Transfer of title of land by ostensible owner:

Effect of Transfer of Property Act, Section 43:

The amount of deposit under Section 134 of the U.P. Zamindari Abolition Act was made on October 28, 1961 and it was on the same day that the sale deed was executed by Matbar Mal. It is clear that Matbar Mal erroneously represented to the vendee that he was authorised to transfer the property and professed to transfer such property for consideration. The very execution of the sale deed on the same day as the deposit of the requisite amount under Section 134 is significant enough to establish that the sale deed was the result of an erroneous representation by Matbar Mal. It is also clear that the present plaintiffs who are the sons of the vendor, Matbar Mal cannot possibly claim to be transferees in good faith which indeed they do not claim to be. Section 43 clearly applies to the situation.

The learned counsel for the respondents however attempted to disclaim the applicability of Section 43 of the Transfer of Property Act by referring to Jumma Masjid v. Kodimaniandra Deviah, AIR 1962 SC 847. He invited our attention to the following observations of the learned Judges: “Now the compelling reason urged by the appellant for reading a further exception in Section 43 is that if it is construed as applicable to transfers by persons who have only spes succession is at the date of transfer, it would have the effect of nullifying Section 6(a). But Section 6(a) and Section 43 relate to two different subjects, and there is no necessary conflict between them; Section 6(a) deals with certain kinds of interests in property mentioned therein, and prohibits a transfer simpliciter of those interests.

Section 43 deals with representations as to title made by a transferor who had no title at the time of transfer, and provides that the transfer shall fasten itself on the title which the transferor subsequently acquires.

Section 6(a) enacts a rule of substantive law, while Section 43 enacts a rule of estoppel which is one of evidence. The two provisions operate on different fields, and under different conditions, and we see no ground for reading a conflict between them or for cutting down the ambit of the one by reference to the other. In our opinion, both of them can be given full effect on their own terms, in their respective spheres. To hold that transfers by persons who have only a spes successionis at the date of transfer are not within the protection afforded by Section 43 would destroy its utility to a large extent.” We are unable to see in what manner these observations can possibly assist the respondents. In the same decision, it has been observed later, referring to the decision of the Madras High Court in Official Assignee, Madras v. Sampath Naidu, AIR 1933 Mad. 795:

“This reasoning is open to the criticism that it ignores the principle underlying Section 43. That section embodies, as already stated, a rule of estoppel and enacts that a person who makes a representation shall not be heard to allege the contrary as against a person who acts on that representation. It is immaterial whether the transferor acts bona fide or fraudulently in making the representation. It is only material to find out whether in fact the transferee has been misled. It is to be noted that when the decision under consideration was given, the relevant words of Section 43 were, ‘where a person erroneously represents’, and now, as amended by Act 20 of 1929, they are ‘where a person fraudulently or erroneously represents’, and that emphasises that for the purpose of the section it matters not whether the transferor acted fraudulently or innocently in making the representation, and that what is material is that he did make a representation and the transferee has acted on it. Where the transferee knew as a fact that the transferor did not possess the title which he represents he has, then he cannot be said to have acted on it when taking a transfer. Section 43 would then have no application and the transfer will fail under Section 6(a). But where the transferee does act on the representation, there is no reason why he should not have the benefit of the equitable doctrine embodied in Section 43, however fraudulent the act of the transferor might have been.”

We are of the view that Additional Commissioner, Board of Revenue and High Court committed no error in decreeing Suit No.31 of 1978.

[Source: Rakesh . vs Board Of Revenue U.P. decided by SC on 8 March, 2019]

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