DR.

RAM MANOHAR LOHIA NATIONAL

LAW UNIVERSITY, LUCKNOW

PROPERTY LAW-I
Project
On
The transferee has acted in good faith, taking reasonable care to
ascertain that the transferor had power to transfer, is essential to
invoke the application of section 41.

Submitted to:

Submitted by:

Dr. Radheshyam Prasad

Sakshi

Asst. Professor (Law)

B.A.LL.B (V SEM.)
Enrollment no. - 140101111

ACKNOWLEDGEMENT
A major research project like this is never the work of anyone alone. Firstly, I would like to
thank my teacher Dr. Radheshyam Prasad, for giving me such a golden opportunity to show
my skills and capability through this project.
This project is the result of the extensive ultra-pure study, hard work and labour, put into to
make it worth reading. This project has been completed through the generous co-operation of
various persons, my teacher, and my seniors, who, in their different potentials helped me a lot
in giving the finishing touch to the project.
This project couldnt be completed without the help of my universitys library Dr. Madhu
Limaye Library and its internet facility.

Thank you..

TABLE OF CONTENTS
1. Introduction
2. Burden of proof
3. Essentials to invoke application of section 41
Transferee must take reasonable care
Transferee must make proper inquiries
Transferee to act honestly and in good faith
4. Important Case laws
Mazhar Hasan and Ors. Vs.Mukhtar Hasan and Anr.
Pratap Chand v Saiyida Bibi;
Laxman Sakharam Salvi v. Balkrishna Balvant Ghantage
Khwaja Muhammad Khan v. Muhammad Ibrahim and Ors.
Gurbaksh singh v Nikka singh
Mt. Hakiman V. Mt. Badr-un-nisa and Anr.
5. Conclusion
6. Bibliography

INTRODUCTION

Section 41 talks about transfer of property by ostensible owner. Ostensible means apparent
or seeming. An ostensible owner is a person who apparently or seemingly appears to be the
owner, though in reality he is not. His behaviour and conduct appears to be that of the owner

of the property with the consent or conduct of the real owner.1 That person can be anyone
sister, brother, son, benamidar can also be ostensible owner when property is held by one
person and amount for it is provided by other etc. For example: on the death of father, the son
and daughter inherit the property. He is person having all indicas of ownership having being
real ownership2 except ownership. Ostensible owner is not the real owner but who can
represent himself as the real owner to the 3 rd party for such dealings.3 He has acquired that
right by the will full neglect or acquiesces by the real owner of the property thereby making
him an ostensible owner. If real owner authorises ostensible owner to deal with the property
then it becomes a rule of estoppel against real owner afterward he cannot refused to accept
such transfer. 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.
But one of the most essential requirements of this section is that ostensible owner must get
right to transfer with the consent of real owner. It is not necessary that real owner should
make transfer w.r.t particular transfer but it is sufficient if ostensible owner is authorised by
real owner to make transactions or deal with property.4 The possession and ostensible
ownership must be with the consent of the real owner of the property. The real owner must
also be capable of giving consent to the transfer and should have given it with free will. 5 The
transferor should be shown to have been the ostensible owner with the express or implied
consent of the true owner but the transfer itself need not be with the consent of the true
owner.6 In the case of minors, even if the ostensible owner claims that he has the consent of
1 Page no. 178, 2nd ed., Ponam Pradhan Saxena, Property law.
2 Kannashi Vershi v. Ratanshi Nenshi, AIR 1952 Kutch 85
3 supra
4 Darashaw J. Vakil, the transfer of property act, 2nd edition

5 Gurcharan Singh v Punjab State Electricity Board Patiala, AIR 1989 P&H 127
6 Fazal Hussain v. Mh Kazim, AIR 1934 All 193

the minor; it will be held to be no consent as minors do not have any capacity to give the
required consent.7 Consent need not to be express or in writing, it includes implied consent as
well. This consent of real owner does not include an intention to deceive the transferee on
part of the real owner; nor is it essential to prove the same.8
Transfer of property by an ostensible owner is a concept which was incorporated to protect
the rights of innocent third parties vis--vis the property owner. The principle protecting a
transferee applies only where the transfer is for consideration. A gratuitous transfer is not
protected. Thus the principle does not apply in case of gifts.9
BURDEN OF PROOF
The burden of proving that the transferor was an ostensible owner is on the transferee who
seeks the protection under section 41. He has to prove that transferor is an ostensible owner 10
and that transferee had acted in good faith, and with reasonable care.11
Transferee is the one who is most affected of this transaction by ostensible owner in case if
real owner refuse to accept that authorisation to ostensible owner or if any person transfer the
property not being as an ostensible owner but showing himself as such or in any such. So in
order to get protection under this section it is duty of the transferee to inquire about title of
ostensible owner, take reasonable care to ascertain that the transferor had power to make the
transfer. This duty is same as caveat emptor. Duty to prove fraudulent intention of the
transferor is on the transferee. He must also prove that he took reasonable care to protect his
interest.12

7 Abdulla Khan v Bundi, (1912) ILR 34 All 22

8 Shorilal v. Damodar, AIR 1938 Lah 86
9 Page no. 183, 2nd ed., Ponam Pradhan Saxena, property law.
10 Abbas Bandi v Syed Mohamad, AIR 1929 Oudh 193
11 Gurbaksh singh v nikka singh, (1963) 1 SCR 55 supp
12 Suraj Ratan Thirani v Azamabad Tea Co.,AIR 1965 SC 295

So we can say that in order to invoke the application of section 41 of TPA it is essential that
transferee must ascertain with reasonable care and in good faith that transferor has power to
make the transfer. Transfer by ostensible owner shall not be voidable on the ground that the
transferor was not authorised to make it if real owner or person who has interest in the
immovable property has given consent to transfer and person purchasing it had make
reasonable and proper inquiry in good faith that transferor was authorised to make this
transaction. If transferee wants protection under section 41 then he must take reasonable care
with good faith to ascertain authority of ostensible owner.

ESSENTIALS TO INVOKE APPLICATION OF SECTION 41

1. Transferee must take reasonable care

Lindley, l.J., in Bailey V. Barnes 13 indicates what is meant by Reasonable Care in the
section. A purchaser of property is under no legal obligation to investigate his vendors title.
But in dealing with real property, as in other matters of business, regard is had to the usual
course of business; and a purchaser who will fully departs from it in order to avoid acquiring
a knowledge of his vendors title is not allowed to derive any advantage from his wilful
ignorance of defects which would have come to his knowledge if he had transacted his
business in the ordinary way.
To get protection under section 41 means to refrain transferor from making transfer voidable,
it is burdened on the part of transferee to take reasonable care in order to ascertain the title of
transferor. A transferee who does not take reasonable care to inquiry and omits to inquire into
the title is not protected by this section.14 It is essential to show that the transferee had taken
such reasonable care15 as an ordinary man of business would take16. Reasonable care is such
13 (1894) 1 Ch. D.25
14 Nageshar Prasad v Raja Pateshri, ( 1915) 20 cal WN 265
15 Gurcharan Singh v. Surjit Bihari Paul; AIR 2006 P&H 18, Zungabai v. Bhawani,
(1907) 9 Bom LR 388
16 Kanhu lal v. palu sahu, (1920) 5 Pat LJ 521

care as a person of ordinary prudence would take in the absence of some specific
circumstances which would have been the starting point of an inquiry which might be
expected to lead to some result.17 But it is not possible to lay down any general rule regarding
the nature of enquiry to be made by the transferee which may be called as 'reasonable care'
for all the cases. The standard of enquiry expected from the transferee depends upon the facts
and surrounding circumstances which may vary according to the different circumstances of
each case.18 However, the enquiry made by the purchaser must be diligent and not superficial
or casual. It is always a duty imposed on the transferee to be vigilant and protect his own
interest. Transferee has to make inquiries into the title of the transferor unless the title is very
clear, and he cannot absolve himself by stating that he entrusted this duty to his solicitor or
relied merely on the entries in the revenue19 or khewat municipal and police registers.
In Nageshar Prasad v. Raja Pateshri, A was the real owner of the property. In the revenue
records, instead of As, name of B was entered by mistake. B mortgaged the property to C
who accepted the mortgage relying on the revenue register. A denied the transfer on the
ground that B was not authorized to mortgage the property. C claimed the benefit of this
section on the ground that he had taken reasonable care in ascertaining the title of B by
inspecting the revenue records. The Privy Council held that since he had not exercised
reasonable care in enquiring about the authority of B, he cannot get the benefit of this section.
The court observed that if C had made further enquiries, he could have found that Bs name
was entered into the register by mistake and A had already raised an objection against the
wrong entry of Bs name in the register.
But for conducting inquiry, transferee must have some clue about dispensary transfer. If he
believe everything legal and normal in his sense as of ordinary prudent person and do not
proceed with the inquiry, he cannot be denied protection under section 41. There should
always be some starting point of inquiry which would have led to some result 20 or something
17 Macneil & co. v. Saroda Sundari Debi, AIR 1929 Cal 83
18 Beyas Singh v. Ram Janam Ahir, AIR 1961 Pat. 16
19 Pratap chand v Saiyida Bibi, (1901) ILR 23 All 443
20 Ratan v Suraj, AIR 1944 All 1, Natabar Parichha v Nirmal charan, AIR 1952
Orissa 75(80)

abnormal to start the inquiry such as discrepancy in the sale certificate between the
description of the property by its name and delineation by boundaries 21, the possession of
land by a person other than the owner, or where the transferor is the karta of joint Hindu
family, or where transferor acquired property through a will and there is possibility of other
sharer being present or where the transferor was a Muslim. If there is not starting point of
inquiry or clue to suggest that transferor is not the real owner, there is no duty to inquire
further but if he makes inquire and finds out the defect, yet proceed to take the transfer in his
favour, he will not be protected for want of good faith.22
PROPER INQUIRIES
In case of transfer of property by ostensible owner transferee need to make a proper inquiry
into the title of the ostensible owner as transferor. If property is transferred by ostensible
owner but A is the real owner, A cannot further reject the transfer on the ground that
transferor was not authorised by him to make transaction but to safeguard his interest
transferee must show that he made proper and reasonable inquiry regarding the title of the
transferor. A finding on a question whether the transferee had made proper inquiries before
the purchase is a question of fact23 but from that finding it can be said that reasonable and
sufficient inquiry was made by the transferee as to attract the application of the legal
provision is a question of law24. Whether transferee took reasonable care to ascertain that the
transferor had power to make the transfer has to be determined with reference to the
circumstances of particular case.
Only such persons are entitled to claim protection under section 41, who despite the inquiry,
have not been able to discover who the real owner of the property is and who have full belief
that the person making a transfer in their favour is really entitled to that property.25 Where the

21 Himanprastha Financiers v UOI, AIR 196 HP 29

22 Hakiman v Badr-un-Nissa, AIR 1934 Lah 658
23 Siddappav vishwa, AIR 1943 Bom 419
24 Chandi Prasad v gadadhar, AIR 1949 cal 666
25 Jugmohan v. Inder Prasad, AIR 1929 Oudh 160

transferee did not make any enquiry about the other co-heirs of the deceased before taking
purchase from one heir, he was held not to entitle to protection of section 41.26
To get the protection under section 41 of TPA, transferee must show that he make reasonable
and proper inquiry into the title of transferor. If he do not inquired properly about the title of
the transferor and he comes out not authorised by real owner to transfer then real owner has
liberty to make void or valid transfer. If transferee has made reasonable inquiry then real
owner is duty bound to make transfer successful.

2. Transferee has acted in Good Faith

Good faith means the bonafide intention, i.e. the transferee had acted honestly and in the real
belief that the ostensible owner was the real owner. In order to protect his interest, transferee
needs not only to show that he made reasonable and proper inquiries but must also
established that he has acted in good faith & honestly. He cannot afford to ignore true facts
such as defect in title or be guided by misconceptions. Where a person purchases property
with full knowledge that the transferor is merely an apparent owner his intention is not bona
fide and there is no good- faith on his part. Reasonable care is not enough if there is absence
of good faith. However if the purchaser acted in good faith and by the conduct of the other
party a belief is induced in the mind of the purchaser that they have consented to the sale, the
purchasers are entitled to protection. The rule of law is that who seeks equity must do
equity, thus the protection of this section is available only for that person whose own
conduct is just and equitable means who must himself made an inquiry and acted in good
faith. Even after making inquiry he chooses to ignore, he would not get protection under this
section. When a man purchased a possessory title believing in good faith that his vendor was
the real owner, and any inquiry that he could have made would only have confirmed him in
that belief, the court held he was protected by this section. 27 In the absence of good faith the
court will presume collusion between the ostensible owners and the transferee. For example,
where the real owner and the transferee lived in the same village and the transferee was
acquainted with the circumstances of his family, even then he purchased the property from

26 Suraj Ratan Therani v. Azamabad Tea Co. Ltd, AIR 1955 NUC 2867
27 Chandra kanta v bhagjur, 1 IC 525

some other person; the court was slow in believing the good faith of the transferee. 28 When a
person brought a property belonging to a female, who had been outcasted for unchastity,
believing that her interest was forfeited, he was not protected by this section.29
Both reasonable care and good faith are essential to get protection under this section. 30 This
section is not limited to the immediate purchaser from as ostensible owner, but extends to
subsequent purchaser also. Even, if the immediate purchaser had notice, yet the ultimate
purchaser, if he purchases bona fide and with reasonable care, is protected.31
In Qandhara Singh v UOI32, the plaintiff migrated to India from Pakistan during partition. He
had left some land in Pakistan and in lieu of that land he was allotted land in India. It was
found later on that some part of the land left by him in Pakistan was mortgaged to Muslims. A
notice was served on him to pay the mortgage money back but he did not. Therefore, a part of
the land allotted to him was auctioned. Both the defendants and plaintiff took part in the
bidding. The defendants got the land in auction but the plaintiff did not challenge the order of
the auction in appeal. This conduct of the plaintiff was enough to create a belief in the mind
of defendants that he consented to the auction sale and, therefore, the purchasers acted in
good faith in purchasing the land at the time of auction.
The duty of the transferee is to act in good faith and to ascertain the authority of ostensible
owner to transfer it and not to ascertain the nature of the property sought to be transferred. 33
Where another person is in possession of the property purchased, and the plaintiff was aware
of it, but does not make further inquiry as to how and why the transferor was transferring the
property which was not in his possession, the plaintiff cannot be said to have acted in good

28 Gurbaksh Singh v. Nikka Singh, (1963) sup 1 SCR 55

29 Angammal v venkata
30 Khwaja afzal v md saheb
31 Gholam Siddique v jogenddra nath, (1926) 31 Cal WN 205
32 AIR 1984 P&H 51
33 Ashrafi Devi v. Trilokchad, AIR 1965 Punj 140

faith taking reasonable care to ascertain the real owner, and is not protected by S. 41.34 When
the red entry in the Jamamandi register showed that the land could not be transferred to a
non-scheduled case for a period of 20 years in view of statue bar, and yet the vendee
purchased the land, he would not have acted in good faith.35
Transferee must be deemed to have notice that the real title was in the person in actual
possession. If with such statutory requirement the plaintiff did not make enquiry as to the
factum of possession, he could not be said to have acted in good faith taking reasonable care
to ascertain the real owner. Once the properties are found in the possession of third person at
the time of sale, the transferee is under the obligation to take reasonable care to ascertain as to
how and why the transferor was transferring the properties of which he was not in
possession.36
Where there was no proof adduced by the transferee to established good faith or that
necessary enquiries were made before entering into the transaction of sales, protection under
section 41 TPA, 1882 was held not available.37
Plea that he acted in good faith and taken reasonable cannot be raised first time in appeal or
second trial, transferee must take it in the trial court itself. If transferee does not raise the
plea of bonafide transferee for good faith in written statement, did not press the plea before
the trial court, nor even rose in the first appeal, he was not allowed to raise the plea for the
first time in second appeal.38

IMPORTANT CASES
1. Mt. Hakiman V. Mt. Badr-un-nisa and Anr.
34 Laxman Sakharam Salvi v. Balkrishna Balvant Ghantage, AIR 1995 Bom 190
(192, 193)
35 Jit singh v piara, AIR 2003 P&H 258
36 Madhab Shau v Hatkishore Shu, AIR 1975 Ori 48
37 Shiv Dass v devki, AIR 1978 P&H 285
38 Satish Chandra maity v saila bala dassi, AIR 1978 Cal 499

Facts: Nazir Ali died in 1905, leaving a son Zahir Ali by his first wife and Mt. Hakiman his
second wife. The subject matter of this litigation is a house at Delhi which was left by Nazir
Ali. It was sold on 22nd March 1926 by Zahir Ali to the first defendant Mt. Badr-un-nisa. The
suit is by Mt. Hakiman for one eighth shares by partition on the ground that she is a co-heir
with Zahir Ali of the estate of Nazir Ali. In 1926-Hakiman had sued Zahir Ali for a share of
the rents collected by him on account of 'this house and won a decree for her one-eighth share
thereof. The plaintiff's present suit was decreed in the trial Court, but on an appeal by the
defendant vendee the learned District Judge-has dismissed the suit and the plaintiff now
comes here on second appeal.
The learned District Judge has held that the conditions of Section 41 of the Transfer of
property Act are fulfilled and provide a bar to the plaintiff's suit and he has recorded findings
that (1) Zahir Ali was holding himself out as the ostensible owner of the property (2) the
vendee took reasonable care to ascertain that the vendee had power to make the transfer and
(3) that the vendee cannot be said to have acted negligently.
Held: The definition of "good faith" in the General Clauses Act 10 of 1897 is a thing shall be
deemed to be done in good faith where it is in fact done honestly whether it is done
negligently or not. A person may act without negligence but at the same time without honesty.
The vendee may have made a reasonably careful enquiry and may have ascertained the true
facts, but chosen to ignore them. The onus lay on the defendant vendee to establish her
honesty and good faith in order to bring her action within Section 41 and that it was not
sufficient to establish merely that she made an inquiry. There is no evidence on the record to
establish this. Until and unless it is hold that all the conditions of Section 41 are fulfilled,
transferee cannot get protection under this section. Court accepts the appeal and setting aside
the judgment & decree of the District Judge dated 8th November 1932 and restores the
preliminary decree of the trial.
2. Gurbaksh singh v Nikka singh
Facts: Appeal was filed by the Gurbaksh Singh. There was a land in village which belong to
number of co-shares including Teja Singh and JhandahaSsingh. There were partition among
these co-shares and mutation after the partition was applied to revenue authorities. There was
some mistake in the numbers of shares of the property in the record as according to the
application for mutation they applied for 1/8 share in favour of teja singh and 7/8 in favour of
Jhandaha singh but in the document all shares were in the name of teja singh alone. One of

the co-shaes applied to the revenue authorities for correction. Revenue authority corrected
their mistakes and they found that teja singh had died and all his shares are in favour of Mula
singh (Teja sings heir). After Jhandha Singh had filed the application for correcting the
mutation, Mula Singh executed a sale deed conveying the said land in favour of Gurbaksh
Singh, the appellant, i.e., on the very date when Mula Singh had to appear before the
Revenue Authorities. Jhandha Singh in his turn sold his 7/8 share, to Gopal Singh from whom
Nikka Singh, the first respondent, purchased the said share. The appellant filed a suit under s.
117 of the Punjab Land Revenue Act, 1887, out of which the present appeal arises, in the
revenue court for a declaration of his exclusive title to the said two Khasra numbers, and in
that suit Nikka Singh, the first respondent, and Mula Singh, the second respondent, were the
defendants.
District Judge did not give any definite finding on the question of title, but he dismissed the
appeal on the finding that the appellant was a bona fide purchaser in good faith.
HELD:
The general rule is that a person cannot confer a better title than he has. This section is an
exception to that rule. Being an exception, the onus certainly is on the transferee to show that
the transferor was the ostensible owner of the property and that he had after taking reasonable
care to ascertain that the transferor had power to make the transfer, acted in good faith. In this
case the facts are tell-tale and they establish beyond doubt that the appellant had the
knowledge that the title of his transferor was in dispute and he had taken a risk in purchasing
the same. The appellant and Mula Singh belong to the same village Kot Syed Mahmud. Mula
Singh sold his property to the appellant on the very date on which he had to appear before the
Revenue Authorities. Though the sale deed was executed on October 24, 1934, the
consideration was actually paid only three years thereafter i.e., on October 22, 1937. The
appellant also took a security bond from Mula Singh to indemnify himself against any loss
that might be caused to him in the property in dispute. These facts show that the appellant had
knowledge of the defect in the title of Mula Singh. It is, therefore, not possible to hold that he
had purchased it in good faith.
The High Court, having regard to the aforesaid circumstances, held that the appellant knew
that the transaction was in respect of a property of which the title was extremely doubtful.
There are no permissible grounds for challenging the correctness of that finding before us in
an appeal under Art. 136 of the Constitution.

3. Khwaja Muhammad Khan v. Muhammad Ibrahim and Ors39.

Facts: On the 30th of July, 1892, one Khwaja Muhammad Khan purchased in the name of his
son, Rustam Ali, a plot of land measuring 2 bighas 12 biswas for the sum of Rs. 600. Rustam
Ali was at that time of full age. Subsequently a house was built upon that piece of land, which
was occupied from time to time by Rustam Ali, and Rustam Ali was recorded as the owner of
the house. On the 11th of February, 1897, Rustam Ali borrowed Rs. 8,000 upon the security
of the house and its site, and executed a deed of mortgage in favour of Muhammad Ibrahim
and Muhammad Yusuf. In 1899 the mortgagees instituted a suit for sale on their mortgage
and obtained a decree for sale on the 31st of August, 1899. Thereupon Khwaja Muhammad
Khan filed the present suit against the mortgagees, in which he asked for a decree declaring
that the mortgaged property was not the property of Rustam Ali, the judgment-debtor, and
could not be sold in execution of the defendants' mortgage decree.
HELD: The suit of the plaintiff dismissed on the ground that the plaintiff's son was the
ostensible owner of the property within the meaning of section 41 of the Transfer of Property
Act, and that before the mortgage was executed the defendants had taken reasonable care to
ascertain that the mortgagor had power to execute the mortgage and had acted in good faith.
It is found that the plaintiff purchased the site of the house in the name of his son Rustam Ali.
There was then no house upon the property, Rustam Ali was at this time of full age.
Subsequently a house was built upon the property, and this house appears to have been
occupied by Rustam Ali on at least some occasions. His name was recorded as owner, and in
1897 when the defendants made the advance to him on the security of the mortgage, he
appears to have been in occupation of the house, for we find that the deed of mortgage was
registered at it. The plaintiff, it is to be observed, resides elsewhere, namely at Dholpur.
Rustam Ali borrowed from the defendants Rs. 8,000 on the security of the property. The
mortgagees instituted a suit on foot of their mortgage for sale of the mortgaged property, and
obtained a decree for sale on the 31st of August, 1899. In consequence of that decree the
present suit was instituted in order to restrain the defendants from selling the property. The
answer of the defendants to the suit is that they obtained the mortgage of the property from
the ostensible owner bona fide after taking reasonable care to ascertain that Rustam Ali was
the owner of it. Now, after the learned District Judge has pointed out, Rustam Ali was not
merely the nominal owner recorded as such, but also occupied the house and had in his
custody the deed of sale of the 30th of July, 1892. There was nothing whatever, as he says, to
39 (1904 )ILR 26All 490

suggest to an intending lender that Rustam Ali was only a benamidar and not the real owner.
Under such circumstances it cannot, we think, be successfully contended that the defendants
did not take reasonable care to ascertain that Rustam Ali had power to execute the mortgage.
We think that where a person is found in possession of property, is recorded as owner, and
holds the title deeds of the property and deals with a third party in respect of it; there is
nothing to suggest a want of good faith in such third party in dealing with him in respect of
the property. We do not think that the defendants respondents were called upon under the
circumstances to communicate with the father of the mortgagor and inquire from him as to
the title. For these reasons we do not see our way to differ from the learned District Judge.
We think that the case is one coming within the provisions of section 41 of the Transfer of
Property Act, and that the defendants are protected by that section. We therefore dismiss the
appeal with costs.
4. Laxman Sakharam Salvi v. Balkrishna Balvant Ghantage
FACTS: The facts are that the plaintiff sued the defendants to recover possession of the suit
property on the basis of his title. According to the plaintiff, on May 19, 1970, he purchased
the suit property for a consideration of Rs. 12,000/- from the 1st defendant. The 2nd
defendant, deceased Laxman Sakharam Salvi, was the brother of the 1st defendant, but given
in adoption in Salvi family. The defendants 3 to 6 and 2A to 2D are the legal representatives
of the 2nd defendant. According to the plaintiff, the suit property was purchased by the 1st
defendant benami in the name of the 2nd defendant on July 31, 1930 from Chhatrapati
Maharaja of Kolhapur. In the alternative the plaintiff alleged that if the 2nd defendant was the
real owner then the 1st defendant was the ostensible owner of the suit property and that he
purchased the same from the 1st defendant bona fide for valuable consideration without
notice of the rights of the 2nd defendant. In the alternative the plaintiff also alleged that in
case it is held that the suit property was of the joint ownership of the 1st and the 2nd
defendant, the portion purchased by him from the 1st defendant be allotted to the share of the
1st defendant. On these allegations the plaintiff claimed possession of the property and past
and future mesne profits.
The 1st defendant by his written statement (Exhibit 69) supported the suit claim of the
plaintiff and contended that he alone was the owner of the property sold to the plaintiff. The
legal representatives of the 2nd defendant by their written statements (Exhibits 26 and 40)
contended that the suit property is self-acquired property of their father and that the 1 st

defendant has nothing to do with the ownership of the property and therefore the sale deed
executed by the 1st defendant in favour of the plaintiff is not binding on them and the
plaintiff is bona fide purchaser of the property for value without notice and thus entitled to
the protection afforded by Section 41. Court passed a decree for possession giving liberty to
the plaintiff to apply for future mesne profits.
Held:
The transferee will be protected only if he has acted in good faith after taking reasonable care
to ascertain that the transferor had power to make the transfer. The transferee who wilfully
shuts his eyes and takes the transfer without any inquiry is not protected. The transferee is
also required to show that he had purchased the property after taking care to ascertain that the
transferor had power to make the transfer. What is reasonable care depends upon the facts and
circumstances of each case and no hard and fast rules can be laid down. It is not disputed
before us that the 2nd defendant was in possession of the suit property and this fact was
within the knowledge of the plaintiff before he purchased the property from the 1st
defendant. Where the disputed property was found not to be in possession of the transferor at
the time of purchase, the transferee should take reasonable care to ascertain as to how and
why the transferor was transferring the property of which he was not in possession. If with
such statutory requirements the transferee did not make inquiry as to the factum of
possession, he cannot be said to have acted in good faith taking reasonable care to ascertain
the real owner. In the result, the Letters Patent Appeal succeeds. The decree passed by the
trial Court is set aside. The plaintiff's suit for possession is dismissed.
5. Mazhar Hasan and Ors. Vs.Mukhtar Hasan and Anr.
Facts: This is a second appeal by three plaintiffs whose suit for a declaration that a sale deed
executed by Ashoor Ali, defendant 2, in favour of Mukhtar Husain, defendant 1, dated 21st
July 1934, is null and void so far as it is prejudicial to the rights of the plaintiffs. The
plaintiffs claimed that they were owners of the property under a prior sale deed of 22nd
August 1907 for which their names had never been entered by mutation in the khewat. The
property in question is shares in various mahals and villages. The plaintiffs were usufructuary
mortgagees under a mortgage of 28th December 1885) and a further mortgage of 8th August
1890. Mutation was obtained of the names of the plaintiffs as usufructuary mortgagees in
1905, the owner being recorded as defendant 2. The plaintiffs were in possession of the
zamindari shares and for that reason they say they never applied for mutation. The sale deed

of 1907 was only for Rs. 49 and registration was not necessary under Section 17(1)(b) of the
former Registration Act. Nevertheless the sale deed was actually registered on 24th August
1907.
Held: The question is whether reasonable care has been taken by defendant 1. The finding of
fact in the judgment of the Court below is that defendant 1, who is the record keeper in the
Collector's office, inspected the khewats and enquired from the patwari and examined the
mutation registers. He also claimed that he had got enquiry made from the registration office
and the trial Court believed that evidence, but the lower Appellate Court has not believed it
andhas held that he did not have this enquiry made. If he had inspected the registration
records for the last 12 years before the sale deed of 1932, he would have found nothing but if
he had gone back 25 years to the year 1907 he would have found that there was registration
of this sale deed on 24th August 1907. In second appeal it is contended on behalf of the
plaintiffs that reasonable care under Section 41 would have led defendant 1 to search the
registration records for the period of 25 years. The present case was not one of the entries of a
simple mortgage as the entry was of a usufructuary mortgage, and as the entry of the
usufructuary mortgage remained, there was no reason to suppose that any suit had been
brought on the mortgage. The usual search is for a period of 12 years and in the case of an
applicant for auction sale 12 years is the period for a certificate as supplied from the
registration office. Under these circumstances, I see no reason to interfere with the concurring
decrees of the Courts Wow and I dismiss this appeal with costs.
6.

Pratap Chand v Saiyida Bibi;

Facts: A tahsildar purchased land in the name of his minor sons and entered that in their
names in revenue records. The tahsildar was forbidden by the departmental rules from
acquiring land within the limits of his tehsil. The sons afterwards sold and mortgaged
the property to a person who acted in good faith and relied on the entries in the revenue
records. The purchaser and mortgagees were held not entitled to the protection of this
section because they should not have been satisfied with the entries in the revenue
records. A transferee cannot be said to have acted with reasonable where he took sale of
the property believing the statement of the transferor, that the real owner is unheard of
for a long time and he is not the real owner of the property.40
CONCLUSION
40 Sarju Kiari v. Panchanand Sarma, AIR 1959 Ass 15

A transfer of immovable property by an ostensible owner does not pass title to the transferee
when he does not make inquiries and is not acting in good faith. 41 A party wishing to take
advantage of the section must be able to show that he had made an inquiry into the title of the
ostensible owner.42 If transferee has taken reasonable care in good faith in order to inquire
about the title of the ostensible owner and found nothing vicious then this principle will act as
rule of estoppel against real owner. Real owner now cannot refuse to this transfer by
ostensible owner to defeat the right of bonafide purchaser acting in good faith and who
despite reasonable enquiries could not discover such real ownership. The transaction can be
considered voidable at the instance of the real owner if he can prove that he never gave
implied or explicit authority to transferor to transfer the property but he also has to prove that
transferee did not take reasonable care to check the authority of transferor and did not act in
good faith. However important point to take into account is that real owner need not have
authorized that particular transfer of property, mere fact that he or she has given authority to
an ostensible owner to transferor is sufficient to defeat the claim of the real owner. So, if it is
proved that ostensible owner has consent of real owner and transferee had taken reasonable
care to ascertain that in good faith, he will get protect under section 41 and transaction would
be void. This section is for the benefit of third party who is innocent but being trapped by the
real owner or ostensible owner. This is duty imposed on the transferee to inquire and if he
ignores, he will be at loss.
Suppose A (ostensible owner) transfer property to B (transferee), but after the transfer is
complete, real owner refused to abide by this transaction and make this transaction void.
Transferee can get protection and money if he is able to prove that he made inquiry about the
title of the ostensible owner and found it reasonable. This section does not provide that
transferee must be able to find some abnormality in the title, it is sufficient if he had made
reasonable inquiry as ordinary prudent person but not able to find still he would get
protection under this section.
This section also protects the right of real owner. Suppose if transferee is claiming his right
over the transferred property by transferor who was not authorised by the real owner to make
transaction. Here, real owner can protect himself from being abide by the transaction on the
ground that transferee does not make inquiry about the title of the transferor. It is a duty
41 Ragho v Dwarka, AIR 1924 Lah 738
42 Hanuman v Abbas, AIR 1929 Oudh 193

imposed upon the transferee to see whether transferor has power to deal with the property or
not and in case he finds nothing vicious, he cant be denied protection under section 41.
As in case Ramcoomar Koondoo v. John and Maria Mcqueen43, PC observed that the
principle of the natural equity must be universally applicable that, where one man allows
another to hold himself out as 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 old himself out shall be not permitted to recover his secret title, unless he can
overthrow that of the purchaser by showing wither that he had no bonafide intention to
purchase the property or even after knowing about the real title he does not made inquiry.

BIBLIOGRAPHY
Primary sources
1. SCC online
2. Manupatra
3. The Transfer of Property Act, 1882
Secondary sources
1.
2.
3.
4.

Mulla, The Transfer of Property Act, 10th edition

Avtar Singh, Textbook on the Transfer of Property Act, 3rd ed.
Darashaw J. Vakil, The Transfer of Property Act, 2nd edition
Commentary On The Transfer of Property Act, Manohar & chitaley, 7th edition,

volume 1
5. Poonam Pradhan Saxena, The Transfer of Property Act, 2nd edi.

43 AIR 1963 SC 1917