DOCTRINE OF NOTICE

MEANING

• Notice means knowledge or

information of a fact . Where a
person has knowledge of any fact
or it could be proved that under
the circumstances, he must have
knowledge of that fact, he is said
to have notice of that fact. This
knowledge of the fact is binding
on the person. He cannot deny the
knowledge of that fact if it goes
against him.
 Three types of notice

Types of 1) Actual Notice

Notice 2) Constructive

3) Imputed
Actual or Express

• Actual notice means direct or express

knowledge or information about something.
Actual notice is a matter of fact. That is to
say, whether a person has actual notice of a
fact or not can itself be proved or disproved on
the basis of certain other facts.
Requisites of Express Notice

1) DEFINITE INFORMATION:

• The knowledge or information must be definite .

It must not be hearsay or rumours. If a person
comes to know about certain facts by way of
rumours , this knowledge is not legal because no
person is bound to take notice of rumours .
Unless the mind of the person has in someway
been brought to an intelligent appreciation of
the nature of thing, there is notice.
2) Knowledge of parties

• Only the knowledge of the parties Interested

in the transaction is actual notice regarding
that transaction. Knowledge or information of
any other person who is stranger to the
transaction is no notice. (Aashiq v.
Chaturbhuj)
3) Related to Transaction

• The knowledge or information must be about

or related to the transaction in question .
Knowledge of something which is not relevant
for a transaction cannot be taken to be actual
notice for that transaction.
4) Cases Ref.

• Weymouth v. Bayer
Vague or general reports or mere existence of suspicious circumstances
is not in itself a notice of matter.

• Ashiq v. Chaturbhuj
Notice must be binding and must proceed from a person interested in
thing.

• Warrick v. Warrick
Notice is knowledge of fact.
Constructive Notice

• Doctrine of constructive notice is based on

equity. Where a person is bound to make an
inquiry and fails to do it, should be held to
have notice of all facts, which would have
come to his knowledge had he made an
inquiry.
• Where a person is not bound to have an
inquiry, he cannot be charged of constructive
notice.
• Notice in the Eyes of Law
Legal Presumption

• Legal presumption can be taken by the court under

following circumstances:

• 1) wilful abstention from an inquiry

• 2) Gross negligence
• 3) Registration as notice
• 4) Actual possession as notice of title
• 5) Notice to agent is notice to principal
• 6) State of Property
WILFUL ABSTENTION

Wilful abstention from an inquiry or search means deliberately avoiding to

take notice of a fact which a reasonable man would have taken in the
normal course of life .If a person refuses to accept a registered envelop
addressed to him , it is his wilful abstention from taking notice of the
contents. In such a situation law presumes that must have knowledge that
the contents of letter are against his interest , because of which he is
avoiding the letter.

Case: Bank of Bombay v. Suleman

GROSS NEGLIGENCE

Negligence means carelessness. It is the omission to do something which a reasonable man guided
by those considerations which ordinarily regulate the conduct human affairs. Mere negligence or
carelessness in taking notice of fact is not gross negligence . But if the negligence is so grave or
gross that a man of common prudence can never be expected to do, the negligence is gross. It is
carelessness of grave nature but without any malafide or bad motive.

Hudson v. Viney

Jones v. Smith

Imperial Bank of India v. U. Raj Gyaw

Lloyds Bank ltd vs P.E
Guzder&CO.

• FACTS: G. deposited the title deed of his

property with a bank N to secure his
overdraft(loan from bank). This was therefore,
mortgage by deposit of title deed in which the
only security of repayment of loan was the
possession of the title deed by the person who
gave money. After some time G asked the bank
N that he was intending to sell the property and
the purchaser wants to see the title deed and
after inspection by the purchaser he would
return the same to the bank.
Contd.

• Contd…the bank N relying upon this statement

gave title deed to G . But G after receiving the
title deed deposited it in another bank L and
took another loan. THE question arose whether
the prior loan given by N was to be secured
first or the second loan given by L .
• HELD: it was held that the bank N has
committed a gross negligence , N cannot be
allowed to plead that it has no notice .
Status of Municipal Taxes

Liability of subsequent purchaser to pay municipal taxes?

Nawal Kishore v. The Municipal Board,Agra

Municipal Board Lucknow v. Lal Ramji Lal

Municipal Board, Kanpur v. Roop Chand Jain

Ahmedabad Municipal Corporation v. Haji Abdul

Registration as Notice

• Explanation of section 3 provides that

registration of a document is notice of all the
facts stated in that document. Where a
document has been registered , it is presumed
that all the persons concerned have
constructive notice of material facts affecting
the property , which are apparent in deed or
which can be reasonably inferred from the
contents. IN PUNJAB IT IS NOT OPERATIVE.
Cases Ref.

• TILAKDHARI LAL V. KUNDAN LAL,1921

• BOMBAY AND ALLAHBAD HIGH COURT(1908-
1916)
• CALCUTTA HIGH COURT (1908-1916)- FACTS AND
CIRCUMSTANCES
• MADRAS HIGH COURT-(1908)

[AMENDED IN 1929 AND REGISTARTION OF

INSTRUMENTS OF I.P. WERE MADE COMPULSORY]
Conditions for registration as notice:

• 1) Registration is notice of only those documents

which are compulsory registerable.(s. 17 of RA)-
Harendra Nath Dutta Roy v. Rajendra
• 2) Registration amounts to notice only when all
the formalities prescribed under the registration
act are duly completed . (S.51 and S.55 of RA)
• 3) Registration is Constructive notice only for a
subsequent transferee. It does not amount notice
for former transferees.
Harendra Nath case
Actual possession as notice of
title

• Actual Possession of an immovable property is regarded as

constructive notice of such title which the person in
possession may have. Explanation II to section 3 provides
that any person acquiring any immovable property shall be
deemed to have notice of the title. (Exception:- Bonafide
Purchaser without Notice, Ram Niwas v. Bano,2000)
• Rule was laid down for the first time by privy council in
case of Daniels v. Davison
• IILUSTRATION: A contracts to give partial rights on a land to
B for Rs 5000, B takes possession of land, Afterwards A sells
it to C for Rs 6000, C makes no inquiry of B . B possession is
sufficient to affect C with the notice of his interest.
Ram Niwas v. Bano
Three Conditions:-

• Property should be in possession of a person other

than the owner.
• Possession must be actual and not constructive
• The actual possessor should be in lawful occupation
and of whole of the property or substantial portion
of the property. If, he is in occupation of a small
portion of property, then there is no duty on the
prospective purchaser to inquire about him
(Kesharmull Agrawala v. Rajendra Prasad,1968,
Daniels v. Davision,1809)
I- Property should be in possession of a person other than the owner.
II-Possession must be actual and not constructive
III-The actual possessor should be in lawful occupation and of
whole of the property or substantial portion of the property.
Kesharmull Agrawal v. Rajendra
Prasad
What is contract of agency?

• Given under section 182 of Indian Contract Act

• Based on the maxim that “ He who does through
another, does by himself”
• Agent is different from servant.
• Agent represents his principal in dealings with 3rd
party
• Contract entered into by an agent on behalf of
principal is presumed to be contract entered by
the principal himself and he is bound by the
contract
Contd.

• Who can employ an agent?

• Who can be employed as an agent?
• Types of agent: General, Universal , special,
mercantile and non-mercantile
Conditions for applicability of this rule

• 1) Notice must be acquired by a person as an agent

, not in any other capacity
• 2) It is imputed notice to principal only with regard
to the particular business or transactions for which
agent has been appointed.
• 3) Notice must be acquired by an agent during the
course of agency.
• 4) Notice must be relevant to transactions
• 5) Notice must not be fraudulently concealed by
the agent.
Exception of doctrine of constructive notice

• The doctrine of Notice is an equitable doctrine

. It protects the interest of transferee for
value without notice . There might be
transfers in which there is some legal defect
and the transfer is void . Under a void transfer
of property the transferee cannot get any
interest, But if it could be proved that
transferee was a transferee for valued(paid
money) and he had no notice of the legal
defect, the equity shall protect his interest
Difference between actual and
constructive notice

A notice may be actual , express , implied or

constructive. A direct notice or express notice
are varieties of factual notice. This is a matter
of fact. A constructive notice on the other
hand, is not any of the above . It is presumed
or implied. It based on equity. It is inferred
from circumstances .
Thank you