In the following cases the transferee has been given the benefit of this section:
(1) Where the transferee who purchased a property was given possession of a larger area than
he was entitled under the deed and who made improvements on excess land under a mistaken
belief that he was entitled to do so – Natesa Thevan v. Distt. Board of Tanjore.
(2) Where the transferee had purchased an immovable property exceeding Rs. 100 under an
oral agreement - Topanmal v. Chanchalmal.
(3) Where the transferee has purchased a life-estate believing that the vendor was absolutely
entitled to sell the property - Nanjamma v. Nacharammal.
(4) Where the transferee purchased the property bona fide in ignorance of mortgage –
Narayan Rao v. Basarayappa.
5) Where the transferee had purchased a minor's property from de facto guardian believing
that the guardian was authorised to sell the property – Horilal v. Gordhan
(6) Where the transferee was a grantee from a Tehsildar but believing that he was absolutely
entitle to do so had planted certain trees on the land – Chennapragada v. Secretary of State.
In the following cases the transferee cannot be given the benefit of this section:
Lessee.— A lessee cannot be regarded as a 'transferee' under this section and as such he
cannot claim compensation for any improvements made by him. There is no reason that a
lessee should believe that he is absolutely entitled to the property held by him even if he is a
permanent lessee.
Mortgagee.—A mortgagee is also not a person who could believe that he is absolutely
entitled to the property mortgaged to him. As such, Section 51 cannot give relief to
mortgagee who makes improvements on the mortgage-property – Santhan Kumar v. Indian
Bank.
Trespasser.—A trespasser can never be regarded as transferee, therefore, he cannot claim
compensation for any improvement made on the property held by him illegally – Daya Ram
v. Shyam Sundari.
Good Faith
Section 51 incorporates the principle of equity. Equity cannot help a person whose own
conduct is unjust.
Therefore, this section does not apply where the transferee's own conduct was mala fide. It is
necessary that the transferee had made improvements believing in good faith that he was
entitled to make such improvements.
Such belief of the transferee may be a mistaken belief or may be negligent but, it must not be
with dishonest intention. Exercise of reasonable care is not necessary; bona fide intention is
sufficient.
The expression 'believing in good faith' means honest belief. Where the transferee knows or
has reason to believe that he is not absolutely entitled to the property and yet makes
improvements, he cannot seek the protection of this section.
There is no objective test for ascertaining the honest belief of a person but, it may be inferred
from the surrounding circumstances.