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CASE NO.: Appeal (civil)  6222 of 2000

PETITIONER: Hardev Singh

RESPONDENT: Gurmail Singh (Dead) by LRs

DATE OF JUDGMENT: 02/02/2007

BENCH: S.B. Sinha & Markandey Katju

JUDGMENT: J U D G M E N T

S.B. Sinha, J.

       This appeal raises an interesting question of law in regard to  interpretation of Section 43 of the Transfer of Property Act, 1882 ("the Act",  for short).                   Harcharan Singh, the original Defendant No.1, allegedly transferred  some properties in favour of his wife Udham Kaur in lieu of maintenance  pursuant to a compromise entered into by and between them.  She claimed  herself to be the absolute owner thereof in terms of Section 14(1) of the  Hindu Succession Act. 1956.  She filed a suit against her husband Harcharan  Singh for a declaration that she was the owner in possession of the suit land.   The learned Trial Judge was of the opinion that as she had been in  possession of the property in lieu of maintenance, she was ’entitled to enjoy  the fruits thereof only during her life time’.  An appeal was preferred  thereagainst and the Appellate Court declared her to be the full owner in  possession of the suit land.  Indisputably, during pendency of the said suit,  Harcharan Singh sold the said land to the respondent herein by a deed of sale  dated 17.3.1982 and he had been given possession thereof.  Another suit was  filed by Udham Kaur.

       The appellant, in the suit, inter alia, raised a plea that he was a  bonafide purchaser for value, whereas the case of Udham Kaur was that as  the properties were purchased during pendency of the suit, the same was hit  by the ’doctrine of lis pendens’, as envisaged under Section 52 of the Act.   The said contention of the respondent was not accepted by the learned Trial  Judge as also by the First Appellate Court holding that the transaction was  hit by the doctrine of lis pendens.  In the Second Appeal, one additional  ground was taken by him, viz., having regard to the death of Udham Kaur,  the properties devolved upon the appellant herein as also on Harcharan  Singh in equal shares; and, thus, he should be declared to be the owner of the  lands in terms of Sections 41 and 43 of the Act.   

       The High Court, although, rejected the contention of the respondent  herein that Section 41 of the Act would be attracted, but opined that Section  43 would.  Appellant is, thus, before us.

       Mr. A. Mariarputham, learned counsel appearing on behalf of the  appellant took us through the judgment of the High Court and contend that  as the bonafide of the respondent was not proved and furthermore in view of  the fact that the High Court itself opined that he was not entitled to the  benefit of Section 41 of the Act, the judgment of the High Court upholding  his claim in terms of the Section 43 thereof cannot be sustained.  

       Mr. R.K. Kapoor, learned counsel appearing on behalf of the

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respondent, on the other hand, supported the judgment.   

       Although, in this appeal we are not concerned with the applicability of  Section 41 of the Act, with a view to appreciate the rival contentions raised  by the parties we may notice the provision of both Sections 41 and 43 of the  Act, which are as under :   

"41.   Transfer by ostensible owner.\026 Where, with the  consent, express or implied, of the persons interested in  immoveable property, a person is the ostensible owner of  such property and transfers the same for consideration,  the transfer shall not be voidable on the ground that the  transferor was not authorised 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."

"43.   Transfer by unauthorized person who  subsequently acquires interest in property  transferred. \026 Where a person fraudulently or  erroneously represents that he is authorised to transfer  certain immoveable property and professes to transfer  such property for consideration, such transfer shall, at the  option of the transferee, operate on any interest which the  transferor may acquire in such property at any time  during which the contract of transfer subsists.

       Nothing in this section shall impair the right of  transferees in good faith for consideration without notice  of the existence of the said option."

       The distinction between the said two provisions is apparent.   

       Application of Section 41 of the Act is based on the law of estoppel to  the effect that if a man has represented that the transferor consents to an act  which has been done and that he would not offer any opposition thereto,  although the same could not have been lawfully done without his consent  and he thereby induces others to do that from which they might have  abstained \026 he could not question the legality of the act he had so sanctioned  \026 to the prejudice of those who have so given faith to his words or to the fair  inference to be drawn from his conduct.  

       The ingredients of Section 41 of the Act are :

1)      the transferor is the ostensible owner; 2)      he is so by the consent, express or implied, of the real owner; 3)      the transfer is for consideration; 4)      the transferee has acted in good faith, taking reasonable care to  ascertain that the transferor had power to transfer.

       Section 43, on the other hand, embodies a ’rule of feeding the  estoppel’ and enacts that a person who makes a representation shall not be  heard to allege the contrary as against a person who acts thereupon and it is  immaterial whether the transferor acts bona fide or fraudulently in making  the representation.  [See Jumma Masjid, Mercara v. Kodimaniandra Deviah,  AIR 1962 SC 847 : 1962 Supp.2 SCR 554.]

       In order to get the benefit of the said provision, the conditions which  must be satisfied are : (1)     the contract of transfer was made by a person who was  competent to contract; and  (2)     the contract would be subsisting at the time when a claim for  recovery of the property is made.

       However, the provisions would have no application if the transfer was

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invalid as being forbidden by law or contrary to public policy, as envisaged  under Section 23 of the Indian Contract Act.  Thus, no estoppel can be  pleaded contrary to the provisions of a statute.  The ’rule of feeding the  estoppel’ shall apply in absence thereof.

       The doctrine of feeding the estoppel envisages that ’where a grantor  has purported to grant an interest in land which he did not at the time  possess, but subsequently acquires, the benefit of his subsequent acquisition,  goes automatically to the earlier grantee, or as it is usually expressed, feeds  the estoppel’.   

       The principle is based on an equitable doctrine that a person who  promised to perform more than he can perform must make good his contract  when he acquires the power of performance.  The difference between the  ambit of Section 41 and 43 of the Act is apparent.  Whereas Section 41  provides that a transfer by an ostensible owner cannot be avoided on the  ground that the transferor was not authorised therefor, subject to the  condition that the transferee should take reasonable care to ascertain that the  transferor had power to make the transfer and to act in good faith before a  benefit thereof is claimed by him.  Section 43, on the other hand, enables the  transferee to whom a transferor has made a fraudulent or erroneous  representation to lay hold, at his option, of any interest which the transferor  may subsequently acquire in the property, unless the right of any subsequent  purchaser for value without notice is in effect.

       With the aforementioned proposition in mind, we may notice that the  High Court has declined to grant any relief to the respondent herein in terms  of Section 41 of the Act, inter alia, on the premise (1) that Harcharan  admitted that he had sold the property to the respondent in order to frustrate  the claim of Udham Kaur; (2) a public notice was not given; and (3) that the  respondent knew regarding the pending litigation, and it was for the  respondent to show that he had no knowledge about the litigation.   

       In applying the provisions of Section 43 of the Transfer of Property  Act, the High Court, however, held :

i)      It was Harcharan Singh who had pleaded the mischief; ii)     After the death of Udham Kaur, Harcharan Singh would be the  natural heir of the half share of her property.              

       The learned Trial Judge and the First Appellate Court had decreed the  suit of Udham Kaur only on the basis that she acquired the suit property  during the pendency of the earlier litigation.  Section 52 of the Act merely  prohibits a transfer.  It does not state that the same would result in an  illegality.  Only the purchaser during the pendency of a suit would be bound  by the result of the litigation.  The transaction, therefore, was not rendered  void and/or of no effect.

       In Jumma Masjid, Mercara (supra), speaking for a four Judge, Bench,  Aiyar, J. opined :

"Considering the scope of the section on its terms, it  clearly applies whenever a person transfers property to  which he has no title on a representation that he has a  present and transferable interest therein, and acting on  that representation, the transferee takes a transfer for  consideration.  When these conditions are satisfied, the  section enacts that if the transferor subsequently acquires  the property, the transferee becomes entitled to it, if the  transfer has not meantime been thrown up or cancelled  and is subsisting\005"   

       Referring to the illustration appended to Section 43 of the Act, it was  held :

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"...But far from being restricted in its scope as contended  for by the appellant, the section is, in our view, general in  its terms and of sufficient amplitude to take in the class  of transfers now in question.  It is not to be readily  assumed that an illustration to a section is repugnant to it  and rejected\005"

            It was concluded :

"...We accordingly hold that when a person transfers  property representing that he has a present interest  therein, whereas he has, in fact, only a spes successionis,  the transferee is entitled to the benefit of s.43, if he has  taken the transfer on the faith of that representation and  for consideration\005"   

       It is one thing to say that the respondent was aware of the litigation,  but it is another thing to say that he did not purchase the property on  representation of Harcharan Singh.  In fact, from the judgment of the courts  below, it does not appear that any finding has been arrived at to the effect  that the respondent herein was aware that the said Harcharan Singh had no  title over the property.   

       Our attention has, however, been drawn to a decision of this Court in  Kartar Singh (Dead) by LRs. & Ors. v. Harbans Kaur [(1994) 4 SCC 730],  wherein this Court held :

       "Section 43 feeds its estoppel.  The rule of  estoppel by deed by the transferor would apply only  when the transferee has been misled.  The transferee  must know or put on notice that the transferor does not  possess the title which he represents that he has.  When  note in the sale deed had put the appellant on notice of  limited right of the mother as guardian, as a reasonable  prudent man the appellant is expected to enquire whether  on her own the mother as guardian of minor son is  competent to alienate the estate of the minor.  When such  acts were not done the first limb of Section 43 is not  satisfied.  It is obvious that it may be an erroneous  representation and may not be fraudulent one made by  the mother that she is entitled to alienate the estate of the  minor.  For the purpose of Section 43 it is not strong  material for consideration.  But on declaration that the  sale is void, in the eye of law the contract is non est to the  extent of the share of the minor from its inception.  The  second limb of Section 43 is that the contract must be a  subsisting one at the time of the claim.  A void contract is  no contract in the eye of law and was never in existence  so the second limb of Section 43 is not satisfied."    

       The said finding was arrived at, inter alia, on the premise that  Kulwant Singh was a minor on the date on which the property was  transferred and in the marginal note of the sale deed specifically mentioned :

"...that the land had been acquired by her and by her  minor son by exercising the right of pre-emption and that  she was executing the sale deed in respect of her own  share and acting as guardian of her minor son so far as  his share was concerned."

       It was held that under the Guardian and Wards Act, the estate of the  minor could not have been alienated unless a specific permission in that

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behalf is obtained from the district court and admittedly, no such permission  had been obtained.  In that view of the matter, the sale of the half share of  the interest of the minor son made by his mother was void.   

       We have noticed hereinbefore that the transaction was not void.  It  was not contrary to any provision of law.  It was not hit by Section 23 of the  Indian Contract Act.  We, therefore, do not accept the submission of the  learned counsel that the ingredients of Section 41 would also be applicable  in a case falling under Section 43 of the Act.  We may notice that in Jote  Singh (dead) by LRs. v. Ram Das Mahto & Ors. [AIR 1996 SC 2773], it was  held that the provisions of Sections 41 and 43 would not be available where  the properties have been sold in auction.  

       In N. Srinivasa Rao v. Special Court under the A.P. Land Grabbing  (Prohibition) Act & Ors. [(2006) 4 SCC 214], to which our attention has  been drawn by learned counsel appearing on behalf of the appellant, it was  held that the transfer must be a valid one.  Therein, the property in question  was transferred in violation of the provisions of Section 47 of the Andhra  Pradesh (Telangana Area) Tenancy and Agricultural Lands Act, 1950.  It  was, in the factual matrix obtaining therein, opined :

       "Even on the question of the applicability of  Section 43 of the Transfer of Property Act, we agree with  the view taken by the High Court that when the initial  transfer itself between Uppari Ramaiah and Mir Riyasat  Ali was invalid, the question of application of Section 43  of the Transfer of Property Act to such a transaction on  account of subsequent acquisition of title by Uppari  Ramaiah would not be available."

                The said decision, therefore, has no application to the facts of the  present case.   

       There is another aspect of the matter which cannot be lost sight of.   Appellant claimed absolute interest in the property on the premise that his  mother has executed a Will in his favour on 3.10.1995.  The said Will has  not been proved.  If the title claimed is on the basis of the Will, the same was  required to be proved in the light of the provisions contained in Section 63  of the Indian Succession Act and Section 68 of the Indian Evidence Act.  If  the Will has not been proved, in the absence of such proof the general law of  succession and inheritance shall apply.         The plea of inapplicability of Section 43 of the Transfer of Property  Act could have been taken by Harcharan Singh and not by the appellant,  who has based his claim on the basis of the Will.

       The principle of feeding the estoppel will apply against Harcharan  Singh and not against the appellant.  He could not have, in our opinion,  therefore, raised the said plea.   

       For the reasons aforementioned, we do not find any merit in this  appeal, which is accordingly dismissed with costs.  Counsel’s fee is assessed  at Rs.5,000/-.