Trasfer by ostensible owner

 Trasfer by ostensible owner

Introduction

‘Property’ acts as one of the most indispensable needs of human life. In India, the right to property was provided as a fundamental right under Article 31, but it was abrogated by the 44th Constitutional Amendment Act, 1978 and subsequently replaced by Article 300A, which made it a constitutional right instead.

Possession, contract, title documents, and other methods can be used to transfer properties from one person to another for consideration. Various laws have been created to guarantee the seamless transfer of property, whether it be movable or immovable. The Transfer of Property Act (‘the Act’) was enacted in 1882 to codify and harmonise all of the existing customary rules regarding the transfer of property. It solely deals with the transfer of property inter-vivos, that is, between living persons. 

property than what he holds i.e. ‘Nemo Dat Quod Non Habet‘. Section 41 is a well-accepted exception to this general principle. If the real owner, for example, entrusts a particular person with the title papers in any reasonable manner and makes him an ostensible owner, then a third party who (after appropriate investigation) trades with such an ostensible owner in a bona fide manner might obtain a valid title to the property as against the real owner.

whether the transferee has the power to affect the transfer is requesting and examining the title under which he claims to be the owner. If in the document itself, that is produced as the title deed for the transferee’s examination, there is any indication to put the transferee on enquiry with respect to the possibility of some other document or improper ownership of title, then the matter needs to be investigated further.  

extreme caution when acquiring the property, and these criteria were imposed by law to prevent the ostensible owner and the third party from abusing this provision. In a manner, this also protects the real owner’s interests.

In a nutshell, Section 41 of the Act, specifies the powers of the ostensible owner and discusses the nature of his transactions. The power provided by the property owner to enter transactions on his behalf is the most noticeable feature of the ostensible owner. The consent for this authority might be expressed or implied, as defined by several landmark case laws. Additionally, consent cannot be obtained by deception. Also, once done, a property transfer is irreversible at the owner’s discretion. This includes partial transfers such as mortgages and leases, as well as complete transfers of rights such as sales and exchanges. Furthermore, the law sets the burden of proof on the transferee to show that the transferor is the ostensible owner. He must also act with bona fide intention and make appropriate investigations about the progress of the transfer of property while being sufficiently cautious.