Dr.

RAM MANOHAR LOHIYA NATIONAL

LAW UNIVERSITY

ACADEMIC SESSION: 2022-2023

PROPERTY LAE

TRANSFER BY OSTENSIBLE OWNER

Submitted to: Submitted by:

Dr. Manish Singh Saddhvi Nayak

Associate Professor (Law) 200101114

RMLNLU 5 th semester (Section B)

B.A.LLB.(Hons.)
 CONTENTS

S.NO. Topic Pg.NO.

1. Declaration 3

2. Acknowledgement 4
3. Transfer by Ostensible Owner 5

4. Introduction 6

5. Ramkumar Koondoo v. Maria Queen Case 6-8

6. Meaning of Ostensible Owner 8

7. Consent from the real owner 9

8. Implied Consent 9-10

9. Consideration 10-11

10. Reasonable Care 11-12

11. Proper Enquiry, Good Faith and Burden of 12-13

Proof
12. Difference between Ostensible owner and 13-16
Benamdar
13. Conclusion 16

14. Bibliography 17
 DECLARATION

I hereby declare that the project work entitled “Transfer by

Ostensible Owner” submitted to the Dr. Ram Manohar Lohiya
National Law University, Lucknow is a record of an original
work done by me under the guidance of Dr. Manish Singh,
faculty of law, the Dr. Ram Manohar Lohiya National Law
University and this project is submitted in the partial fulfillment
of the requirements for the award of the degree of B.A.L.L.B
(Hons.). The results embodied in this have not been submitted to
any other University or Institute for the award of any degree or
diploma.
 ACKNOWLEDGEMENT

This research paper would not have been accomplished without the
generous contributions of individuals. First of all, I express my gratitude
to the Almighty, who aided me with his strength, wisdom and patience to
complete this project as a term paper.

Additionally, I express my gratitude and deep regards to my teacher Dr.

Manish Singh for giving me the freedom to work on “Transfer by
Ostensible Owner” and also for his exemplary guidance, monitoring
and constant encouragement throughout the course of this research
paper.

I would also like to thank the authorities of Dr. Madhu Limaye Library
who provided the remote access of the library to provide the research
material.

Moreover, I also thank all my batchmates and seniors who aided me

along the way, and my family and friends for their constant
encouragement without which this assignment would not have been
possible.

I know that despite my best effort some discrepancies might have crept
in which I believe my humble professor would forgive.

THANKING YOU ALL.

Saddhvi Nayak.
 TRANSFER BY OSTENSIBLE OWNER [SECTION 41]

The general principle of law of transfer of property is that no person can transfer to
another a right or title greater than what he himself possesses. The maxim on
which this principal is based is nemo dat quod non – balet, i.e., no one can transfer
better title he himself has. This section is an exception of the rule.

Section 41 of Transfer of property Act, 1882 says that –

(1) Where with the consent (express or implied) of the persons interested in
immovable property,

(2) A person is the ostensible owner of such property, and

(3) Transfer the same for consideration,

(4) The transfer shall not be voidable on the ground that the transferor was not
authorized to make it,

(5) Provided that the transferee, after taking reasonable care to ascertain that the
transferor had power to make the transfer, has acted in good faith.

Transfer of property by an ostensible owner is a concept which was incorporated to

protect the rights of innocent third parties vis-à-vis the property owners. This paper
examines the landmark judgment of Ramcoomar Koondoo v. John and Maria
McQueen, the decision which found its way to be codified as section 41 of the
Transfer of Property Act. It also examines the various aspects and essentials that
must be fulfilled for the plaintiff to avail of the benefits of this principle. This
doctrine seeks to protect the interests of innocent third parties.1

1
http://www.lawctopus.com/academike/ostensible-owner-under-tpa/
 INTRODUCTION

The Transfer of Property Act, 1882, was passed with the purpose of making
transfer of property easier and makes it accessible to the population at large. This
Act lays down certain general principles as to transfer of property which has to be
followed. Transfer of a property by and ostensible owner is such a concept which
was incorporated to protect the rights of innocent third parties vis-à-vis the
property owners. This principle was first used in the much celebrated case of
Ramcoomar Koondoo v. John and Maria McQueen2 the Judicial Committee.

RAM KUMAR KOONDOO V. JOHN AND MARIA

MCQUEEN CASE

In this case, the plaintiff who had inherited a property by way of a will came to
know that someone else had already purchased this property in her name and
subsequently sold this property to a third person, by making him believe that he
had good title over that property. The whole transaction was a ‘benami’ transaction
but was not known to anyone except the person who sold the property. The
plaintiff sued the third party for recovery of the possession of the land but the
committee held that:

“It is a principle of natural equity, which must be universally applicable, that

where one man allows another to hold himself out 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, the man who so allows the other to hold himself our shall not be
permitted to recover upon his secret title, unless he can overthrow that of the
purchaser by showing, either that he had direct notice, or something which

2
(1872) 11 Beng LR 46, p 52
amounts to constructive notice, of the real title, or that there existed circumstances
which ought to have put him upon an inquiry that, if prosecuted would have led to
discovery of it.”3

It was there by held that the plaintiff cannot take back the property form the third
party and that the transfer was a legitimate transfer in the eyes of the law. This
wordings used in this case can be seen in the S. 41 of the Act which deals with
Ostensible owner.

SECTION 41 IS DEFINED AS

“Transfer by Ostensible Owner: Where, with the consent, express or implies, of the
persons interested in immovable property, a person is the ostensible owner of such
property and transfer the same for consideration, the transfer shall not be voidable
on the grounds 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.”4

The section lays down certain requirements to avail the benefit of this section.
They are:

 The primary condition is that the person who is transferring the property should
be ostensible owner.
 There should be consent form the real owner, which can be implied or express
form.5
 The ostensible owner should get some consideration in return of the property.

3
ibid
4
Section 41, Transfer of Property Act, 1882.
5
Abdul Gaffer v Nawab Ali, [1949] A.I.R. 17 (Assam).
 Reasonable care has to be taken by the transferee about the authority of
transferor to the property and the transferee had acted in good faith.6
 It goes without saying that this section is applicable only to transfer of
immovable property and not in case of movable property.

MEANING OF OSTENSIBLE OWNER

Ostensible owner is not the real owner but who can represent himself as the real
owner to the 3rd party for such dealings7. He has acquired that right by the willful
neglect or acquiesces by the real owner of the property thereby making him an
ostensible owner. A person who has gone abroad for some years has given his
property to his family relative for making use of it for agricultural purpose and for
all other purposes as he may deem fit. In this case the family relative is the
ostensible owner and if during that period he sells the property to a third party,
then the real owner after coming back cannot claim his property and say that the
person was not authorized to transfer his property. An alternative case can be when
the property is in wife’s name but husband used to take care of it and the other
dealings related to the property. If the husband thereby sells this property, the wife
cannot claim her property back. Or as in the Mohamad Shakur v Shah Jehan8, in
which the real owners lived in a different village, and had authorized a widow to
use the property as she liked and afterwards she sold it. The real owner lost the
case and the transfer was a valid one.

6
Chandini Prasad Ganguly v Gadadhar Singh Roy, [1949] A.I.R. 666 (Cal).

7
Kannashi Vershi v Ratnashi Nenshi, [1952] A.I.R. 85 (Kutch).

8
63 IC 125.
 CONSENT FROM THE REAL OWNER:

The main purpose of this section is to protect the rights of the innocent third party
who had purchased the property, when the real owner was himself at fault by not
protesting the transfer.9 But a necessary requirement is that the real owner should
have the capacity to give the consent10 and that consent should not be obtained
from any unlawful act. In the case of minors, even if the ostensible owner claims
that he has the consent of the minor, it will be held to be no consent as minors do
not have any capacity to give the required consent.11 And it was laid down in the
case of Satyanarayana Murthi vs. Pydayya12, that consent need not be taken from
the true owner and it might also be the case that the true owner had no knowledge
of the transfer. The consent in such transactions can be express or implied.

IMPLIED CONSENT

Implied consent can be made out from the conduct of the real owner. It is not
required that the real owner has to give express consent or give his consent in
writing.13 Therefore, where another person is dealing with the property of the real
owner, as if the property was his own, and the real owner knows about it, then it
will said to be implied consent on the part of the real owner.14 In the case of

9
Lickbarrow v. Mason, (1787) 5 Term Rep 683; In this case, it was held that where court has to choose between two
innocent parties, it will protect the rights of that party who had by no fault of his own has suffered. The pther party
who had the option to stop it or because of whose negligence this has happened will not be protected.
10
Sambhu Prasad v. Mahadeo Prasad, [1933] A.I.R. 493 (All).

11
This principle was followed in many cases such as Abdulla Khan v Bundi, (1912) ILR 34 All 22; Gadigeppa v
Balangauda, [1931] 741 (ILR 55 Bom).

12
[1943] A.I.R. 459 (Mad).
13
Dr. Poonam Pradhan Saxena, Property Law (2nd, LexisNexis , Gurgaon, India 2011) 181.
14
Sara Chunder v. Gopal Chunder, (1893) ILR 20 Cal 296
Shamsher Chand v Bakshi Meher Chand15, it was held that if a party is not aware
of his rights or is silent about them, then in such case it cannot be said that the real
owner had consented to the transfer of the property. It is required that a person who
is not aware of his rights could never have consented to that and such a transaction
will not be valid.16 It is not stated in the section that the real owner must have
actually consented to the transfer, because if that was the case, then the real owner
could never have made any objection to such transfer. It is just that the real owner
is unaware of this transaction or is negligent. Silence may amount to consent if the
silence on the part of real owner leads the third party to believe that the ostensible
owner is the real owner of the property. But in the case of Gurucharan Singh v.
Punjab State Electricity Board Patiala17, where the land in contention was
transferred to someone else and such person had perfected his right to the property
by paying the money. The new owner which is the real owner had not taken the
possession of the land and the previous owner after having waited for 12 years,
sold the land to third party. The real owner then comes forward and claim his right
over the land and the court said that the real owner was a minor at the time of
transfer of land and therefore could not take the possession of the land and
therefore it would not amount to silence on the part of the real owner as he could
never have consented to the transfer. Therefore the subsequent transfer was held to
be invalid.

CONSIDERATION

Consideration is a must if there is a transfer by ostensible owner. He cannot give

away the property as a gift. As it has also been provided in the Indian Contract Act,

15
AIR 1947 Lah 147.

16
Gulam Ahmed v Basheer Ahmed,[1960] A.I.R. 99( Mad)
17
[1989]A.I.R. 127 (P&H)
1872 that consideration is necessary component of any contract and transfer of
property by an ostensible owner is done by way of contract only. Also it has been
provided in S. 4 of the Act that anything not expressly defined in this act shall be
deduced form the general definitions given under the Indian Contract Act, 1872.

REASONABLE CARE

Reasonable care can be understood as the care which a reasonable and ordinary
man would have taken.18 He has a duty to check the title of the transferor.19 Like in
the case of Nageshar Prasad v. Raja Pateshri20 where there was an error in the
revenue records regarding the name of the owner. The name written was of some
other person and the real owner had already made a complaint about this error. The
person whose name was in the revenue records subsequently sold it to a third
person and the third person without making proper inquiries took the property and
the real owner afterwards objects to it. The court held that the third party has not
taken reasonable care which was required of him and therefore he will not be
protected by this section. The advice of solicitor will not be enough to prove that
the third party has taken reasonable care in determining the title of the
property.21The third party is required all the available documents which can
possibly give some more information regarding the title of the property and these
documents may include police registers, municipal registers apart from other
documents.

Kanhu Lal v Palu Sahu, [1920] 5 Pat LJ 521.

18
19
Chutabalakundu v. Sailen Bihari Paul, [1988] A.I.R. NOC 68 (Cal).
20
1915) 265 , (20 Cal WN).
21
Punendu Nath v. Hanut Mull, [1940] A.I.R. 565 (Cal).
There is also a safeguard for the real owner. In the case of Mathura v. Ambika22,
where the real owner had sold the property to another person and got it registered
before the transfer by the ostensible owner could be registered, then it was held
that the transfer by the real owner would be held valid as he has a greater title over
the property than the ostensible owner and the rights of third person who had
purchased this property from the ostensible would not be protected under this
section.

PROPER ENQUIRY

As a person is required to make reasonable inquiries, sometimes it is difficult to

make out what will amount to proper inquiry. The courts in India have held that
this being subjective, it will depend on the facts23 and circumstances of each case
and it can also be the case that what amounts to proper inquiry in one case may not
called proper inquiry in another case with completely different facts. If the transfer
is by Mahmomedans, it is a required of the purchaser to inquire if there is any
female heir also. In many cases it is such that only males transfer the property
without taking the consent of the females and this will not be a valid transfer
because they also have a share in the property and therefore the third person has to
inquire about such things.24 The ultimate test that is that the “transferee should
show that he acted like a reasonable man of business and with ordinary
prudence.”25

(1914) 993 (All) LJ.

22

23
Abdul v. Nawab, [1949] A.I.R. 17 (Assam).

24
Azima Bibi v Shamalanand, (1913) ILR 40 Cal 378.
25
Fazal Husain vs Muhammad Kazim And Ors., [1934] A.I.R. 193 (All).
 GOOD FAITH

Good faith simply means that the transferee should have honestly believed that the
ostensible owner is the true owner after all the proper inquiries conducted by him. 26
But where after proper inquiries the transferee has knowledge that the person
selling him the property is not the real owner but only the ostensible owner, the
transferee cannot neglect true fact.27 This is because of the fact that a person cannot
take advantage of his own negligence and then claim protection of this act. The
rights of real owner also need to be safeguarded against such persons.

BURDEN OF PROOF

The burden of proof is on the transferee to prove that the transferor was actually
the ostensible owner and had the consent to sell the property. 28 Also he has to
prove that he actually acted in good faith and had taken all reasonable care that was
required from him while taking the property. 29 This is because he has to prove that
he was not at fault while taking the property and to shift the burden on the real
owner. Alternatively, to shift his burden, he can also prove that the transferor did
not allow the transferee to know the real facts and tried everything to suppress the
facts.

26
Layak Ram v. Dharmavati, [2010] A.I.R. 95 (P&H).
27
Laxman Sakharam Salvi And Others vs Balkrishna Balvant Ghatage, [1955] A.I.R. 190 (Bom).

28
Ram v. Muktinath, [1956] A.I.R. 154 (Assam).
29
Gurbaksh Singh v Nikka Singh, [1963] 1 SCR 55 (Supp).
 RELATION BETWEEN OSTENSIBLE OWNER AND
BENAMDAR

The word ostensible , according to Mitra’s Legal and Commercial Dictionary

means ” Able to be seen ; apparent ; assumable ; avowed ; deceptive ; pretended ;
delusive ; delusory ;… The word ‘ostensible’ has two meanings –

a) that the object bears a certain from or appearance without suggesting that it is or
is not that of which it has the superficial appearance, and

b)that the object bears a certain appearance but is not really that of which it bears
the appearance. [case law : Debi Singh v/s Jagadish Saran AIR 1952 All 716 ].

DEFINITION

Ostensible owner is the person who is though not the real owner but has all
incidents and/or characteristics as the real owner. The person on the face of it i.e.,
apparently looks like the real owner but in fact he is not the real owner. Though he
owns the property and all the property documents, papers and records are on his
name on a minute scrutiny it can be found that he has never the intention to own
the property. The ostensible owner only fulfills and/or carries somebody else’s
wishes and/or aims. As per the wishes of the ostensible owner puts his name as an
owner on the records of the property although his has the intention to own the
property. The money required as the consideration of the property is funded by the
real owner i.e., the person whose wishes are carried on by the ostensible owner,
that person who had the intention to buy the property.

CASE LAWS

1. Kannashi Vershi v/s Ratanshi Nenshi AIR 1952 Kutch 85 :

It was held in the above mentioned case that an ostensible owner is one who has all
the indicia of ownership without being the real owner.

1. Jamanadas v/s Uma Shankar (1914) 36 All 308 ,25 IC 158.

2. Seshumull M shah v/s Sayed Abdul Rashid and ors AIR 1991 Kant 273 , 278.

3. Muhammad Sulaiman v/s Sakina Bibi (1922)44 All 674 ,69 IC 701 , AIR 1922
All 392:

It was held in the above mentioned cases that the possession of a manager cannot
be treated as an ostensible ownership with the consent of the real owner and it was
held to be so even in a case where the manager’s name had been entered in the
Municipal House Register as the real owner.

REAL TEST FOR TRACING WHETHER A PERSON IS

OSTENSIBLE OR NOT

For determining whether a person is ostensible owner or not:

 Firstly, we have to search the source of money which was needed for the
purchase of the property concerned whether it is the same person whose name is
there in the property documents or some other person’s name is there in those
documents.
 Secondly, whether the person having his name in the documents of the property
in question has any intention to purchase the same or not.
 Thirdly, it is the most important test for determining whether a person is
ostensible owner or not that who is the person who is really enjoying the
property so purchased or some other person is enjoying the same on his behalf.
If the person also is the owner as per the records and the documents of the
 property so concerned the chances of being ,it a property of an ostensible owner
or he being an ostensible owner is quite less. And if the person whose name is
there in the property documents is not similar then it enhances the chances of it
being a property of ostensible owner who is fulfilling the wishes of the real
owner.
Enjoying the property here does not only mean the mere enjoyment of the
property being in the possession of the property but includes the sailing rights
,right to lease out the said property and get the consideration from the same , to
enjoy the benefits out of the said property etc. Enjoyment has been given a
broad aspect in this aspect and particular case.
 Fourthly, the reason behind it being given the aspect of ostensible ownership,
i.e., the reason why the real owner has not purchased same in his own name.

CONCLUSION

Section 41 of the Act has done a fair job in protecting the interest of the innocent
third party. Though this section may seem to be a bit biased towards the third party
but this is mainly if the real owner is himself at some fault. No one can simply say
that he has now acquired the property and he cannot be evicted now. The third
party has to take a lot of care while purchasing the property and these necessary
requirements has been put by law itself to check the misuse of this section by
ostensible owner and the third party. This, in a way protects the interest of the real
owner also.
 BIBLIOGRAPHY

 The Indian Evidence act, 1882

 Dr. Poonam Pradhan Saxena, Property Law (2nd, LexisNexis , Gurgaon,
India 2011
 www.academike/ostensible-owner-under-tpa/
 https://advocateguru.com/transfer-by-ostensible-owner/
 https://lawexplainedindia.wordpress.com/2013/04/30/ostensible-owner-and-
benamdar/