Important Doctrines

Notes on Doctrine of Notice, Part Performance, Lis

Pendens(Transfer of Property pending suit),
Fraudulent Transfer uploaded seperately
 Valid Transfer – Title of
•
Transferor
The requirements of a valid contract and valid transfer have
already been discussed under S. 5, the most important is
that the title of the transferor should have legal marketable
title to the property. A person having a defective or no title to
the property cannot pass on a better title to purchaser than
what he has and the purchaser will acquire defective or no
title.
There are certain exceptions to this which are dealt in
Transfer of Property Act. They are transfer by:
– Ostensible owner (Doctrine of Holding Out) (S. 41)
– Unauthorised person who subsequently acquires valid
title. (S. 43)
– The person authorized under certain circumstances only or
Transfer by persons having limited powers (S. 38)
 Implied Transfer by Limited
Owners (S. 38)
• Various laws have prescribed limited rights to
certain individuals to transfer that property, though
they are not owners. Such transfers have to be
done only under special circumstances enunciated
in respective laws. Section 38 deals with this
situation. Some of such persons are
– The Kartha of a Mithakshara family
– Executor
– A mortgagee
– A guardian of minor’s property.
• It provides that where a transferor has limited power to transfer
the immovable property, only if certain circumstances come into
the picture then, transfer can only be made when such
circumstances actually arise.
• It further states that where a person transfers a property on the
ground of the actual existence of such circumstances then the
transfer shall stand valid even if such circumstances are not in
existence.
• The specific circumstances under which such person have
authority to transfer the property is generally the ‘legal necessity'
which may differ or vary from case to case.
• If these persons as transferor allege the existence of such
circumstances and the transferee has made an inquiry and after
using reasonable cares has acted in good faith then it shall be
sufficient and transferee will get a good title to the property.
• In case of sale of minor’s property by his natural or
legal guardian there should be a legal necessity for
the transfer itself and court permission is necessary
for any sale. The burden in all such cases is laid on
the transferee to justify the transfer in his favour.
The reason for this rule is that no transferee of
immovable property can safely take a transfer of
such property without enquiring into the title of the
person who is his proposed transferor. If the latter’s
title is perfect, then the question of enquiry
becomes immaterial. But if it was dependent upon
variable circumstances, then the transferee must
justify his transfer.
 Transfer of Property out of which
maintenance claims have to be met (S. 39)
• It is an extension of limitation under S. 38.
• Sec 39 of Transfer of Property Act, provides that a person
shall not transfer the immovable property without the
concurrence of wife and children who have a right to receive
maintenance or a provision for advancement or marriage for
the profits of immovable property. In case such property is
transferred without concurrence it is not that transferee will
not get a title, he will get a title but he is liable to give
maintenance from the profits of immovable property which he
acquired, and settle any other claims if he has notice of such
rights or claims. In case if such transfer is gratuitous such
rights or claims can be enforced against transferee.
• In case of wife and children of transferor have
right to maintenance over the transferred
property then such wife and children are entitled
to enforce right to maintenance against such
transferee on that transferred property, u/s 39 or
Transfer of Property Act. But this right is not
exercisable against transferee for consideration
and in cases where transferee does not have
notice of such right.
 Ownership by Holding out - Transfer of
property by an ostensible owner (S. 41)
• 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 McQueen, (1872) 11 Beng
LR 46, p 52. by the Judicial Committee.
Ramcoomar 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 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.”
• 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.
Remaining notes on Section 41 are being sent in a Word file.
Feeding the Grant by Estoppel (S 43)

• Section 43 of Transfer of Property Act

1882 : "Transfer by unauthorised
person who subsequently acquires
interest in property transferred”
• Based on the following Principles: 
• Common law doctrine of estoppel by deed
• Equitable principle –if a person promises
more than he can perform ,must fulfill the
promise when he gets ability to do so.
 Essentials of Section 43
1. The transferor makes a false representation that he’s authorised to transfer
a certain immovable property
2. This representation may be erroneous or fraudulent
3. The transferor professes to transfer the property;
4. For consideration;
5. The transferee enters into a contract, acting on that representation;
6. The transferor, later on, acquires some interest in the property while the
contract is subsisting.
7. The transfer would operate on any such interest acquired, at the option of
the transferee.
8. Provided that, there is no subsequent bona fide transferee, who has
entered into the transfer without having any notice of the earlier contract
between the transferor and the prior transferee.
• The doctrine of feeding the grant by estoppel is
based on the maxim ‘nemo dat quod nonhabet
which implies that no one can give to another,
which he himself does not possess’.
• This general rule lays down that no property can be
transferred by any person who is not authorised to
do so. Thus if a person does not have a title to
property, he cannot validly transfer the same to
another. But this rule has been relaxed in practice
due to “adjustment of equities” between such
person and the transferee. One of such exceptions
to this rule is provided in sec. 43, T.P. Act. The
doctrine of feeding the grant by estoppel compels a
man to perform when the performance becomes
possible.
• The Rule of Estoppel signifies that when a person
makes a promise to another person, which is more
than what he can perform or which he is incapable of
performing, then he cannot later on claim
incompetency as a legitimate excuse when he
acquires the competency to fulfil his promise.
• In simple words, he, later on, cannot claim
incompetency to avoid his liabilities. Such a person
would be compelled to fulfil the promise when he
acquires the competency to perform it. This
competency feeds the estoppel.
• Also, the transferee must show that some
representation was made to him, which may (not
must) be erroneous or fraudulent.
• Acting on the representation made by the transferor depicts
the lack of knowledge on the part of the transferee. Hence,
for there to be a representation, it is material that the
transferee should be unaware or should not have the notice
of the lack of competency on the part of the transferor to
enter into the transaction.
• In a case where the transferee knows about the defect in the
title of the transferor at the time of the transfer, Section 43 or
the Rule of Estoppel would not apply.
• Absence of knowledge on the part of the transferee about
the defect in the title of the transferor also means that the
transferee took reasonable care to protect his interest and
then believed the title of the transferor should be good.
Hence, it is a duty on the part of the transferee to inquire
before entering into the transaction as to the title of the
transferor and protect his own interest.
• Example: A represents to B that he is
authorised to transfer the property X whereas in
reality he is not and professes to transfer the
same. Acting on that representation B provides
consideration for the same. Now the transfer is
inoperative as A had no authority to transfer the
property. But later on, A acquires the property
under the will of his Uncle, who was the owner of
the property.
• Now A can be compelled to complete the
transfer. He cannot plead the transfer to be
inoperative on the grounds that he had no
authority at the time of transfer.
• Section 6 & section 43 
• Acc. To s.6(a) ’chance of heir apparent’ to get the property in future is a
non transferable right (void ab initio however s.43 validates transfer made
without title when the transferor subsequently acquires the property.
• Jumma Masjid v.Kodimaniandra deviah (1962) supp(2) SCR 554-  No
conflict between s.6 & 43 both can operate simultaneously 
• Facts- heir apparent sold his would be share in joint property to M for Rs.
300, became entitled to property later-M invoked S. 43,other part
contended its void ab initio  Held –M entitled to get protection and SC
observed that S.6(a)- rule of substantive law & s.43 based on estoppel
(rule of evidence)
• Thus, S. 6 (a) would be applicable generally and the transferee will not
have a remedy if the transferor does not become entitled to the said
share. However, in case transferor becomes entitled the doctrine of
feeding the grant under s. 43 will become operative if the essentials are
met.