Transfer By Ostensible Owner Under Transfer Of Property Act

MEANING OF OSTENSIBLE OWNER:

The word ‘ostensible’ literally means ‘apparent’ or ‘seeming’. An ostensible owner is a person
who appears to be the owner of immovable property even though he is not the real owner of the
property. The provisions regarding transfer by ostensible owner are governed by section 41 of
the Transfer of Property Act, 1882.

PROVISIONS RELATED TO TRANSFER BY OSTENSIBLE OWNER:

Section 41 of The Transfer Of Property Act, 1882  states that

“Where, with consent, express or implied, of the persons interested in immovable property, a
person is the ostensible owner of such property and transfers the same for consideration, the
transfer shall not be voidable on the ground that the transferor was not authorized to make it:

Provided that the transferee, after taking reasonable care to ascertain that the transferor had
power to make the transfer, has acted in good faith.”
The provision is based on the principle  Nemo dat quod non habet i.e. no one can confer a higher
right on property than what he himself possess and nemo plus juris and alium transferee potest
quam ipsa habet i.e. no man can transfer a right or title greater than what he himself has. The
transfer by ostensible owner underlines the principle of holding out.

The privy council in Ram Coomar v. MacQueen, in regard with transfer by ostensible owner
held that

“It is principle of natural equity which must be applicable that where one man allows another to
hold himself as the owner of an estate and a third person purchases it, for value, from the
apparent owner in the belief that he is the real owner shall not be permitted to recover upon a
secrete title, unless he can overthrow that of notice, or something which amounts to constructive
which ought to have put him upon an enquiry, that, if prosecuted would have led to a discovery
of it.”
The doctrine of Lis Pendens

Introduction                                                
The Transfer of Property Act, 1882, was promulgated embodying the principles of English
Common Law, namely equity, good conscience, and justice underscored by the provisions of the
Indian Contract Act, 1872, and came into force from July 1, 1882.

Property or ownership are synonymous with each other, and ownership interest is automatically
created when a right is vested.

Ownership has to be:

1. Indefinite in point of the user – The owner may use the property subject to some
restrictions without injuring the rights of other persons, but at no point in time will it
negate the ownership in the property even if the rights may be curtailed.
2. Unrestricted in the point of disposition – The owner has an unfettered right to dispose
of the property. However, there are exceptions to this as minors (those below the age
of 18) can be owners but cannot alienate the property. Also, the Government may
acquire the property for specific purposes irrespective of the property owner’s
consent. 
3. Unlimited in the point of duration – As long as the property in question exists, the
property rights are heritable. Again, the Government can, at any point, acquire the
property and terminate the owner’s rights.
The Transfer of Property Act covers transfers inter vivos, i.e., between two living persons. A
transfer is defined as an act by which living persons convey the property to one or more living
persons.

The transferee can get the transferor’s rights and nothing more, where the owner is the transferor,
and the transferee is the person or persons to whom the rights are conveyed.

The first amendment to the Transfer of Property Act, 1882, was in 1929, whereby the definition
of living persons was amended to include companies, associations, and bodies of individuals,
whether incorporated or not. 

Origin of the doctrine of Lis Pendens

The doctrine of Lis Pendens has its origin by Lord Justice Turner in Bellamy Vs. Sabine,
1857 Where the Court observed the following:
“This is a doctrine common to law and equity courts, which I apprehend, on the grounds that, if
alienation pendente lite was allowed to prevail, it would simply not be possible for any action or
suit to be resolved successfully. In any case, the Plaintiff will be responsible for the Defendant
who alienated the property before the judgment or the decree and must be obliged, according to
the same course of action, to initiate these proceedings de novo.”

The facts of the above case were the following:

A person, Mr X, sold an immovable property to Mr A.

Mr X’s son, Mr Z, who was the heir of Mr. X, sued Mr A in a competent court to declare the sale
as void.

However, while this litigation was pending, Mr. A sold the property to Mr. B, who did not take
notice of the suit. 

The Court held that the son Mr. Z was entitled to the property and the sale was set aside. 

Mr. B who purchased the property from Mr. A does not get any title as he purchased the property
from someone who did not have the title and therefore cannot convey it.

Therefore, evolving the principles of common law and Section 52 of The Transfer of Property
Act, 1882, was born and is as follows:

When there is an ongoing lawsuit in any Court having authority within the limits of India, a suit
or proceeding in which any right to immovable property is precisely in question, the property
cannot be conveyed by any party to the lawsuit which can influence the rights of any other party
thereto under any order which may be rendered therein, unless under the jurisdiction of the
Court and on such conditions as it may enforce.

Lis Pendens literally means ‘litigation pending’ or ‘pending suit’ and is drawn from the concept
based on the maxim “Pendente lite nihil innovature” which means that nothing new must be
introduced while a litigation or suit is pending.

This Doctrine states that the Transfer of property shall be restricted when there is a litigation
pending on the title or any rights that arise directly thereof involving an immovable property.

The suit commences the moment a complaint is presented or the day of commencement of
proceedings in the appropriate Court and shall be terminated by Order of the Court.

The Court may, however, permit any party to the suit to transfer the property on such terms
which it may think fit and proper to impose.
The sale of immovable property can take place through private negotiations, but the said
Transfer will be subservient to the verdict of the competent Court.

Now that the doctrine is clear, an inevitable question that may arise is – what is the objective or
purpose of this doctrine? Let us read on to find out.

The purpose of the doctrine of Lis Pendens

This Doctrine is essential as it prevents Transfer of the title of any disputed property without the
Court’s consent, there can be endless litigation, and it will become impossible to bring a lawsuit
to a successful termination if alienations are permitted to prevail, and covenants are not imposed.

The ‘Transferee pendente lite’ is bound by the verdict just as if he were a party to the suit and the
transfer shall be subservient to the result of the pending lawsuit.

Let us understand the various conditions that need to be met for the doctrine to apply:

Conditions for Applicability of the Doctrine as provided in Section 52

 A suit or proceeding is pending. 

 The above suit is brought to a competent court within the jurisdiction.
 The right to the title of an immovable property is directly in question.
 There cannot be any collusion.
 The suit should directly affect the rights of the other party.
 The property in question is being transferred by either party.
Some examples for Non-Applicability:

 This does not apply to a private sale by a creditor who holds the right to dispose of the
property that is mortgaged to it even when the borrower has a redemption suit
pending.
 The Doctrine also does not apply when the property is not described correctly, making
it unidentifiable. 
 In a maintenance suit, where the property is mentioned only so that maintenance
payments can be determined transparently; the Doctrine does not apply when a right
to the said immovable property is not directly in question and alienations are thereby
permitted.
  The Doctrine fails to apply when a Court orders restoration of immovable property
under the Civil Procedure Code, Order 21, Rule 63.

Understanding the jurisprudential evolution of this Doctrine

In Ayyaswami vs Jayaram Mudaliar AIR 1973 SC 569, the Court held that the purpose of this
provision is not to deprive the parties of every just or fair argument but rather to guarantee that
the parties submit themselves to the jurisdiction and authority of the Court which shall determine
all claims that are placed before it to the satisfaction of the parties concerned.

In the case of Hardev Singh v. Gurmail Singh, Civil Appeal No. 6222 of 2000, the Court ruled
that Section 52 of the Transfer of Property Act, would not make void or unlawful any sale of the
contested properties, but only puts the purchaser beyond the binding limits of the judgment on
the disposition of the conflict.

In the case of Koyalee v. Rajasthan District, AIR 2009 Raj.28, the land in question was originally
registered in the name of the Plaintiff’s husband. After his death, his brother realised and
knowing well that the wife of his brother was alive and was the sole legal heir, filed a lawsuit
pursuing the Khatedari rights, and pursuant to this, the wife had to contest that she was the sole
legal heir of the recorded Khatedar. The brother further went on to transfer the land despite the
lawsuit that was pending, since this was done without seeking the Court’s permission the transfer
was struck down under Section 52 of the Transfer of Property Act as per the Doctrine of lis
pendens.

In  Vinod Seth v. Devinder Bajaj, 2010, though reiterating its power to exclude the suit property
from the limitations set out in Section 52 of the Act, it has allowed the Respondent to make a
pendente lite move. These exemptions under Section 52 are, however, subject to certain
conditions imposed by the Court. In the case at question, the Plaintiff was a contractor who
wished to make a profit by constructing a building on the suit-land, and the Defendant wanted to
move it to a third party. A total of three lakh rupees was to be deposited as a security by the
Defendant to transfer the property in question, The sum the claimant would have profited by.
The Court had thus levied the condition for the payment of that sum, which would make the
pendente lite transfer legitimate.

The Court’s positions on this pendente lite-transfers issue are explained in Ashok Kumar v.
Govindammal and Anr, 2010. The Supreme Court of India has here reaffirmed that a pendente
lite cannot be transferred for a property whose title is the subject of litigation.

These transfer payments would limit the rights of the party to whom the Court would eventually
have agreed that the property would be given the title. Where the right of the pendente lite
transferor to the property is upheld under the decree of the Court, then the title of the transferee
to the property is disregarded. However, if the title of the  pendente lite transferor is
acknowledged only for a smaller portion of the property, only for that portion of the property can
a transferor have the title. The Transfer of the title of the rest of the land, for which there is no
right for the pendente lite transferor, is invalid. This means that the transferee cannot claim the
title or any other interest in the rest of the property. Finally, if the transferor was found to have
no right in the first place to the transferred land, then the transferor would also not have gained
rights on this property.

The Supreme Court discussed and amended the law concerning the Doctrine of lis pendens
in Har Narain v Mam Chand, in compliance with Section 47(2) of The Registration Act, 1908.
The lis pendens doctrine states that no fixed property may be transferred when a lawsuit relating
to it is pending. Under Section 47, from the date of execution, a recorded sale deed of a fixed
property is considered to exist upon registration. The Court made it clear that the fiction
produced pursuant to Section 47 does not prohibit lis pendens from functioning. Thus, if the civil
action starts and is registered later, the Court held that land sales are still subject to the principle
of lis pendens.

Conclusion
The doctrine of Lis Pendens is strictly based on the theory of necessity rather than on the theory
of notice governed by the principles enshrined in common law, namely Justice, Equity and Good
Conscience. It is, therefore, pivotal in ensuring that justice is provided without injuring the rights
of either party.

Doctrine of Fraudulent Transfer under Section 53 of TPA

Doctrine of Fraudulent Transfer
Lord Keeper in the case of Partridge v Gopp[1]had enunciated certain words which are relevant
herein. He opined that no one has power over his property to such extent using which he, whilst
using his right of alienation of property, can delay, defraud or hinder his creditors. The only the
situation he can do is when it is bona fide and is done upon consideration considered good in the
eyes of law.

The Transfer of Property Act, 1882, in Section 53 which deals with the Doctrine of Fraudulent
Transfer, embodies this very principle wherein it says that every transfer of property, which is
immovable in accordance with the relevant section of The Transfer of Property Act, 1882, which
is done possessed with an intention aimed to delay or defeat the creditors [ or the people to
whom the transferor owes some kind of liability which is financial in nature ] of the transferor
shall be voidable.

Such option to consider the transaction void or not has been left in the hands of the aggrieved
party who, here, will be the delayed or defeated creditors. This means that even though such
transfer is, in the eyes of law, valid but it is left upon the creditor as to whether he wishes to
avoid or not. The motive of the legislature behind such arrangement is to give the option to the
party who has suffered or whose interest has been affected.

Object behind the Doctrine of Fraudulent Transfers

Section 53 is attracted in cases wherein any transfer of property, which is immovable in

accordance with the relevant sections of The Transfer of Property Act, 1882, is done with the
design or scheme to fulfil the objective of defrauding his creditors in a manner that they are
defeated or delayed.

It was such practice that compelled the legislature to enact this section. Their objective was to
lend protection to creditors who are those to whom the transferor owes some sort of liability
which is financial in nature. The basic objective is to lend a blanket to such people who suffer in
the nature of delay or defeat of their interest. Such people whose mere fault was to lend money to
the ill-intentioned transferor must be provided some kind of security- one which only the
legislature through legal policy can provide.
Essentials of the Doctrine of Fraudulent Transfer
The essential requirements of Section 53 of TPA are as mentioned below:
Transfer of property
The property must be immovable in nature
Transfer in question must have been done with the plan or scheme in mind to delay or defeat
Such delay or defeat must be suffered by the creditor(s)
The transfer would be voidable
Transfer must be for consideration
Transfer of Property
The very first essential is the application of The Transfer of Property Act, 1882 itself. If the
transaction does not fall within the ambit of such legislation, there is absolutely no question of
application of Section 53 of The Transfer of Property Act, 1882. According to the Act[4], transfer
of property means when any person transfers property to one or more people, or to himself and
one or more people.

Such a person may include a company, a body of individuals, an individual or association, and
even immovable property can be transferred which would not, in any case, include growing
crops, standing timber, or grass[5]. Such transfer can be in present or even the future. However,
there are certain rights which cannot be, in any case, be transferred which have been stipulated in
Section 6 of The Transfer of Property Act, 1882. This transfer, moreover, shall be valid ( in the
eyes of law ) and additionally, should bestow a good title upon the transferee.

Following are some examples of transactions which do not transfer of property:

Surrender and relinquishments.
Relinquishment of share by one co-parcener in favour of the other[6].
Partition and family settlements but in case such partition is done with the design or scheme
which is aimed towards affecting creditors in a manner that would delay or defeat the interests of
the creditors, this section will apply
Where it is claimed that the transfer was a transaction that would be deemed to be fictitious or
sham ( in the eyes of law ) and there was no real transfer and was merely used in such a manner
that it acted as a shield for achieving a hidden agenda, Section 53 is not applicable.

The property must be Immovable in Nature

Section 53 of The Transfer of Property Act, 1882 attracts application to only those property
which is considered to be immovable in nature. At this juncture, we face the pertinent question as
to what are immovable properties:
While The Transfer of Property Act, 1882 does not define what is immovable property, according
to Section 3 of the Act, the immovable property does not, within its ambit, include:
Grass [which refers to fodder]
Standing Timber [which refers to trees which are fit to be used in repairs or buildings]
Growing Crops [which includes all such vegetables, etc. which are grown with the sole purpose
of their produce]
Scholars consider this definition to be a negative one since instead of outrightly providing
definition of immovable property, The Transfer of Property Act, 1882, merely gives us three
things that are not immovable property.
We look towards the General Clauses Act, 1867, for a more comprehensive definition of
immovable property. The General Clauses Act, 1867 specifies the following as immovable
property:
Land:
The term land includes within its ambit both - the lower as well as the upper surface area of
earth. Any kind of interest which tends to vest in such would be treated as it is of immovable
property. It includes streams, well, etc.
Benefits which are arising out of the land :Within such portion is includes everything which
deals with interest and rights vested inland, as defined above. Right of collect of rent is one
prominent example.
Things that are attached to Earth : Within this category, there are further three subcategories that
need to read into:
Things which are rooted in the Earth:
like shrubs, trees but does not include grass, standing timber, and growing crops. For example,
mango trees are immovable property.

Note:
In the celebrated case of Marshall v. Green [7], the learned court opined that if the sale was only
of the right to cut and enjoy the trees as timber then it does not qualify as an interest in an
immovable property but instead qualifies as an interest in movable property. It is only when such
right is extended over a number of years, it will qualify as an interest in an immovable property.

Things which are embedded in the Earth like minerals, buildings, etc. By the usage of the word
embedded, it means to structures or things which have laid their roots or foundations laid much
below the surface area of the Earth.

Things which have been fastened, in a the manner which is permanent, to anything which is
embedded in the Earth done for achieving one purpose which is of enjoyment but in a
permanent sense. However, if the things which are attached are just temporary or transitory in
nature and do not go on to add up to the value as well as the purpose of the structure or thing
they have been attached to, they cannot be termed as immovable in nature. An appropriate
example here would be ceiling fans,doors, and windows.

In order to determine whether a fixture in question is of permanent nature or is merely

temporary, we must consider the following points:
Mode of fixation that is to say it is temporary, standing on its own or has been dug in the Earth,
etc.
Objective or the purpose which the fixation is intended to fulfil

Transfer in question must have been done with the plan or scheme in mind to delay or defeat
The third essential of Section 53 is that the intention behind the transfer must be to delay or
defraud creditors. This is to say that it is important to cull out the intention behind the transfer
which is in question. If such transfer has been with the scheme or design to result in delay or
defeat of the creditors such transfer is voidable. Now the question arises as to how can this,
seemingly, ill intention is proved? It must be proved by making use of evidence which may be
direct or circumstantial in nature. Each case in question must be looked closely into and
examined keeping in mind the surrounding circumstances. Some situations which tend to give
strong presumption that the transfer,in question, was carried out with a scheme or design which
is fraudulent in nature are:
If the transfer was made under such circumstances that it was not widely known i.e. in secrecy
If the transfer was done in haste.
If the transfer was carried out soon after a decree was passed against the judgment-debtor. Such
decree must be such to order the repayment of debt.
If the transfer was such that the debtor, mysteriously, transferred the whole of his property
without any thought to himself i.e. without keeping any part of the property for himself.
The consideration made for the transfer was such which was significantly small, when it is
compared to the real, original or actual value of the property transferred.
In accordance to the evidence discovered, it was proved that there is actually no consideration
payment, contrary to what was given in the sale deed.

There are many more such circumstances but what is pertinent is that each case is read in a
different light, dependent solely on its own facts and circumstances there is no straight jacket
formula.

Such delay or defeat must be suffered by creditor(s)

The fourth essential is that the delay or defeat must have been suffered by creditor(s). This is to
say the ill intentioned transfer, in question must be such wherein the affected people is or are
creditor(s). Herein, it is pertinent to understand the term "creditor". It is said to be understood in
a wide sense for this section.
In the case of Ram Das v Debut[8], the term was interpreted to include such people to whom the
transferor owes some kind of liability which is financial in nature [ i.e. creditors ] which would
include not only those to whom he owes at the time of transfer in question as well as those to
whom he owes at a time which is after the transfer in question.

In order to effectuate application of The Transfer of Property Act, 1882, more specifically, the
Section 53 of the Act, it is necessary for the affected party to be a person to whom liability is
owed to by the transferor, a liability which is financial in nature. However, it is not necessary for
the creditor to be secured. On the contrary, such affected creditor could be an unsecured one as
well.

Moreover, even a subsequent creditor i.e. a person to whom the liability which is financial in
nature is owed to at a later date than the transferor, can move to the court under this particular
section. This connotes to the fact that debt to exist at the time of effectuating the transfer is not
mandatory.

If transfer of property is effectuated before the transaction of debt, possessed with the intention
or scheme that the transferor would undertake a liability [which would be financial in nature]
upon his head in future and for such purpose wanted to restrict his property from the reach or
hold of future creditors, it is deemed to be equally wrong or fraudulent in the eyes of law. Such
transaction is also liable to be set aside. Such setting aside, however, would be at the insistence
of creditors only since such transaction is deemed voidable.

However, armed with the mere fact that the loan was undertaken right after the property was
transfer or that there were subsequent debtors, is not sufficient for establishing the fact that there
was a scheme or design to defraud, delay or defeat the subsequent creditors.

Furthermore, one must remember that by usage of creditors, the legislator does not mean that the
intention should be to delay or defeat all the people to whom the transferor owes some kind of
liability which is financial in nature. The intention or scheme or plan to delay or defeat some or
even just one of the people to whom the transferor owes some kind of liability which is financial
in nature is sufficient to ensure application of Section 53.

In the case of Kanchanbai v. Moti Chand[9], the term creditors used in Section 53 was discussed.
In such case, the transferor undertook a liability which was financial in nature amounting to a
value of Rs. 2600 i.e. two thousand and six hundred rupees. The creditor requested repayment of
the money which was owed to him.
However, even after doing so, he was not paid back. At such instance, such person to whom
money was owed warned that he would move to the court to seek payment of his money. On
receipt of notice of such filing of suit, the transferor, by executing a gift deed [ in favour of his
daughter ], gifted his property. At this point, fed up of the transferors antics, the creditor moved
to the court seeking respite under Section 53 of the Act.

The transferor put forth the argument that Section 53 requires more than one creditor and in the
present instance, there is only one creditor. Hence, Section 53 would not be applied.
The learned court, on the other hand, opined that the usage of word creditors cannot be construed
to mean that Section 53 would be applicable only in the occasion of presence of multiple
creditors. This section would attract application even if one single creditor is delayed or defeated
or when there was an intention to delay or defeat even a single creditor. Therefore, in the present
case, Section 53 was held to be applicable.

Transfer would be voidable

Every transfer of property, which is immovable in accordance to the relevant section of The
Transfer of Property Act, 1882, which is donepossessed with an intentionaimed to delay or
defeatthe creditors [ or the people to whom the transferor owes some kind of liability which is
financial in nature ] of the transferor shall be voidable. Such option to consider the transaction
void or not has been left in the hands of the aggrieved party who, here, will be the delayed or
defeated creditors.

This means that even though such transfer is,in the eyes of law, valid but it is left upon the
creditor as to whether he wishes to avoid or not. The motive of the legislature behind such
arrangement is to give the option to the party who has suffered or whose interest has been
affected.

However, we must make note of the fact that only the particular part of transaction which was
effectuated with an ill intention, would be regarded as one which is fraudulent in nature. The rest
of the transfer which was not tainted with this scheme, would be effectuated normally i.e.
something akin to severability would be effectuated. The catch here is that in transfers wherein a
major part of the transaction in question is held to be one made possessed with an ill intent to
delay or defeat the creditor(s) and fraudulent parts of the transaction cannot be severed from the
rest of the transaction, then whole of such transaction in question would be held to be voidable.
Transfer must be for consideration
The transfer must be such which is for consideration, one which is not such which was
significantly small, when it is compared to the real, original or actual value of the property
transferred. This is to say the consideration for the transaction, in question, must be adequate.

Exceptions to Doctrine of Fraudulent Transfer

The Transfer of Property Act, 1882, by way of Section 53 has recognized two exceptions in
totem.
The doctrine of fraudulent transfer is not applicable to:
The person to whom the transfer is made does the whole deed in good faith and for
consideration.
Application of any law which relates to insolvency which is being enforced at such time.

The person to whom the transfer is made does the whole deed in good faith and for
consideration.

The transferee i.e. the person to whom the transfer is made is protected by law if they took the
property, in question, in absolute good faith and gave due consideration for the same. When the
transferee i.e. the person to whom the transfer is made purchased any property, being immovable
in nature, possessing such intent which is considered good faith and paid consideration which is
considered adequate the creditors [ i.e. the people to whom the transferor owes some kind of
liability which is financial in nature ] cannot take the help or derive benefit from Section 53 of
the Act.

In the instance that the person to whom the transfer is made lacks any knowledge i.e. possessed
no constructive or actual notice of the ill intent or intention which was fraudulent nature of the
transferor, the creditors [ i.e. the people to whom the transferor owes some kind of liability
which is financial in nature ] cannot try to stake claim over the property or to effectuate the
transfer as void under Section 53 of the Act. But if the transferee i.e. the person to whom the
transfer is made was keenly aware that the transferor was possessed of such foul intent and
keeping such in mind aims to keep mum about it, the transferee is not in good faith and would
not be covered by the exception.

In the case of Vinayak v. Kaniram[10], it was discovered that the intention of the person making
the transfer was not one which could be termed as one which was good since the intention was to
sell off his property which was immovable in nature and procure cash for it in return so as to,
effectively, keep it out of the hands of the people to whom he owed any kind of liability which
was financial in nature. Now, to make matters more interesting, it was further discovered that the
purchaser of the property was well aware of his ill intention to defraud.

The learned court, herein, held that since the person who purchased the property was aware of
the transferors ill intention, he also becomes party to the fraud because of his knowledge. The
transaction of sale was held to be voidable i.e. option to consider the transaction void or not has
been left in the hands of the aggrieved party who, here, will be the delayed or defeated creditors.
In the case of Kapini Goundan v. Sarangapani[11], a person belonging to the male population,
had taken a huge sum of money which was his liability which was financial in nature. The man,
being clever and thinking he was bigger than law, effectuated transfer of his property to children
who were borne from his marriage to his first wife in order to to, effectively, keep it out of the
hands of the people to whom he owed any kind of liability which was financial in nature.
He did so considering [ more like claiming ] it as a reward for her allowance to him to wed the
second wife. In this case possessing interesting factual matrix, the learned Madras court, held
that the consideration the person belonging to the male population was good in law and the
transfer lacked any indication of malice which would be to keep the property away from the
people to whom he owed any kind of liability which was financial in nature. However, according
to the author, the learned court erred in its decision and it would be wise to consider this decision
to be an exception and not something of general nature.

BENAMI TRANSACTION:

Agnew described that the word ‘Benam’ is of Persian origin made up of two words ‘be’ and
‘nam’ meaning ‘no name’ i.e. nameless or fictitious. The simple meaning of Benami is that a
purchaser desires to buy property but does not desire to buy in his own name and therefore buys
it in the name of someone else. The objective behind benami transaction is to hide the real
property, sometimes to avoid creditors and sometimes merely from habit or superstition.

Section 3 of Benami Transaction Act, 1988 lays down prohibition of benami transaction while
section 41 of The Transfer Of Property Act, 1882 allows such transfer. Thus transfer by
ostensible ownership under section 41 is subject to provision of Benami Transaction under
section 3 of Benami Transactions (Prohibition of the Right to Recover Property) Act, 1988.

Part Performance:
Doctrine of Part Performance is an equitable doctrine and it is incorporated to prevent fraud and
from taking illegal advantage on account of non-registration of the document. This Doctrine is
based on the maxim, Equity look at as it is done which ought to have been done.

Basically the doctrine says that the transferor or any person claiming under him shall be debarred
from enforcing against the transferee and the person claiming under him any right in respect of
the property of which the transferee has taken or continued in possession, other than a right
expressly provided by the term of the contract.

Definition

The doctrine of part performance is enshrined in the provisions of The Transfer of Property Act,
1882.

Section 53-A of the Act, deals with definition of the doctrine and it says:

When any person contracts to transfer for consideration any immovable property by writing
signed by him or on his behalf from which the terms necessary to constitute the transfer can be
ascertained with reasonable certainty, and the transferee has, in part performance of the contract,
taken possession of the property or any part thereof, or the transferee, being already in
possession, continues in possession in part performance of the contract and has done some act in
furtherance of the contract, and the transferee has performed or is willing to perform his part of
the contract, then, notwithstanding that where there is an instrument of transfer, that the transfer
has not been completed in the manner prescribed therefore by the law time being in force, the
transferor or any person claiming under him shall be debarred from enforcing against the
transferee and persons claiming under him any right in respect of the property of which the
transferee has taken or continued in possession, other than a right expressly provided by the
terms of the contract:

Provided that nothing in this section shall affect the rights of a transferee for consideration who
has no notice of the contract or of the part performance thereof.