RULE OF FEEDING GRANT BY ESTOPPEL

A person who has no title or interest in an immovable property, cannot transfer that property. If
he does so, the transfer is by an unauthorised person. This section provides that if a person
having no authority, professes to transfer an immovable property, he is estopped(excluded or
stopped) from denying the transfer when he subsequently acquires such authority. The law
incorporated in Section 43 is based on two principles :
1) Common law principle, ‘estoppel by deed’ and
•Estoppel is a rule of evidence which precludes or debars a person from denying his
statement when it goes against him.
•The principle of estoppel is not unfamiliar to the Indian Jurisprudence as it has been
integrated into various statutes. This concept of estoppel essentially means that in a
situation where a person has promised to perform a certain act, he is bound to keep that
promise if the promise has already been acted upon by the promisee.

2) second is a principle of equity ; the equitable principle that if a person promises more
than he can perform, then he must fulfil the promise when he gets ability to do so.
• The aforementioned equitable rule has also been incorporated under section 13(1)(a) of
the Specific Relief Act, 1963.
•The law understand this section is based on the maxim of equity ‘Equity regards
Things to be done that ought to be done’.

• Where a person has no right to transfer a property, he should not agree or profess to transfer
any interest in it. Transfer of interest in land is known as grant.
•Provisions of Section 43
Section 43 enacts that-
(i) If a person professes to transfer an immovable property by fraudulently or,
erroneously representing that he has authority to do so and
(ii) The transfer is for consideration, and
(iii) such transferor acquires the authority subsequently,Then the transferee may at his
option compel the transferor to pass on the Property to him:
Provided that the interest of a subsequent transferee for value is protected if he had no notice of
the existence of such option.
Illustration- A, a Hindu, who has been separated from his father B, sells his three fields X, Y
And Z, to C. He represented that all the three fields are under his authority but in real, Z was not
under his authority because he has not retained it during the partition from B. B dies and so A
gets the property Z under his control as he was B’s heir. Z has not rescinded the contract so he
may acquire also property Z from A and A cannot deny giving him the same.

Essential Conditions for the Application of Section 43:

a) The transferor is an unauthorised person.
(b) There is fraudulent or erroneous representation by ‘transferor regarding his right to transfer.
(c) The transfer is for consideration.
(d) The transferor subsequently acquires authority for the transfer.

1.Transferor is unauthorised person—

A person having no title or interest in an immovable property at the date of transfer, is not
entitled to transfer that property. If he transfers the property without authority, the transfer is by
an unauthorised person. In the eyes of law, such person cannot pass on any legal title or interest
in respect of the property transferred by him.Therefore, such person actually does not transfer the
property; he merely professes or, purports to transfer. The legal effect of such transfer would be
that the transteror has promised to transfer a property and the transferee has accepted it.
Accordingly, the transfer by an unauthorised person would mean that ‘there is a contract for the
creation of an interest in future.Subsequently, for some reason or the other, when he obtains title
or interest in that property, he is authorised to make the transfer. This section compels him to
Transfer the property legally which he had professed to transfer without authority.-

2. Fraudulent or Erroneous Representation- .-There must be erroneous or fraudulent

representation by the transferor regarding his authority to transfer the property. In the absence of
such representation this section does not apply. Misrepresentation may either be oral or in
writing or also be in the form of silence or inactivity of the transferor. However it’s necessary
that misrepresentation is in respect of transferor’s authority to transfer the property where the
transferor is unauthorised person for want of title. It does not deal with transferor’s want of
capacity such as minority or insanity.
•It Is essential that the transferee was misled by the representation of the transferor. Whether it is
fraudulent or erroneous but the representation is such that the transferee has believed it and in
good faith acted upon it. Where there is neither any representation regarding the authority to
transfer nor the transferee has acted upon such representation, the transferee cannot claim, the
benefit of this section.

• Pandiri Bangaram v. Kurumoory, A was entitled to one-third share in a joint family property.
He mortgaged half of this property to B. Subsequently when A’s father died he became owner of
half share in the family-property. B, the mortgagee,’ enforced the mortgage against half of the
family-property. It was held that since B knew the fact at the time of mortgage that A was
entitled to only one-third share in the property as he was not misled. Therefore, B could enforce
his mortgage only against one-third share and not against half which A acquired subsequently.
Thus B could not get the benefit of Section 43 .

3.Transfer is for a Consideration- Transfer is for consideration.-Section 43 does not apply to a

gratuitous transfer. Thus, where the transfer is without consideration e.g. gift, the transferee
cannot get the benefit of this section. The section is applicable only to transfers for value. It may
be applied to sale, exchange, lease, mortgage because these transfers are supported with
consideration.

4.The Transferor must acquire the Authority subsequently-

The transferor must obtain the authority of a property in the future or subsequently which he had
promised to transfer when he had no authority or interest.
•The authority acquired may be through transfer
I) inter vivos
II) by the law.
•The property subsequently acquired by the transferor does not pass on automatically to the
transferee. Such subsequent acquisition of interest or authority shall pass to the transferee :
I) at the transferee’s option, and
II) at any time during which the contract of transfer subsist
•But, Section 43 is not applicable to involuntary transfers like auction sales by order of the
Court. Therefore, auction purchaser cannot invoke the provisions of this section for his benefit.

EXCEPTIONS :
1. Bonafide subsequent transferee- The proviso of the Section limits the scope of applicability
of the section and provides that the transferee cannot enforce his claim against a person who has
taken a subsequent transfer from the transferor in good faith for consideration, and without
notice of the option vested in the transferee. He can only rescind the contract and sue the
transferor for the recovery of the consideration.
•If the subsequent transferee has notice of the option, he cannot claim the benefit of this section.
He will be deemed to have had notice of the existence of the option if he had knowledge of the
previous transaction.

2.Transfer void ab initio

This exception is a continuation of section 10 of the Indian Contract Act, 1872, which broadly
states than in case any contract is for unlawful consideration or object then the transfer itself will
be considered as void. In a situation where the matter itself is invalid or against public Policy the
transaction will not be protected under section 43 of the act.
•For instance, if a deed that gave tenancy rights to a person is invalid since its inception due to
the existence of another deed of tenancy, no protection could be claimed by the alleged
subsequent tenant under Section 43 of the Act.

3.Knowledge on part of the transferee about the title

If both the transferor and the transferee know about the true situation and collude to enter into a
transaction which is invalid in law, knowledge of the transferee becomes material and Sec. 43
cannot be availed by him. This exception aligns with the first essential that is listed above which
requires any ‘fraudulent or erroneous’ representation on part of the transferor.

CONCLUSION
Though the doctrine given under section 43 of the Transfer of Property Act, 1882 is based on
English common law yet it is quite different in its application. The English common law is based
on equitable acquisition of the estate while the Indian doctrine is based on the right obligation
and not equitable acquisition of the estate. Under English law, the transfer gets automatically
transferred to the transferee when all the conditions are satisfied while under Indian law, the
transfer doesn’t takes place automatically and is based upon the discretion of the transferee.
Thus we can conclude that though the act was drafted and passed during British Raj and the said
Section has been inspired from English law, yet section 43 was made according to the Indian
circumstances and has not fully adopted the English common law.