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THE TRANSFER OF PROPERTY ACT, 1882

CHAPTER II1 TRANSFERS OF PROPERTY BY ACT OF PARTIES

Chapter II of the Transfer of Property Act, 1882 deals with transfers of property by act
of parties. This chapter has been divided into two parts:

Part-A—provides for rules regarding transfers of property in general, whether movable

or immovable.

Part-B—provides for rules regarding transfers of immovable property.

(B) TRANSFER OF IMMOVABLE PROPERTY

Part B of the Chapter II of the Transfer of Property Act, 1882 deals only with transfer of
immovable properties. This part consists of sections 38 to 53A. These sections will be
taken up in following groups or parts:—

I. Transfer by a person other than a full owner. (sections 38, 41 and 43).

II. Protection of third person's rights (sections 39-40).

III. Transfer by a person having authority to revoke a former transfer (section 42).

IV. Transfer by co-owners (sections 44 and 47)

V. Joint-transfers (sections 45-46)

VI. Priority of rights created by transfer (sections 48 and 78)

VII. Transferee's right under a policy (section 49)

VIII. Bona fide holders under a defective title (sections 50-51)

IX. Lis Pendens (section 52)

X. Fraudulent Transfer (section 53)

XI. Part-performance (section 53A)

[s 43] Transfer by unauthorised person who subsequently acquires interest in

property transferred.—

Where a person 284[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.

Illustration

A, a Hindu who has separated from his father B, sells to C three fields, X, Y and Z,
representing that A is authorised to transfer the same. Of these fields Z does not
belong to A, it having been retained by B on the partition; but on B's dying A as heir
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obtains Z. C, not having rescinded the contract of sale, may require A to deliver Z to
him.

Comments

[s 43.1] Feeding the Grant by Estoppel (Section 43)

Section 43 says that—

(i) Where a person,

(ii) fraudulently or erroneously represents that he is authorised to transfer certain

immovable property, and

(iii) professes to transfer such property for consideration,

(iv) 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.

(v) This section will not impair the right of the transferees in good faith for
consideration without notice of the existence of the said option.

This section is based on the principle of estoppel which is here also known as feeding
the grant by estoppel. A person who has interest in an immovable property can transfer
that property but a person not having any interest or title in the property cannot transfer
the property and would convey no title to the transferee. Where a person having no
authority professes to transfer any immovable property, he is estopped from denying
the transfer when he subsequently acquires such authority. The principle of this section
is based upon the following two principles:—

(1) The common law doctrine of estoppel by deed

(2) The equitable principle that if a person promises more than he can perform,
then he must fulfil the promise when he gets the ability to do so.

The doctrine comes into play when a person transfers property to which he has no title,
on a representation that he has a present and transferable interest in it, and acting on
that representation, the transferee takes the transfer for consideration. When these
conditions are satisfied the section says that if the transferor subsequently acquires
the property the transferee becomes entitled to it if the transfer has not been cancelled
in the meantime and is still persisting. For example, A, a Hindu, who has separated
from his father B, sells to C, three fields, X, Y, and Z representing that he is authorized to
transfer the same. Of these fields, Z does not belong to A, it having been retained by B
on the partition, but on B's dying, A as heir obtains Z. C not having rescinded the
contract of sale may require A to deliver Z to him. In this illustration, A on partition got
three properties X, Y and Z which he sold to C. But at the time of sale he was not
authorised to sell Z because that was retained by his father B on partition. On the death
of B the property came back to A, and at that time C had not cancelled the contract of
sale. It was still persisting, and, therefore, the property Z went to C according to the
original sale. Another illustration is to be found in a case before the Supreme Court:285

The property in question was transferred by the husband to his wife, in lieu of maintenance.
But he subsequently sold the property to a bona fide transferee for consideration. The wife
challenged this transfer by filing a suit. Wife died during pendency of the suit. The husband
being the legal heir became owner of the property. The court said that section 43 would
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apply. The transfer was not voidable under section 41. The husband had become the real
owner and not ostensible.

In order to get the benefit of the 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 was subsisting at the time when a claim for recovery of the
property was made.

"The doctrine 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". This 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 where properties in question
were sold by an auction." Law assumes that transferor had no title over the portion of
property that he had transferred but which has now been acquired by him. In such a
case, upon principles of elementary equity he is bound to make good his representation
to the transferee.286

Section 43 embodies a "rule or 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. Lord Buckmaster in Tilakdhari Law v Khedan
Lal stated, "if a man who has no title whatever to property grants it by a conveyance
which in the form would carry the legal estate, and he subsequently acquires an
interest sufficient to satisfy the grant, the estate instantly passes".287

This section is not applicable to the following types of transfer:—

(1) Transfers without consideration,

(2) Transfers forbidden by law on the ground of public policy.

(3) Involuntary transfers (for example, sale at instance of execution creditors).

In the absence of pleading that there was erroneous or fraudulent representation by

transferor, relief under section 43 cannot be given because section 43 applies only
where transferor fraudulently or erroneously represents that he is authorised to transfer
certain immovable property and transfers the same for consideration.288

[s 43.2] English Law

The English doctrine of estoppel by deed was stated in the case of Rajapakse v
Fernando289 and the statement is as follows:—

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

[s 43.3] Essential Requirements of the Section

The following conditions are to be fulfilled for the applicability of this section:—
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(1) a fraudulent or erroneous representation that the transferor had authority to
transfer the property.

(2) the transfer is for consideration.

(3) the transferor subsequently acquires the interest which he professed to transfer.

[s 43.3.1] Fraudulent or Erroneous Representation

Fraudulent or erroneous representation means a dishonest, deceitful, wrong, false,

untrue, faulty representation. The first requirement of this section is that the
representation made by the transferor must come under fraudulent or erroneous
representation. The transferee who desires to get the benefit of this section must show
that there was fraudulent or erroneous representation on the part of the transferor that
he was authorised to transfer the property.290 It is also necessary that the transferee
must have believed upon that representation and acted upon it. The benefit of this
section cannot be claimed by the transferee if he did not believe the representation to
be true or act upon the representation. When the truth is known to both the parties the
rule of estoppel cannot be applied. In Narayan Chandra Saha v Dipali Mukherjee291 there
was no evidence that the son of the owner of the property made any representation
that he was the owner of the property and the transferee also knew that the son could
not be owner during the lifetime of his father but even so he purchased the property.
Subsequently, when after the death of the owner (father) the son became one of the co-
owners, the transferee claimed the protection of section 43. It was held by the Calcutta
High Court that since the transferee had the knowledge that the son was not entitled to
transfer the property, the protection was not be available for him (transferee) because
he was not misled by the son's fraudulent or erroneous representation. The court
further observed that the provisions of this section are available only when the
transferor makes a representation of authority and the transferee acts on such
representation. If the fact of defective title of the transferor is known to both the
parties, there is collusion and this section will not be applicable. No estoppel can arise
by reason of any false statement when the truth is known to both the parties.292

Where the transferee does not rely solely on the representation of the transferor but
also makes inquiry from other sources and is satisfied that the transferor was
authorised to transfer the property, there can be no question of the transferee having
acted or induced by such representation.293

Where no pleading or evidence was put that the son of owner made any representation
that he was the owner-landlord or that he had the requisite authority to induct the
transferees in the suit property and transferees also knew that he was not the owner of
property, it was held that the transferee could cannot claim the protection of section 43
because the provision of section 43 would be applicable only when the transferor
makes a representation and the transferee acts on such representation.294

Where the vendee had purchased the property with full knowledge of rights of their
vendors, and there was no evidence to show that there had been any fraudulent or
erroneous representation, and that the vendee had acted on it, the Madras High Court
held that the doctrine of feeding the grant by estoppel was not attracted.295

Illustrative Cases

(i) A obtained property by way of exchange from B. At the time of exchange B only had
a half share but he professed to transfer the whole. When B subsequently purchase the
remaining half, A was held entitled to it.296
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(ii) A mortgaged a half share in the family property to B in which he had only one-third
share. After his father's death, he became owner of half the share. This fact was known
to B before the transaction. It was held that B could enforce his mortgage against one-
third share only.297

[s 43.3.2] Transfer for Consideration

The transfer under the section must be for consideration. This section does not apply
to gratuitous transfers. It applies only to transfers for value. It may be applied to
mortgages, sale, exchanges, and leases because they are supported with consideration
but not to charges or gifts.

[s 43.3.3] Subsequent Acquisition of Interest

The third requirement of the section is that the transferor must acquire interest in the
property which he had professed (agreed) to transfer without any interest or authority.
In the absence of such acquisition this section cannot be invoked. 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 subsists.

If there is a subsequent acquisition, it does not matter if it cannot satisfy the transfer in
toto, the reason being that every acquisition of interest in the property transferred
enures for the benefit of the transferee.298 This section is not operative on any other
property acquired by the transferor.299 The interest subsequently acquired by the
transferor must be the same as was purported to be transferred by him and it must be
acquired in the same capacity in which the transferor purported to transfer it.

Where the transferor had lesser interest than he transferred and this lesser interest is
subsequently enlarged, this section would become applicable because it will also be
treated as subsequent acquisition of property. An example may be taken of the case of
Brahmvart Sanathan Dharam Mahamandal, Kanpur v Prem Kumar.300 In this case, three
daughters inherited their father's property as a limited estate and divided the property
into three shares, each being in exclusive possession of her respective share. One of
the daughters A sold her share in possession to B. Subsequently other sisters died and
A remained the survivor as the last limited owner and got exclusive possession of the
whole estate. The court held that B was entitled to the property under section 43.

The property subsequently acquired by the transferor does not pass automatically to
the transferee. For satisfying the claim of transferee two conditions must be satisfied:
—

(i) At the Transferee's Option.—After the transferor acquires interest in the property
professed to be transferred, the transferee must exercise his option because the
property will not become transferred to him automatically. There is no particular form
of exercising option. It may be gathered from the acts and conduct of the transferee.
The transferee must claim the interest transferred within reasonable time because if he
fails to claim it, his right might become subject to the right of any transferee in good
faith to whom it may be transferred by the transferor for valuable consideration. It is
not necessary that the option must be exercised immediately on the acquisition of
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property by the transferor or vesting of interest in him. It may be exercised at any time
during which the contract of transfer subsists.

The transfer takes place not at the moment when the interest is acquired, but at the
moment when the transfer exercises the option that the interest is to stand transferred
to him. The doctrine of feeding the grant by estoppee does not apply so as to impair
the rights of the subsequent transfer in good faith for consideration without notice of
the existence of option in a prior transferee. The court further said that the word
"property" in the section does not necessarily means the physical corpus but also some
interest in property. Section 43 applies only when the transferor has no interest in
property at all and not when he had an interest but it was transferable.301

(ii) At any time during which the contract of transfer subsists.—The transferee can
claim the property only during the subsistence of the contract of transfer. A contract
exists till it is not rescinded or extinguished in some other manner. Where the
transferee rescinds the contract on a finding that the transferor had no interest in the
property and brings the action for damages, this section will not be available. In a case,
the mother of a minor son sold their joint property. The minor son on attaining majority
challenged the alienation made by his mother in respect of his share and obtained a
decree. But he died before he could obtain possession. The mother inherited the
property of her son on his death. It was held that due to the decree in favour of the son
the claim of the vendee in respect of son's share was not valid. He could claim only the
mother's share because the mother's subsequent acquisition will not feed the title of
the vendee.

A woman's property was fraudulently transferred by her son. He never acquired any
interest in the property during his lifetime by succession, inheritance or otherwise. It
was held that the doctrine of feeding the grant by estoppel was not attracted against
his heirs who succeeded to the Stridhan property of their grandmother. The purchaser
could not claim any benefit of such subsequent acquisition of property.302

[s 43.4] Transferee in Good Faith

The second paragraph of this section 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.
This means that where the second transferee in good faith has paid consideration and
without notice of the option takes the property before the option is exercised then he
shall not be affected by the first transferee's claim under this section. For example,
where A, on partition receives property X and the other property Y goes to his father B.
A representing that he owned both the properties X and Y, sold them to C. Afterwards
when B dies, A inherited both the properties. But before C could exercise his option to
compel A to transfer property Y to him, A secretly sold that property to D. D purchased
the property in good faith for consideration without having any notice of option of C. D
is entitled to get the property Y as against the claim of C.303

In a claim by vendees that they were bona fide purchasers, a widowed daughter-in-law
had received right of residence in the self-acquired property of her father-in-law under
family settlement. She executed a transfer deed in favour of her two brother-in-laws
and vendees were aware of the family settlement. Under the agreement, after death of
the widow the property had to pass to sons of the original owner and she had no pre-
existing right of maintenance in the property as it was not a coparcenary property. In
such circumstances, it was held that such transfer cannot be treated as acquiescence
by vendees acknowledging her as owner of property and vendees were not held to be
bona fide purchasers.304
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[s 43.5] Invalid Transfer

For getting the protection of this section it is necessary that the transfer must be a
valid transfer. This section is not applicable where the transfer is forbidden by law, for
example, it is against public policy. This section cannot be applied so as to make a
transfer valid which was void ab initio.305

[s 43.6] Conflict between section 43 and section 6(a)

According to section 6 (a), the "chance of an heir apparent" or spes successionis to get
the property in future is a non-transferable right and its transfer is void ab initio.
Whereas section 43 validates the transfer made without title when the transferor
subsequently acquires that property. Now the question arises that if the property
professed to be transferred happens to be spes successionis and subsequent to the
transfer the transferor acquires it, whether the transferee will be entitled to seek
protection of this section for claiming the subsequent acquisition of the transferor.
Therefore, on plain reading there appears to be a conflict between these two sections.

The Supreme Court observed in a case that there is no conflict between these sections
and both can operate simultaneously. In this case, Jumma Masjid v Kodimaniandra
Deviah,306 an heir apparent sold his would be share in a joint property to Masjid for Rs
300. Subsequently, when the transferor became entitled to the property, Masjid invoked
section 43 to compel him to pass the property to Masjid. The transferor contended that
the interest transferred was spes successionis and void ab initio under section 6(a) and,
therefore, section 43 could not be applied to make a transfer valid which was void ab
initio. The Supreme Court held that Masjid was entitled to the protection of section 43
and the transferor was liable to pass on the title to Masjid. The Supreme Court
observed that section 6(a) was a rule of substantive law whereas section 43 was based
on estoppel which is a rule of evidence.

Illustrative Cases

(1) A, an owner of certain immovable property died leaving behind him his widow and
his divided brother, B. The brothers B sold the property during the life time of widow to
C falsely representing that he was the owner of the property. Two years later, the widow
died and C could not get the possession of property from the widow. It was held that
the C could require B to deliver the property to him.307

(2) A, representing himself to be the owner of certain property X, made a gift of it to B

by a registered instrument. On the date of gift, it was found that the property actually
belonged to C. A subsequently purchased the property from C and B filed a suit to get
the possession of property against A. The court held that the suit by B is liable to be
dismissed because the transfer, being a gift, was without consideration.

(3) The defendant believed that the allotment order issued by the Development
Authority was a title deed conferring upon the defendant ownership of the property
under allotment. Both parties to the agreement of sale proceeded with the belief that
by virtue of the allotment order the defendant could successfully convey in favour of
the plaintiff the title to the property. The court said that it was clear that the defendant
did not make any misrepresentation that he was the absolute owner of the property
having full power to dispose of the same. Provision of section 43 were not
attracted.308
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[s 43.7] Comparison of Section 41 and Section 43

(1) In a sale by ostensible owner under section 41, the transferee does not depend
upon the representation of the transferor but in good faith takes reasonable care to
inquire about the authority of the transferor to transfer the property. Whereas in feeding
the grant by estoppel under section 43 the transferee believes the fraudulent or
erroneous statement of the transferor to be true.

(2) Ostensible owner is the person who is not the real owner but he holds himself out
as the owner and the transferor takes the property from him whereas under section 43,
the transferee gets the property which does not belong to the transferor and he can
claim that property from the transferor only when that property by some chance in
future comes into the transferor's share.

(3) The estoppel works against the real owner under section 41 whereas it works
against the transferor under section 43.

(4) The transferee under section 41 takes from an ostensible owner whereas under
section 43, the transferee takes from a real owner.

(5) Under section 41, the transferee must inquire about the authority of the transferor
whereas under section 43, he has to pay consideration only.

(6) Under section 41, the transferee must not have notice of the real owner's title
whereas the one under section 43 should have no notice of the option in favour of the
first transferee.

(7) Both the transferees must take the transfer in good faith. Under section 41,
transferee must honestly believe that the ostensible owner had got an authority to
transfer, whereas under section 43, the transferee must believe that the transferor has
transferred the property to him for the first time.

1 Nothing in Chapter II is to be deemed to affect any rule of Muhammadan Law, see section 2,
Act 20 of 1929.
284 Ins. by Act 20 of 1929, section 13.
285 Hardev Singh v Gurmail Singh, AIR 2007 SC 1058 : (2007) 2 SCR 441 : (2007) 2 SCC 404 .
The court referred to the decision in Jote Singh v Ram Das Mahto, AIR 1996 SC 2773 : (1996) 5
SCC 524 : JT 1996 (7) SC 471 , here it was held that the provisions of sections 41 and 43 would
not be available. The court also referred to N Srinivasa Rao v Special Court, (2006) 4 SCC 214 :
AIR 2006 SC 3691 : 2006 AIR SCW 1740, if the transfer is void under an Act, section 43 cannot
be used to validate the illegality and nullify the statute.
286 Durga Prasad Shrestha v Special Secretary, Tourism Department, Govt of Sikkim, Gangtok,
East Sikkim, AIR 2018 SK 22 ; a guarantor executed a settlement deed without consideration in
favour of his son and grandsons which was cancelled subsequently, mortgage created by
guarantor remained valid, sons and grandsons were estopped from raising plea that the
property belonged to them under settlement deed, bank held to have charge over property to
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secure loan, Minor S Kasilingam v Chairperson Debts Recovery Appellate Tribunal, AIR 2019 Mad
110 .
287 1920 (47) IA 239 : AIR 1921 PC 112 .
288 Ganesh Patra v Banabihari Patra, AIR 2004 Ori 23 : 2004 (1) CLR 56 : 2003 (4) Civ LJ 813 .
289 (1920) AC 892 (897) : AIR 1920 PC 216 .
290 Jamuna Mayee v Koimaindra, AIR 1958 Mad 427 .
291 AIR 2002 Cal 229 : 2002 (1) Cal LJ 332 : 2002 (3) Civ LJ 917 .
292 Mohori Bibi v Dharmodas Ghose, (1903) 30 Ind App 114 : ILR 30 Cal 539 (PC) : (1903) 5
Bom LR 421 ; HPA International v Bhagwandas Fateh Chand Daswani, (2004) 6 SCC 537 : AIR
2004 SC 3858 : 2004 AIR SCW 4135, doctrine not applicable because the remaindermen had
objected to the transfer of their reversionary interest.
293 Janakirama v Nilakanta, ILR (1954) Mad 537 : (1954) 2 Mad LJ 486.
294 Narayan Chandra Saha v Dipali Mukherjee, AIR 2002 Cal 229 : 2002 (1) Cal LJ 332 : 2002 (2)
ICC 953.
295 B Narainswami Raju v Krishnamurthy Mudaliar, AIR 1998 Mad 193 : 1998 (3) ICC 444 : 1998
(2) Mad LJ 328.
296 Bhairab Chandra v Jiban Krishna, (1921) 33 Cal LJ 184 : AIR 1921 Cal 748 .
297 Pandiri Bangaram v Kurumoory Subbaraju, (1911) 34 Mad 159 : 8 Ind Cas 388.
298 Mohan Singh v Sewa Ram, AIR 1924 Oudh 209 .
299 Syed Ahmad v Hafiz Zahid Husain, AIR 1934 All 731 (732) : 153 Ind Cas 1095 : 4 All WR 461.
300 AIR 1985 SC 1102 : (1985) 3 SCC 350 .
301 Premnath Khanna v State of Orissa, AIR 2009 Ori 166 : 2009 (1) CLR 1057 : 2009 (1) Ori LR
416 ; In N Venkatashappa v Munemma, AIR 2016 SC 889 , alienation was made by the holder of
service Inam land between the period of his appointment date and the date when the
Amendment came into force. It ensured for the benefit of alienation under the principle of
feeding the grant by estoppel. He got a good title after the regrant to his alienor. He was not an
unauthorized holder. Therefore, eviction proceeding could not be initiated against him.
302 Agricultural Produce Marketing Committee v Bannama, AIR 2014 SC 3000 : 2014 AIR SCW
4446 : (2014) 8 Scale 707 .
303 HPA International v Bhagwandas Fateh Chand Daswani, (2004) 6 SCC 537 : AIR 2004 SC
3858 : 2004 AIR SCW 4135, subsequent acquisition of property through an unauthorised person
facts known to the vendee, no protection under section 41 or section 43.
304 Raj Kumar v Rakesh Kumar, AIR 2019 P&H 29 .
305 N Sirinivasa Rao v Special Court under AP Land Grabbing Prohibition Act, (2006) 4 SCC 214 :
AIR 2006 SC 3691 : 2006 (4) SCJ 328 , a transfer of certain land was illegal because of a
statutory restriction, not registered, he transferred a portion of the land to another person which
was also against law but subsequently to this his own purchase became validated, his
transferee could not seek application of section 43 for validation of the transfer in his favour.
306 (1962) Supp (2) SCR 554 : AIR 1962 SC 847 : 1962 (2) SCJ 303 .
307 Halikudur v Andar, 28 Mad LJ 44.
308 M Rathnam v Susheelamma, AIR 2009 Kant 79 : 2009 (2) AIR Kant 518 : 2009 (1) Kant LJ
434 .