REASONABLE CARE BY TRANSFEREE: ANALYSIS

Submitted to:

Dr. (Mrs.) Kiran Kori

(Faculty, Property Law)

Submitted by:

Anirudh Dewangan

(Semester 4, Section A, Roll No. 19)

HIDAYATULLAH NATIONAL LAW UNIVERSITY

Uparwara Post, Opp. Jungle Safari,

Atal Nagar, District Raipur

Chhattisgarh, 492002
Abstract

Reasonable care by a transferee is an important concept under the TPA,1882. The Act
governs the transfer of the immovable property in India and also lays down various
provisions for the transferor and the transferee. The concept of reasonable care by a
transferee refers to the duty of the transferee to act diligently and responsibly while taking
possession of the property.

Duties of The Transferee

“Section 55 of the Transfer of Property Act, 1882,” deals with the duties of the buyer or
transferee. It states that the buyer or transferee must take reasonable care of the property after
he has received the possession of the property. The section further states that the buyer or
transferee must not commit any act that would materially impair the value or usefulness of
the property.

The concept of reasonable care has been interpreted by the courts in various cases. In the case
of “Karam Singh v. Harnam Singh”1, the Punjab and Haryana High Court held that the
transferee of a property is duty-bound to take reasonable care of the property and not cause
any damage to it. The court further held that the transferee is responsible for any damage
caused to the property due to his negligence.

In another case, “Ram Murti v. Ram Pal”2, the Allahabad High Court held that the transferee
of a property must take reasonable care of the property and ensure that it is not damaged in
any way. The court observed that if the transferee fails to take reasonable care of the property
and causes damage to it, he would be liable for the damages caused.

The duty of reasonable care by a transferee is not limited to just physical damage to the
property. It also extends to ensuring that the property is not used for any illegal or
unauthorized purpose.

In the case of “Yashoda Devi v. Vishnu Dutt,”3 the Punjab and Haryana High Court held that
the transferee must take reasonable care to ensure that the property is not used for any illegal

1
  1954 AIR 581, 1955 SCR 44
2
 (2005) 139 PLR 116
3
2005 (1) AWC 578
or unauthorized purpose. The court observed that if the transferee allows the property to be
used for an illegal or unauthorized purpose, he would be held liable for the consequences.

The concept of reasonable care by a transferee is an important aspect of the TPA, 1882. The
transferee has a duty to act diligently and responsibly while taking possession of the
property and must not cause any damage to it. The courts have interpreted this duty of
reasonable care in various cases and have held that the transferee would be liable for any
damages caused due to his negligence. It is, therefore, essential for the transferee to take
reasonable care of the property and ensure that it is not used for any illegal or unauthorized
purpose.

Ostensible Owner

Transfer by an ostensible owner is another important concept under the TPA, 1882. A person
who seems like an owner to a property but is not the real owner is the ostensible owner.

Section 41 of theTPA, 1882 deals with the transfer of property by an ostensible owner.

Section 41 states that if a person transfers immovable property to another person for
consideration and the transferee takes in good faith, the possession of the property, believing
the transferor to be owner of the property, then the transfer is valid. The section further states
that if the real owner of the property challenges the transfer, the property can be retained by
the transferee if he proves that he acted in good faith and had no prior knowledge about the
actual owner’s claim.

The section provides protection to the transferee who actually acted in good faith and has no
knowledge of any defect in the transferor's title. The transferee can rely on the apparent title
of the ostensible owner and is not required to investigate the title any further.

However, the protection provided under section 41 is not absolute. The section applies only
when the transfer is for consideration. If the transfer is gratuitous, then the transferee cannot
rely on section 41 and would be liable to return the property to the real owner.

Section 41 also does not apply if the transferer knows about the defect in the transferer’s
name or title. In such a case, the transferee cannot claim protection under section 41 and
would be liable to return the property to the real owner.
The concept of transfer by an ostensible owner has been interpreted by the courts in various
cases. In the case of “Lalji Haridas v. Ratan Lal,4” the Supreme Court held that section 41
applies only to an immovable property and not to movable property. The court further held
that the transferee must prove that he acted in only good faith and had no knowledge of any
defect in the transferor's title.

In another case, “Narandas Karsondas v. S.A. Kamtam”,5 the Bombay High Court held that
the transferee must have taken possession of the property in only good faith and without any
knowledge of any defect in the transferor's title. The court observed that if the transferee had
any knowledge of the defect in the title, he would not be protected under section 41.

Transfer by an ostensible owner is an understanding that provides protection to the transferee

who had taken possession of the property in good faith and has no knowledge of any defect in
the transferor's title. Section 41 of the TPA,1882 provides the legal framework for such
transfers. However, the protection provided under section 41 is not absolute and is subject to
certain limitations. The courts have interpreted section 41 in various cases and have laid
down the conditions for the applicability of the section

Conclusion

In conclusion, the concepts of reasonable care by a transferee and transfer by an ostensible

owner are important aspects of the Transfer of Property Act, 1882. The duty of reasonable
care by a transferee requires the transferee to act diligently and responsibly while taking
possession of the property and to ensure that it is not damaged or used for any illegal or
unauthorized purpose. The courts have interpreted this duty in various cases and have held
that the transferee would be liable for any damages caused due to his negligence.

On the other hand, transfer by an ostensible owner provides protection to the transferee who
had taken up the possession of the property in good faith and has no knowledge of any defect
in the transferor's title. Section 41 of the TPA, 1882 provides the legal framework for such
transfers, but the protection provided is subject to certain limitations. The courts have
interpreted section 41 in various cases and have laid down the conditions for the applicability
of the section.

4
1964 AIR 1154, 1964 SCR (6) 700
5
1977 AIR 774, 1977 SCR (2) 341
In both cases, the law happens to protect the interests of the parties involved in the transfer of
property. The concepts of reasonable care by a transferee and transfer by an ostensible owner
plays a crucial role in ensuring that the transfer of property is done in a fair and just manner.
It is important for both the transferor and the transferee to understand these concepts and their
implications to avoid any legal complications in the future.