ASSIGNMENT

Md. Shafiqullah Khan vs Md. Samiullah Khan on 19 July, 1929

Course code Law 548

Course Name Transfer of property Act

Submitted To Mrs SHIVALI

Submittted By PRATHAM GARG

Reg. No. 11607582

Roll NO A21 L- 1604

ACKNOWLEDGEMENT

I owe a great many thanks to a great many people who helped and supported me during the
writing of this project. My deepest thanks to my Lecturer, Mrs.Shivali for guiding me and
correcting various documents of mine with attention and care. She has taken pain to go
through the project and make necessary corrections as and when needed.

I would also thank my Institution and my faculty members without whom this project would
have been a distant reality.

SCOPE AND OBJECTIVE OF THE STUDY

The object of the study is to” KNOW HOW SUCH CASE FALSE INTO THE CATEGORY
OF PROPERTY LAW WITH ITS RELEVANT FACTS AND JUDGMENT, The study also
looks into the various related case laws to bring the clarity in the given concepts of the case.

RESEARCH METHODOLOGY

The methodology adopted is largely descriptive. It has largely placed on secondary sources
like books and research papers. The lectures and classroom discussion have been rich with
valuable and gave directions to the research.

RESEARCH QUESTIONS

 What is the validity and legality of Section 41 of TPA Act

 Mode of prevailing the benefit of Section 41 of TPA

TABLE OF CONTENT

 ABSTRACT OF THE CASE

 FACTS INVLOVED IN THE CASE
 ISSUES RAISED IN THE JUDGMENT
 PLEA TAKEN BY THE PLAINTIFF
 PLEA TAKEN BY THE RESPONDENT
 AFFECTS OF THE JUDGMENT
 JUDGMENT DELIVED
 SUGGESTIONS & RECOMMENDATION
 CONCLUSION
ABSTRACT
According to the case the plea taken by the court that section 41 of transfer of property Act
1882 is not applicable as transfer of Ostensible Owner c the property for consent. cannot take
the benefit under section 41 because although he is obstesible owner but real owner has
didn’t gave him right to transfer. He is just having the Possession. Here legal owner is a legal
heir of the owner.

Here section 41 is not applicable beacause real owner has not given him consent. Where no
cosent was given that does not mean it is implied consent because no right has been given,
even there is no conduct therefore the plaintiff cannot take a plea under section 41 of Transfer
of property Act.

But can do in good faith according to the sec 41 of the transfer of property act.

FACTS OF THE CASE

 The defendant's appeal arising out of a suit for recovery of money by sale.
 It appears that one Inayatullah Khan was the former owner of the property in suit and
made a simple mortgage in favour of Ahmad Said Khan for Rs. 6,000 on 12th June
1912.
 He died in 1916. The defendant Muhammad Shafiqullah Khan is admittedly his son.
 There were three other persons, Nuhullah, Hakimullah and Halimullah, who asserted
themselves to be the legitimate sons of Inayatullah Khan, but whose legitimacy had
been denied by Shafiqullah Khan.
 The names of these four persons were entered in the revenue papers against the
property left by Inayatullah.
 The mortgagee Ahmad Said Khan brought a suit on his mortgage and obtained a
decree for sale. In 1919 Shafiqullah Khan paid one-fourth of the decretal amount and
got a one-fourth share of the mortgaged property released from the mortgage.
 On 19th May 1920, borrowed Rs. 1,000 on a promissory note from one Tota Ram
and on 20th May 1920, they deposited the amount and thereby partially discharged
the mortgage decree.
 On 19th July 1920 executed a mortgage deed in favour of the plaintiff-respondent
Samiullah Khan for Rs. 3,000. It is this deed which is the basis of the present suit.
 The mortgage money consisted of the following three items: Rs. 180 previously taken
for expenses of the deed, 1,020 left with the mortgagee to be paid to Tota Ram, and
Rs. 1,800 received in cash at the time of the registration.
 So far as the deed went there was no recital of the necessity for borrowing Rs. 1,800.
 It is, however, clear that Rs. 1,800 were paid before the Sub-Registrar in the afternoon
of 19th July 1920 to the mortgagors and the mortgagors deposited Rs. 1,783-7-9 in
 Court on 20th July 1920 and thereby discharged the outstanding balance of the
decretal amount.
 It may here be mentioned that just four days before the mortgage namely on 15th July
1920 Shafiqullah had instituted a suit against Nuhullah and others for recovery of
possession of the property standing in their names.
 This suit was dismissed by the first Court in 1921 but was ultimately decreed by the
High Court on 8th June 1925 and the decree of the High Court was affirmed by their
Lordships of the Privy Council on 2nd May 1929.
 It was accordingly held inter parties that Nuhullah and the two others were not the
legitimate sons of Inayatullah and that Shafiqullah was the sole heir to the inheritance
left by him.

ISSUE
1. Whether section 41 of transfer of property act is legally applicable.
2. Wheather the benefit can be avail from section 41 or not ?

ISSUE NO. 1
On the question of the benefit of Section 41, T.P. Act, the finding of the lower appellate
Court is that Samiullah had no knowledge of the institution of the suit by Shafiqullah, that he
acted in good faith and took the property from Nuhullah and others believing them to have
title and that this belief was induced in his mind by the previous conduct of Shafiqullah Khan
who had allowed the names of Nuhullah and others to remain in the revenue papers and had
allowed them to remain in possession of the property. He accordingly held that the mortgagee
Samiullah was protected under Section 41, T.P. Act, and Shafiqullah Khan was estopped
from setting up his own title.

In the opinion of the learned Judge the fact that the mortgage had been taken during the
pendency of the suit did not help the defendant because the principle of lis pendens could not
operate to set aside the estoppel.

ISSUE NO 2.

The mortgage in favour of Samiullah Khan was invalid as against Shafiqullah Khan when
ultimately he succeeded in the suit. It is, however, argued that the effect of the estoppel
arising under Section 41 is to prevent Shafiqullah Khan from exercising his option to avoid
the transfer under Section 52. Now under Section 41, not only should the transferrer be the
ostensible owner of the property with the consent express or implied of the true owner but he
must also transfer the same with such consent express or implied. There can be no doubt that
the adverbial clause "with the consent express or implied" modifies not only the verb "is" but
also the verb "transfers." It must, therefore, be held that the consent express or implied must
continue up to the time of the transfer.
ARGUMENTS

REASONS RAISED BY PLAINTIFF

 Under Section 52, T.P. Act, during the active prosecution of a suit the property in
dispute cannot be transferred or otherwise dealt with by any party so as to affect the
rights of any other party under any decree that may be made therein. The section is
imperative and becomes operative from the very moment of the institution of a bona
fide suit which is not in any way collusive.
 The mortgage in favour of Samiullah Khan was invalid as against Shafiqullah Khan
when ultimately he succeeded in the suit. It is, however, argued that the effect of the
estoppel arising under Section 41 is to prevent Shafiqullah Khan from exercising his
option to avoid the transfer under Section 52. Now under Section 41, not only should
the transferrer be the ostensible owner of the property with the consent express or
implied of the true owner but he must also transfer the same with such consent
express or implied. There can be no doubt that the adverbial clause "with the consent
express or implied" modifies not only the verb "is" but also the verb "transfers." It
must, therefore, be held that the consent express or implied must continue up to the
time of the transfer.
 The principle underlying Section 52 were based on the presumption of a constructive
notice of the pendency of the suit by persons who take transfers from the parties
thereto, the conclusion would be clear that the previous consent express for implied
must be deemed to be revoked by the subsequent constructive notice of the pendency
of the suit. Storey in his Equity Jurisprudence has put forward the proposition that the
doctrine of lis pendens is based on some such constructive notice.

REASONS TAKE BY RESPONDENT

 In agreement with the judgment of my learned brother but wish to add a few
observations on two of the questions raised. The first question is the alleged conflict
between Sections 41 and 52, T.P. Act. Section 41 is a provision which can be invoked
by the transferee who has received property by transfer from the ostensible owner.
And the section provides that in order to defend the transfer of such a nature the
transferee must show that he had taken reasonable care to ascertain that the transferror
had power to make the transfer and has acted in good faith.

Taking reasonable care involves some enquiry as to the opinion of other persons interested in
the property and the section lays down as a preliminary that the transaction must be with the
consent, express or implied, of such persons. It is not enough for the transferee to say that as
far as he knows the other persons interested in the property have no objection to the transfer.
He must take some definite step to ascertain whether they consent or not.

This again does not mean that they consented in the past, but the transferee must ascertain if
they consent at the time of transfer. A person who has filed a suit challenging the whole right
of the transferors to dispose of the property, ipso facto does not consent to the transfer. The
fact that such a suit has been brought in good faith is one which the transferee must be able to
ascertain by taking reasonable care.

EFFECTS OF THE JUDGMENT

The answer to this question depends upon the intention of the parties at the time and that
intention must be found from the terms of the deed and the circumstances under which it was
executed.

Where the prior mortgage-debt is paid off out of the amount left in the hands of the
subsequent mortgagee for which there is a charge created by the deed itself, Section 74 would
apparently be inapplicable. That section implies tender by the subsequent mortgagee on his
own account and not as an agent of the mortgagor and gives to him a charge which would not
otherwise have existed. In cases where money is paid out of the sums left in the hands of the
subsequent mortgagee the hypothecated property is already a security for the entire amount. It
therefore seems to me that although in cases where the subsequent mortgagee pays an
additional sum to which Section 74 would be applicable, no enquiry into the intention to keep
the debt alive is required to be made, the real intention has to be ascertained in other cases
and such intention, if not expressly declared, can only be inferred from all the surrounding
circumstances. In the present case I have already stated that the mortgage-deed did not itself
recite the necessity for Rs. 1,800. If the mortgagee intended to keep it alive one would have
expected him to take care to have a clear statement recorded to that effect, On the plaintiff's
own showing he believed that his mortgagors were the true owners and there was no
apprehension in his mind that any other claimant would come forward to oust him. It is also
clear that there was no other intermediary mortgage.

RELEVANT CASE LAWS

The mere fact that a previous mortgage has been paid off is not conclusive to decide that
mortgage has not been extinguished Mohesh Das v. Baman Das [1883] 9 Cal. 961 (at p.
977). That was a case of the purchaser of the equity of redemption and not of a subsequent
mortgagee, but the principle laid down therein has been applied by the Courts to the cases of
subsequent mortgagees also provided there are no intermediary incumbrances.

the principle underlying Section 52 were based on the presumption of a constructive notice
of the pendency of the suit by persons who take transfers from the parties thereto, the
conclusion would be clear that the previous consent express for implied must be deemed to
be revoked by the subsequent constructive notice of the pendency of the suit. Storey in his
Equity Jurisprudence has put forward the proposition that the doctrine of lis pendens is based
on some such constructive notice. I am of opinion that the remark of their Lordships of the
Privy Council in the case of Faiyaz Husain Khan v. Prag Narain 1970

JUDGMENT

There was no other intermediary mortgage. Thus there was no apparent reason why the
mortgagee should intend to keep alive the previous mortgage debt for the payment of which
the money was being advanced. In this connexion it may also be noted that the old mortgage
had merged into a decree and was no longer in existence as a mortgage, and all that was left
to be done was to save the property from sale by payment of the decretal amount. We also
have the fact that the amount was taken by the mortgagors in cash and paid by them directly
and not left in the hands of the mortgagee for the discharge of the prior debt. It could never
have been the intention of the parties that the previous mortgage debt would be kept alive for
the benefit of the subsequent mortgagee as against the mortgagors. In the absence of any
direct evidence or of any circumstances indicating why there should have been a reason for
entertaining the intention to keep the previous mortgage-debt alive, it is impossible to hold
that the previous mortgage debt was not extinguished by the payment, but was kept alive for
the benefit of the subsequent mortgages.

Even if we assume that the subsequent mortgagee has himself paid the amount of the prior
mortgage which Shafiq-ullah was bound by law to pay and the case is covered by Section
69, Contract Act, and he is entitled to be reimbursed, the claim against Shafiqullah is
hopelessly beyond time. It would undoubtedly be governed by Article 61, Lim. Act, being
money payable to the plaintiff for money paid for the defendant. The suit was brought much
more than three years after such payment.

I would accordingly allow the appeal and setting aside the decree of the lower appellate Court
dismiss the plaintiff's suit in to.

The answer to this question depends upon the intention of the parties at the time and that
intention must be found from the terms of the deed and the circumstances under which it was
executed.

For these reasons I agree in the order proposed.

This appeal is allowed and the decree of the lower appellate Court set aside and the plaintiff's
suit is dismissed in to. But having regard to the finding of the District Judge that the plaintiff
acted in good faith and was induced by the previous conduct of Shafiqullah Khan to believe
that his mortgagors were the true owners, we think that this is a fit case in which the parties
should bear their own costs throughout.

Pullan, J
Conclusion

According to the section 41 of the transfer of property act. Obstensible owner can sale the
property in good faith and their is no intermediary mortgage so the decision of the supreme
court give the right decision and in this connexion it may also be noted that the old mortgage
had merged into a decree and was no longer in existence as a mortgage, and all that was left
to be done was to save the property from sale by payment of the decretal amount. We also
have the fact that the amount was taken by the mortgagors in cash and paid by them directly
and not left in the hands of the mortgagee for the discharge of the prior debt. It could never
have been the intention of the parties that the previous mortgage debt would be kept alive for
the benefit of the subsequent mortgagee as against the mortgagors. In the absence of any
direct evidence or of any circumstances indicating why there should have been a reason for
entertaining the intention to keep the previous mortgage-debt alive, it is impossible to hold
that the previous mortgage debt was not extinguished by the payment, but was kept alive for
the benefit of the subsequent mortgages.

Therefore, in this case the court has taken fair and genuine decision