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DOCTRINE OF OSTENSIBLE OWNER
NOVEMBER 2020. ISSUE 02
11-NOV-2020
EVOLUTION
The right to property is guaranteed under Art.31 which was abolished by the 44th
amendment and subsequently made a constitutional right under Art.300A of the
Indian Constitution which states no person shall be deprived of his property except by
authority of law. The concept of ostensible owner is originated to protect the interest
of innocent third parties and property owners. The Transfer of Property Act, 1882 does
not deal with succession, testamentary, inheritance or gifts, etc, but provided
statutory laws in relation to the ostensible owner, real owner, and third parties relating
to the immovable property. It is the principle of natural equity.
MEANING
An ostensible owner means the apparent owner. The ostensible owner is not the real
owner but represents himself as the real owner to the third party for the transactions.
He has acquired the right from the real owner when there is wilful neglect or
acquiesces on the part of the real owner thereby making him the ostensible owner.
Sec.41 of the Transfer of Property Act deals with the ostensible owner. Wherewith the
consent express or implied of the person interested in immovable property, a person is
the ostensible owner of such property and transfer the same for consideration, the
transfer shall not be voidable because the transferor was not authorized to make it.
It is the general rule that no person can transfer to another a title or title greater than
what he himself posses. The maxim Nemo dat quod non-balet which means no one
can transfer better title than he himself has. Sec.41 of the Transfer of Property act is
the exception to this rule. This section does not apply to minors. Even if the minor’s
guardian transfers the property with the consent of the minor, he cannot be treated
as the ostensible owner. The transfer made by the ostensible owner cannot be
avoided on the ground that the transferor was not authorized subject to the condition
that the transferee should take reasonable care and act in good faith before a
benefit is claimed by him.
Page 2
CONDITIONS
The person transferring the property must be the ostensible owner.
The ostensible owner should be appointed with the consent of the real owner.
The consent may be express or implied.
The transfer is for consideration.
The transferee has acted in good faith taking reasonable care to ascertain that
the transferor has the power to transfer.
CASE LAWS
Case 1
Ramcoomar Koondoo And Another v. John And Maria Mcqueen, 1872 SCC ONLINE
CAL 54.
It is a principle of natural equity, which must be universally applicable that, where one
man allows another to hold himself out as the owner of an estate, and a third person
purchases it, for value, from the apparent owner in the belief that he is the real owner,
the man who so allows the other to hold himself out shall not be permitted to recover
upon his secret title, unless he can overthrow that of the purchaser by showing, either
that he had direct notice, or something which amounts to constructive notice, of the
real title; or that there existed circumstances which ought to have put him upon an
inquiry that, if prosecuted, would have led to a discovery of it.
Case 2
Hardev Singh v. Gurmail Singh (Dead) By Lrs., 2007 SCC 2 404.
Section 41 provides that a transfer by an ostensible owner cannot be avoided on the
ground that the transferor was not authorised therefore, subject to the condition that
the transferee should take reasonable care to ascertain that the transferor had the
power to make the transfer and to act in good faith before a benefit thereof is
claimed by him.
Page 3
Case 3
Sankara Hali & Sankara Institute Of Philosophy And Culture v. Kishori Lal Goenka And
Another, 1996 SCC 7 55.
This provision is clearly intended to protect the third party transferees who bona fide
and after due care and caution purchase the property from the ostensible owner
taking him to be the real owner. It may next be noted that even if it is so assumed, we
are of the opinion that in the instant case Surender Kumar having already released his
right, title and interest as ostensible owner of the property in favour of the firm, the firm
had acquired complete title over the property long before the Act came into force.
Such a transaction which preceded the coming into force of the Act has not been
voided by any specific provision in the Act.
Case 4
E.Yesodammal Petitioner v. E. Govindan, 2010 SCC ONLINE MAD 1388.
Where the real owner makes an attempt to enforce his right as against the ostensible
owner, quite against the letter and spirit of embargo found under Section 4 of the
said Act. The said provision would not have any application to a case where the
ostensible owner had relinquished his right in the property in favor of the real owner of
the property long prior to the coming into force of the present Act.
Case 5
State Of Punjab v. Surjit Kaur (Dead) Through Lrs. And Others, 2012 SCC 12 155
The widow can be ostensible owner to the extent that she has a right during her
lifetime. She ceased to be an ostensible owner after her death and cannot pass on a
better title than what she had. Admittedly, she had a life estate in the property and
after her death; the title in the land would revert to the State of Punjab.
Page 4
Case 6
Jote Singh v. Ram Das Mahto, (1996) 5 SCC 524.
As a doctrine, it is well established that where a person sells property of which he is
not the owner but of which he afterward becomes the owner, he is bound to make
good the sale to the purchaser out of his subsequently acquired an interest. It is also
well understood that neither the provisions of Section 41 nor that of Section 43 of the
Act are available for the benefit of the auction-purchasers, for these provisions come
to the rescue of transferees from ostensible owners or of transferees who purchase
property in good faith from unauthorised persons and who subsequently acquire
interest in the property transferred. These two provisions logically get engaged
involuntary transfers and not in involuntary transfers, like auction sales. There is no
question of the court ever playing the role of an ostensible owner or a representative
owner of the property when selling, so as to attract the provisions of Section 41 or 43
of the Act. In the face of these principles, it is difficult to hold that the High Court was
in error in not giving the benefit of the aforesaid two provisions to the auction-
purchaser, the appellant herein.
DISCLAIMER
This write up has been sent to you for information purposes only and is intended merely to highlight
legal maxim. The information and/or observations contained in this issue do not constitute legal advice
and should not be acted upon in any specific situation without appropriate legal advice. The views
expressed in this issue do not necessarily constitute the final opinion of M/s.Wallcliffs Law Firm and
should you have any queries in relation to any of the issues set out herein or on other areas of law,
please feel free to contact us on [email protected].