Keywords :
Ostensible, Owner , transfer , valid , implied , essentials, conditions.
Abstract:
Section 41 of the Transfer of Property Act, 1882, established the ostensible owner theory. The phrase “ostensible owner” can be understood as someone who is not the actual owner but acts in that capacity during the transfer of the property to which he is an owner because the term “ostensible” denotes something that is not real or true in nature. The project aims to adapt a thorough investigation of section 41. The study aims to clarify the intricacies around ostensible owner. The project has examined important cases in depth. The study also clarified the meaning of each term related to the subject and examined the requirements to uphold the concept.
Introduction :
One of the most fundamental demands in human existence is “property.” The right to property was originally outlined in Article 31 of the Indian Constitution as a fundamental right, but it was later repealed by the 44th Constitutional Amendment[1] Act of 1978 and replaced by Article 300A, which elevated it to the status of a constitutional right.
One person can transfer property to another for payment using possession, a contract, title documents, and other means. To ensure the smooth transfer of property, both movable and immovable, many laws have been developed. To codify and harmonize all of the existing customary laws governing the transfer of property, the Transfer of Property Act was passed in 1882. It only addresses the inter-vivos transfer of property, or the transfer of property between living individuals.
This law does not apply to the transfer of property through gifts, succession, inheritance, or testamentary. The Act creates precise legal guidelines that regulate the rights of the actual owner, apparent owner, and third party with regard to the transfer.The Act’s purpose was to make it simple and straightforward for the general people to transfer land and property. This Act lays out some general rules for property transfers that must be followed.[2]
Section 41 of the act deals with ostensible owner definition:
“Transfer by Ostensible Owner: Where 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 authorized 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.”[3]
Necessary Conditions for the applicable of Section 41:
- The main prerequisite is that the transferor must be the legal owner of the property.
- Either verbal or implied approval from the property owner is required. The transfer should be made in exchange for something of value.
- The transferee must exercise reasonable caution in determining the transferor’s authority to carry out the transaction and his good faith conduct.
- The concept of transfer by ostensible owner is based on the idea of estoppel, which states that once the actual owner of a piece of property represents another as the owner to third parties and they take action on that representation, the real owner is unable to retract his claim.
- These regulations and this provision solely apply to immovable property; they do not apply to movables.
Ostensible Owner:
Even though the ostensible owner is not the genuine owner, he or she may represent themselves as the real owner in such transactions. He became an apparent owner of the land through the intentional neglect or consent of the actual owner, who granted him that privilege. A person who has lived abroad for some time has handed his land to a family member so that he can use it for farming and any other uses that he may see fit.
In this situation, a family member is the supposed owner, and if during that time he sells the property to a third party, the genuine owner who returns cannot claim the property and assert that the transfer was illegal. An alternative situation is when the property is owned by the wife but was previously handled by the husband in all of its dealings. The wife cannot get her property back if the husband sells it as a result.
The usual rule that a person cannot transmit a superior title to property than what he owns, or “Nemo Dat Quod Non Habet,” is circumvented by the provision in Section 41.
This general rule is well-accepted to have an exemption in Section 41. A third party who (after due diligence) engages in bonafide business with an ostensible owner may be able to obtain a legitimate title to the property as against the real owner if[4],
for example, the real owner reasonably entrusts that person with the title papers and makes him an ostensible owner.
The following people are not ostensible owners:
- A manager or agent who claims to be one
- A person who works as a servant and has a modest stake in a piece of property is a mortgagor.
- A co-occupier in a jointly owned family dwelling who works there.
- Because the idol is neither sentient nor able to provide consent, the trustee or manager of the idol.
Landmark Cases:
Ramcoomar koondoo v.john and maria McQueen (1872)
Facts: By deed of sale, the then-landlord conveyed the eternally rented property to Bunnoo Bebee, the mistress of Alexander Macdonald. There was no way to know for sure whether the father, Macdonald, owned the property. In any case, there is enough proof of Bebee’s dwelling on the site even though the evidence does not show that he ever lived there.
After Bebee passed away, the plaintiff (Ramdhone, Ramcoomar Koondoo’s father), who had inherited the property, learned that Bebee had previously purchased it in her name. He then persuaded John and Maria McQueen that he had sufficient title to the property in order to sell it to them. The whole deal was a benami deal, which meant that only the person who sold the land was aware of it. The plaintiff sued John and Maria McQueen, who occupied the property but did not pay rent, in order to regain possession of the land. Ramcoomar (who had assumed his father’s responsibilities after his death) appealed the Calcutta High Court’s decision in favour of Mcqueen.
It’s doubtful that the purchaser was aware that the title was different from or comparable to the one that was published. Nothing in the papers suggests that the transaction was not exactly what it seemed to be. On the other hand, every piece of[5] evidence suggests that Bunnoo Bebee either carried out the deal herself or for her own gain. The Privy Council determined that Bunnoo Bebee had Macdonald’s implied agreement to represent herself as the true owner even if Macdonald was the actual owner and Bunnoo Bebee was just an ostensible owner.
Therefore, unless they could establish that they were the actual owners, the plaintiff or his representatives would not be able to get the title. After then, it was determined that the plaintiff could not obtain the property back from the third party and that the transfer was valid under the law.[6]
Conclusion:
The act’s Section 41 has done a respectable job of safeguarding the interests of the innocent third party. Even though it may appear that this section is a little prejudiced in favour of the third party, it really only is if the actual owner is at fault.
The law itself established these required conditions to prevent the ostensible owner and the third party from abusing this clause, thus the third party must exercise great caution while purchasing the property. This in a way safeguards the genuine owner’s interests as well. The power granted by the property owner to enter into transactions on his behalf is the ostensible owner’s most salient quality. This authority’s consent may be expressed formally or inferred through precedent-setting legal precedents.
[1] Rachit Garg, Section 41 of Transfer of Property Act, Ipleaders, ( July. 24, 2022, 11:26 AM), https://blog.ipleaders.in/section-41-of-transfer-of-property-act-1882/#:~:text=The%20transfer%20of%20property%20to,ostensible%20owner’%20of%20that%20property.
[2] Rachit Garg, Section 41 of Transfer of Property Act, Ipleaders, ( July. 24, 2022, 11:26 AM), https://blog.ipleaders.in/section-41-of-transfer-of-property-act-1882/#:~:text=The%20transfer%20of%20property%20to,ostensible%20owner’%20of%20that%20property.
[3] https://indiankanoon.org/doc/584197/#:~:text=%E2%80%94Where%2C%20with%20the%20consent%2C,it%3A%20provided%20that%20the%20transferee%2C, ( last visited July. 24, 2022).
[4] Shashank Singh, Transfer by Ostensible Owner, Legalservices India, ( July. 24, 2022, 11:31 AM), https://www.legalserviceindia.com/legal/article-7893-transfer-by-ostensible-owner-transfer-of-property-act-1882-tpa-.html.
[5] LegalRaj, https://legalraj.com/articles-details/ramcoomar-koondoo-v-macqueen, ( last visited July. 24, 2022).
[6] Rachit Garg, Section 41 of Transfer of Property Act, Ipleaders, ( July. 24, 2022, 11:24 AM), https://blog.ipleaders.in/section-41-of-transfer-of-property-act-1882/#:~:text=The%20transfer%20of%20property%20to,ostensible%20owner’%20of%20that%20property.
