A PROJECT ON

“TRANSFER BY OSTENSIBLE OWNER”

SUBMITTED TO: Mr. Avisek Raj

Name of Subject: The Transfer of Property Act, 1882

SUBMITTED BY: Saloni Yadav

ENROLLMENT ID: 18FLICDDN02116

SUBMISSION DATE: 24-11-2020

SIGNATURE OF STUDENT –
SIGNATURE OF FACULTY-

ICFAI LAW SCHOOL,

THE ICFAI UNIVERSITY, DEHRADUN

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 Table of Contents

Acknowledgement…………………………………………..….…………………..…....3

List of Abbreviation…………………………………………………………………………4

Object and methodology……………………………………………………………….........5

1. Introduction…………………………………………………………………………….....6

2. Section 41: Transfer by ostensible owner……………………………………….............7

2.1 Provision………………………………………………………..…………………….......7

2.2 Statutory Changes………………………………………………..……….…………......7

2.3.1 Ostensible Owner………………………………………………..………………...…..8

2.3.2. Transfer by ostensible owner …………………………………..…………….……...8

2.4. Essential Requirements of the Section……………………………...………………….8

2.4.1 The transferor must be an ostensible owner……………………………………..…..9

2.4.2 Express or Implied Consent of Real Owner……………………….………………...9

2.4.3 Transfer for Consideration…………………………………………..……………....10

2.4.3 Good Faith and Reasonable Care…………………………………….………….......11

3. Conclusion………………………………………………………………….……………..12

4. Bibliography ………………………………………………………………...…………...13

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Acknowledgement

First and foremost, I would like to thank my parents, who always encouraged me and
taught me to think and workout innovatively whatsoever the field of life is.

I would like to give my sincerely thanks to Mr. Avisek Raj my project in- charge, for the
valuable guidance and suggestion. He inspired me greatly to do innovative work in this
project. His willingness motivates me tremendously to do my project. He always supports
me and helps me to solve the all issue happening during the progress of the project.

I would sincerely like to thanks faculties and students of ILS, IUD for their help and
support during my project. Despites their busy schedule, they took time out for me and
explained to me in various aspects of working of the project, from their experience.

I extend my heartfelt thanks to my family and friends for their moral support and
encouragement. I also take this opportunity to thank all those people who contribute in
their own small ways but fail to get a mention.

Thank you

Saloni Yadav

18FLICDDN02116

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 List of Abbreviations

ABBREVIATION FULL FORM

& And

AIR All India Reporter

All Allahabad

Cal Calcutta

Hon’ble Honourable

HC High Court

i.e. That is

No. Number

Ors Others

SC Supreme Court

Sec Section

TPA Transfer of Property Act

V. Versus

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 Object and methodology
The main objective of this paper is to analyze various aspects of transfer by ostensible owner
under Section 41 of Transfer of Property Act, 1882. This paper also examines the landmark
judgment of Ramcoomar Koondoo v. John and Maria McQueen1, the decision which found
its way to be codified as Section 41 of the Transfer of Property Act. The study is about the
exception to the general rule of Transfer of Property which based on maxim which clearly says
that Nemo dat quod non habet, i.e., no one can transfer better title, he himself has. The paper
explains the provision and present time status of ostensible owner.

Since, the present topic was purely academic it was inevitable and inherently mandatory that
only secondary sources be made use of. Therefore, I have made use of journal articles, leading
books and internet.

Name: Saloni Yadav

Enorll ID: 18FLICDDN02116

1
(1872) 11 Beng. LR46,52IA

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1. Introduction:
The Transfer of Property Act, 1882 incorporates certain basic rules for the transfer of properties
irrespective of their kind (both the movable and immovable property). Mainly, it deals with the
transfer of immovable property and transfer of movable property is governed by the Sales of
Goods Act, 1930. The Act deals with the transfer by the act of the parties and excludes transfer
by operation of law such as inheritance or will. There are basically two parties in transfer of
property. When the property is transferred, the person transferring such property is known as the
transferor, who is the absolute owner of the respective property and the person in whose favor
the property is transferred is known as the transferee. It is the general rule that the full owner of
the property is only entitled to transfer the property i.e. he can only act as a transferor, but there
are certain sections in TPA, 1882 where the property can be transferred by the person who is not
the full owner of the property.

The general principle of law of transfer of property is that no person can transfer to another a
right or title greater than what he himself possesses. The maxim on which this principle is based
is nemo dat quod non-habet, i.e., no one can transfer better title than he himself has. This general
rule has certain exceptions too Sections 38, 41 and 43 deal with the transfers by a person other
than the full owner.

Section 38 states transfer by person authorized only under certain circumstances to transfer. And
section 43 states transfer by unauthorised person who subsequently acquires interest in property
transferred. Section 41 deals with the concept of transfer by obstensible owner. The ostensible
owner is not the real owner of a property. He merely represents himself out as real owner to the
third parties. Such ostensible owner possesses all the rights of ownership in a property without
being the real owner of it. He acquires these rights from the real owner by the express or implied
consent of such an owner. The law relating to transfer of property by an ostensible owner under
this section are now subject to the provisions of Benami Transactions (Prohibition of the Right to
Recover Property) Act, 1988.

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2. Section 41: Transfer by ostensible owner.—

2.1 Provision: 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.

2.2 Statutory Changes: The law relating to transfer by an obstensible owner s given under the
section 41 of the Act is now subjected to the provision of the Benami Transactions ( Prohibition
of the Right to Recover Property) Act, 1988. According to Sec. 2(a) benami transaction means
any transaction which property is transferred to one person for a consideration paid or provided
by another prson. This Act provides that where a property is transferred benami )i.e. in the name
of other), the person, in whose name the property is held is called the real owner.

The Benami Transactions Act, 1988 provides that no suits, action or claim to enforce any right in
respect of any property held benami against the person in whose name the property is held or any
other person shall lie by the person claiming to be the real owner of the property. In other words,
the real owner now after the enforcement of this Act cannot claim the property from the
benamidar by any suit, claim or action.

However, an exception has also been given in the Benami Transaction Act, 1988 where the
above-stated rule will not apply:—

(a) Where the person in whose name the property is held is a coparcener in a Hindu Undivided
Family and the property is held for the benefit of the co-parceners in the family, or

(b) Where the person in whose name the property is held is a trustee or other person standing in a
fiduciary capacity, and the property is held for the benefit of another person for whom he is a
trustee or towards whom he stands in such capacity.

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2.3 Law prior to Benami transaction Act,1988: Section 41 of the TPA before the
commencement of the Benami Transaction Act,1988 is being discussed as it is applied to the
areas where the particular Act is not applied.

2.3.1 Ostensible Owner: he is the person who has all the indicta of ownership without being the
real owner. He is a person who is apparently the unqualified and full owner and not a person who
is a qualified owner like a mortgagee or hirer of goods. Without being the actual owner duch
person has apparently all the characteristics of a rel owner.thus, a person may have possession
and enjoyment of the property and may also not be the real owner of that property. This kind of
situation arises when the person purchases some property in name of some other person. Such
kind of situation is known as Benami Transaction. The person in whose name the property is
purchased in known as Benamidar.

In the case of Muhammad Sulaiman v. Sakina Bibi2, the court held that a person does not
become ostensible owner if the real owner has entrusted him with temporary control over the
property for some specific purpose or, where he holds a property as a professed agent or as a
guardian of minor’s property or in any fiduciary character. A manager cannot be treated as an
ostensible owner even though his name is in the Municipal records.

2.3.2. Transfer by ostensible owner : where an immovable property is transferred by an

ostensible owner with express or implied consent of the real owner, the transfer cannot be denied
by the real owner provided that the transferee in good faith has exercised reasonable care in
finding out the transferor’s power to make the transfer and the transfer is for consideration.

2.4. Essential Requirements of the Section:

The following conditions are necessary for the applicability of this section:—

(1) The transferor must be an ostensible owner,

(2) The transfer of property to the ostensible owner must be with express or implied consent of
the real owner.

(3) The transfer by the ostensible owner must be for consideration.

2
MR (1922) All. 392

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(4) The transferee must have acted in good faith, taking reasonable care in ascertaining that the
transferor has the power to make the transfer.

2.4.1 The transferor must be an ostensible owner: In the case of Jayadayal Poddar v Bibi
Hazra3 the SC held that held that whether a person is an ostensible owner or not is a substantive
question to be decided on the basis of facts and circumstances. The following considerations
must be taken into account in deciding upon the fact of ownership—

(i) Source of the purchase-money, i.e., who paid the price of the property?

(ii) Nature of possession after the purchase, i.e., who had the possession of property?

(iii) Motive of giving benami colour to the transaction, i.e., why the property was purchased in
the name of other person?

(iv) Relationship between the parties, i.e., whether the ostensible owner and the real owner were
friends, strangers or relatives?

(v) Conduct of the parties in dealing with the property, i.e., the conduct who used to take care of
the property and who had control over the property?

(vi) Custody of the title deeds, i.e., who had the title-deeds?

2.4.2 Express or Implied Consent of Real Owner:

It is necessary that the transfer of property must be made by the ostensible owner with the
express or implied consent of the real owner. The consent must be a real consent. It must not
have been obtained by fraud, coercion, force or undue influence258 practised by the ostensible
owner on the real owner of the property.

Ramcoomar Koondoo v. Macqueen4 This section based on the rules laid down by the privy
council inthis case. The facts of the case is as follows:

Alexandra purchased sone property in name of his wife named Bunnoo Bibee, he had two
children out of this wedlock. Macqueen was one of the them. The sale-dded was in favour and

3
AIR 1974 SC 171
4
(1872) 11 Beng. LR46,52IA

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same was managed by Bunnoo Bibee. During the life time Alexandra, Bunnoo Bibee sold the
property to Ramdhone who is the father of Ramcoomar. After the death of Bunnoo Bibee,
Macqueen filed a suit against Ramdhone on the ground that her father (Alexendra) has left a will
in her favour and that her father was the real owner of the property and Bunnoo Bibee was
merely an ostensible owner. Ramdhone pleaded that he was bona fide purchaser snd hsd no
notice of benami title. The Calcutta HC ruled in favour of Macqueen, aggrieved party
approached to Privy Council and the same was entertain, the Privy Council held that even
assuming that Alexander was the real owner and the Bunnoo Bibee was merely an apparent
owner, since Alexander had allowed i.e.implied consent to Bunnoo Bibee to hold herself out as
the real owner, he or his representatives could not recover upon their secret title unless they
could prove that the purchaser had direct or constructive notice of the real title. The Privy
Council observed:

"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 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."

2.4.3 Transfer for Consideration:

The protection of this section is available only when the transfer is for consideration. If the
transfer is without consideration, i.e., gratuitous, this section will not apply. This protection is
also not available to gifts.

2.4.3 Good Faith and Reasonable Care:

The protection of this section will be available only for that person whose own conduct is just
and equitable. Where a man purchased a property after due inquiry and honestly believing that
the seller was the real owner, he will protected against the real owner. But where the purchaser
after enquiry found that the seller was only ostensible owner not the real owner, and even then he

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purchased the property for him, he would not be taken to act honestly. Therefore, the protection
of this section will not be available to him.

The protection of bona fide transferee for the value under this section is not limited to first
transferee. A transferee from the first transferee and every subsequent transferee is entitled to the
protection of this section provided transfer in his favor fulfills the condition prescribed here.

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3.Conclusion

Section 41 of the Transfer of Property Act serves an exception to the general rule of transfer.
Ostensible owner is not the real owner but who can represent himself as the real owner to the
third party for such dealings. The section states that the transfer by ostensible owner to be valid
and binding on the real owner if all the condition of the section is fulfilled. The present scenario
of this provision is that it is subject to Benami Transaction Act, 1988. This section based on
equitable principle "he who seeks equity must do equity".

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 4. Bibliography

• The Transfer of Property Act, 1882, No. 4, Acts of Parliament,1882

• Dr. R.K. Sinha, The Transfer of Property Act, (2Oth ed.2019)
• Avtar Singh & Harpreet Kaur,,The Transfer of Property, (6thed.2020)
• Dhruvi Dharia, Ostensible owner, lawtimesjournal,(Feb 7,2020)
http://lawtimesjournal.in/ostensible-owner/
• Siddhant Sharma, Ostensible owner TPA, academike, ( April 4,2015)
https://www.lawctopus.com/academike/ostensible-owner-under-tpa/
• https://www.manupatrafast.com/

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