DR.

RAM MANOHAR LOHIYA NATIONAL LAW

UNIVERSITY, LUCKNOW.

PROPERTY LAW- I
FINAL DRAFT
Section 43 is not applicable when defective of title is known to both
the parties
Under The Guidance of:

Submitted by:-

Dr. Radheyshyam Prasad

Gulafsha

Assistant Professor

Enrol. no.140101061

Dr. RMLNLU

V Semester

Signature of Professor
student

Signature of

ACKNOWLEDGEMENT

I take this opportunity to express my profound gratitude and deep regards to my guide,
Assistant Professor Mr. Radheyshyam Prasad for their exemplary guidance, monitoring
and constant encouragement to give shape to this project. The blessing, help and guidance
given by them time to time shall carry me a long way in the journey of life on which I am
about to embark.

I also take this opportunity to express a deep sense of gratitude to my respected seniors who
share their cordial support, valuable information and guidance, which helped me in
completing this task through various stages.
Lastly, I thank the almighty, my parents, brother, sisters and friends for their constant
sencouragement without which this assignment would not have been possible.

Gulafsha

TABLE OF CONTENTS
1. INTRODUCTION: Section 43
2. ESSENTIALS

Representation
Transfer for consideration
Transfer forbidden by law
Transfer of spes successionis
The option of the transferee
The right of the second transferee

3. DOCTRINE OF FEEDING THE ESTOPPEL BY GRANT

4. APPLICABILITY OF SECTION 43
5. COMAPARISON

Section 6(a) and 43 Compared

Section 41 and 43 compared

6. CONCLUSION
7. BIBLIOGRAPHY

INTRODUCTION
SECTION 43:
Transfer by unauthorized person who subsequently acquires interest in property
transferred: Where a person fraudulently or represents that he is authorized to transfer certain
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immovable property, and professes to transfer such property for consideration, such transfer
shall, at the option of the transferee, operate on any interest which the transferor may acquire
in such property at any time during which the contract of transfer subsists. Nothing in this
section shall impair the right of transferees in good faith for consideration without notice of
the existence of the said option.
Illustration: A, a Hindu who has separated from his father B, sells to C three fields, X, Y and
Z, Representing that A is authorized to transfer the same. Of these fields Z does not belong to
A, it having been retained by B on the partition; but on Bs dying A as heir obtains Z. C, not
having rescinded the contract of sale, may require A to deliver Z to him.
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, and
Section 43 would not then apply and the transfer will fail under Section 6(a). But where
transferee does act on the representation, he will have the benefit of the equitable doctrine
embodied in Section 43, however fraudulent the act of the transferor might have been.
In S. Kanaka Durga Manikyhamba vs. Ramapragada Surya Prakash Rao1, it was held case
that Section 43 does not cover cases where transferee already knows that the transferor does
not hold either a good title to the property or is not authorised to transfer the same. He is
expressly made to believe otherwise.
Exception:
The exception protects the transferees in good faith without having notice of the option. The
option can be exercised against an heir of the transferor and all persons claiming under him
except a purchaser in good faith for consideration without notice of the existence of the
option.2

ESSENTIALS
To attract the application of the above section, three conditions are necessary:
1 AIR 2010 AP 99.
2 http://legalsutra.com/category/uncategorized/page/2/.
4

a fraudulent or erroneous representation that the transferor had authority to transfer

the property,
the transfer is for consideration,
the transferor subsequently acquires the interest which he had professed to transfer.

Representation:
In order that Section 43 can apply, it is necessary that there should be misrepresentation,
fraudulent or erroneous, about the right to transfer the property. The word represents in the
section clearly shows that the person in whose favour the enquiry is allowed to operate must
have acted on the representation. In other words, the transferee must have been misled into
the impression that the transferor had power to transfer. In Jharu Ram Roy vs. Kanijet
Roy3, it was held that What is material is that the transferee must be misled. If there is no
representation by the transferee, it means that the transferee was not mislead but actually
knew about the defect in the title. It is only when the transferee is led to believe of absolute
interest or title on part of the transferor and acts on that representation, that he is entitled to
take advantage of the fact that the transferor subsequently gets the full interest or becomes
the owner of the property. It connotes that transferee is not aware of the facts and acts on the
representation as there would be no estoppel if the truth is known to both the parties.
The benefit of this section cannot be claimed by the transferee if he did not believe in or act
upon the representation. There is no estoppel when truth is known to both parties.
Accordingly if he is aware of the defective title he cannot get the benefit. Thus, where an
undivided Hindu father had two sons A and B, A who was entitled only to one-third of the
property, mortgaged one-half of it to C, who knew that A was entitled to one-third.
Subsequently, As father died and A having become to a half share, C sued on the mortgaged
seeking to make As half share liable, it was held that he could enforce the mortgage only
against the one-third. Even in cases where no representation is made, the transferor may on
equitable ground be compelled to perform the contract when he is able to do so upon the
acquisition of the interest.
Where evidence regarding the representation is vague and the true facts were known to those
who purchased the plots, it cannot operate to create any title. Estoppel is but a rule of
evidence and except in cases like those under Section 43 T.P. Act, when a grant is led by
3 (2009) 4 SCC 60.
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estoppel the rule does not operate to create interest in property regarding which the
representation is made.

Transfer for consideration:

The doctrine of 'feeding the estoppel by grant' is applicable only to the transfers of properties
for value. This section is not applicable where the transfer is gratuitous, i.e., without
consideration. Thus, where the property has been transferred by way of gift, the provisions of
this section cannot apply because a gift, the provisions of this section cannot apply because a
gift of property in which the donor has no present fixed right at the date of transfer, is void.

Transfer forbidden by law:

The section will not apply if the transfer is invalid as being forbidden by law or contrary to
public policy. In such a case the principle of this section cannot be invoked to compel a
person to transfer the property. A mortgage made by a disqualified person does not therefore
become valid on that person ceasing to be disqualified. Similarly, the interest of a Hindu
reversioner is spes successionis or a mere chance of succession under Section 6(a) and this
chance of succession is inalienable. If therefore, the reversioner transfers such interest and
afterwards acquires the property, this section will not operate so as to compel such heir to
transfer the property. But in Juma Masjid v. Kodimaniandra Deviah, the Court has held that
even in case of spes successionis, the transferor is precluded from questioning the validity of
the transfer if he later on acquires interest in the property. It is submitted that a distinction
should be drawn between a transfer which is professedly one of a mere right or a mere
chance of succession, and a transfer of a specific property which the transferor erroneously
represents that he is authorized to transfer. Transfer of the former class would fall within the
purview of Section 6(a) while those of the latter class would come under this section.

Transfer of spes successionis:

When a person transfers property representing that he has a present interest therein, whereas
he has, in fact, only a spes successionis, the transferee is entitled to the benefit of Section 43
if he has taken the transfer on the faith of that representation and for consideration. To hold
that the transfers by the persons have only a spes successionis at the date of the transfer, are
not within the protection afforded by Section 43, would destroy its utility to a large extent.
Where the transfer of spes successionis is valid, the principles of Section 43 have been
applied in several cases. If, therefore, A mortgages certain properties in which he has only
reversionary interest, the mortgaged becomes effective when subsequently A acquires an
absolute interest in the property through succession.

The option of the transferee:

According to the present section the option of the transfer can only be exercised in the respect
of an interest acquired by the transferee whilst the contract of transfer still subsists. If the
purchaser has repudiated that transaction had recovered his purchase money, or if the
transaction were one of mortgage and the mortgage money has been repaid, then the relation
of the transferor and transferee has ceased to exist, and no claim in respect of the property can
be made by the latter.

The right of the second transferee:

The second paragraph of the section protects the rights of the second transferee in good faith
and for consideration who has no notice of the option in favour of the first transferee.
For instance A, a Hindu, who has been separated from his father, B sells to C three fields X,Y
and Z representing that he is authorized to transfer the same. Of these fields, Z does not
belong to A, it having been retained by B on the partition, but on B's dying A as heir obtains
Z. Before C calls upon A to deliver Z to him, A again sells Z secretly to E who has no notice
of the previous sale to C nor of the option of C. C sues A and E for recovery of Z. This suit is
liable to be dismissed for the reasons mentioned above. In this illustration E has paid
consideration. Secondly, he has acted honestly. Thirdly, E has no notice of the existence of
the option of C Fourthly, E purchased the property before C has exercised the option for these
reasons E acquires a good title to Z and cannot be ousted by C.

DOCTRINE OF FEEDING THE ESTOPPEL BY GRANT

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The principle embodied in Section 43 of the Transfer of Property Act has been variously
described as the Common Law doctrine of 'feeding the grant by estoppel' or as the doctrine of
Equity that 'equity' treats that as done which ought to be done' or as a combination of both,
but, a statutory shape having, been given to the principle, it is the section itself which must
ultimately determine its scope and the conditions of its application. In order that Section 43
may apply there must obviously have been a fraudulent or erroneous representation by a
person that he was authorized to transfer immoveable property and he must have professed to
transfer such property, but there is nothing in the section requiring that the transferor should
have been aware of the erroneousness of the representation made by him. The transferor
might have honestly believed in the truth of the representation that he was authorized to
transfer the property which he professed to transfer, but that would not render the Section
inapplicable. It will be noted that even before the introduction of the word 'fraudulently' into
the section in 1929, erroneous representation was construed as including all representations
whether tainted or untainted with fraud. The amendment has now made it clear that the
section will be applicable even if the transferor is unaware of the erroneous nature of the
representation made by him.
The matter is concluded by the following observations of the Supreme Court in the case of
Tumma Masjid Mercara v. Kodimaniandra Deviah:4 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 is making the representation, and that
what is material is that he did make a representation and the transferee has acted on it."The
point next to be considered is whether a transferee is deprived of the benefit of Section 43 if
he is aware of the erroneousness of the representation or could have discovered its
erroneousness by exercising reasonable care or pursuing reasonable inquiry. In connection
with the first part of the question reference must be made to the Full Bench decision of this
Court in the case of Parma Nand v. Champa Lal, 5, although the question has now to be
4 AIR 1962 S C 847.
5 AIR 1956 All 225.
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decided in accordance with what has been laid down by their Lordships of the Supreme Court
in the Jumma Masjid case6. The question referred to the Full Bench in Parma Nand's case,7
was: "Does Section 43 of T. P. Act, require that the transferee who can take advantage of it
should be one to whom not only a fraudulent or erroneous representation about the
transferor's authority to transfer the property is made but should also be one who did not have
knowledge of the true factual position and had merely acted on the belief of the erroneous or
fraudulent representation made to him by the transferor." The answer given by Agarwala, J. in
which the other Judges constituting the Full Bench concurred was as follows:
"I am clearly of opinion that the correct view is that Section 43, T. P. Act, does not require
that the transferee who can take advantage of it should be one to whom not only a fraudulent
or erroneous representation about the transferor's authority to transfer the property is made
but should also be one who did not have knowledge of the true factual position and had
merely acted on the belief of the erroneous or fraudulent representation made to him by the
transferor. If, however, both the transferor and the transferee knew of the true position, and
colluded to enter into a transaction which is invalid in law, the state of knowledge of the
transferee becomes material and Section 43 cannot be availed of by him."
In the Jumma Masjid case, however, the Supreme Court laid down the law as follows:
"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.
The principle of the section is based partly on the English doctrine of estoppel by deed and
partly on the equitable doctrine that a man who has promised more than, he can perform must
make good his promise when he acquires the power of performance. 8 The English doctrine of
estoppel by deed as enunciated in Rajapakshi v. Femando,9 is as follows:

6 AIR 1982 S C 847.

7 AIR 1958 All 225.
8 Tilakdhari Lal vs Khedan Lal, AIR 1921 P.C. 112.
9(1920)A.C.892.
9

Where a grantor has purported to grant an interest in land, which he did not at the time
possess but subsequently acquires, the benefit of the subsequent acquisition goes
automatically to the earlier grantee, or as it is usually expressed, feeds the estoppel.
The section follows the English doctrine in that the subsequent estate passes to the transferee
without any further act of the transferor. But it departs from the English doctrine in two
respects. First, the estate does not pass instantly but only at the option of the transferee.
Second, the transferee may be defeated by a purchaser for value without notice.
Section 43 embodies a 'rule of feeding the estoppel' and enacts that a person who makes a
representation shall not be heard to allege the contrary as against a person who acts thereupon
and it is immaterial whether the transferor acts bona fide or fraudulently in making the
representation.10
In order to get the benefit of the said provision, the conditions which must be satisfied are:

the contract of transfer was made by a person who was competent to contract; and
the contract would be subsisting at the time when a claim for recovery of the property
is made.

It simply provides that when a person by fraudulent or erroneous representation transfers

certain immovable property, claiming himself to be the owner of such property, then such
transfer will subsequently operate on any interest which the transferor may acquire in such
property during which the contract of transfer subsists. This doctrine known in English law
has form part of Roman Dutch law, according to which whereas granter has purported to
grant an interest in the land which he did not at the time possess, but subsequently
acquires, the benefit of his subsequent acquisition goes automatically to the earlier
grantee. In other words, where a vendor sells without title in the property, but subsequently
acquires title then a right accrues to the purchaser to claim interest in the said property and it
automatically goes in favour of the transferor.
The principle embodied in section 43 of the Act, whereby a transferee calls upon the
transferor to deliver the subsequently acquired property to him lies in the doctrine of estoppel
which requires that the transferor must deliver the subsequently acquired property to the
transferee who acted upon his false representation and did harm to himself by paying money
10 Jumma Masjid, Mercara v. Kodimaniandra Deviah, AIR 1962 SC 847.
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for what he could not get, and thereby, feed the estoppel, created against him. A person who
has alienated property to which he has not present title may subsequently become entitled to
the property. In such a case, since he cannot derogate from his own grant, his subsequently
acquired interest feeds the estoppel raised by the prior grant and perfects the title of the
grantee.
Further, according to the doctrine of feeding the grant by estoppel if a person is not the owner
of property but he fraudulently represents himself as an owner and makes the transfer of
property to a transferee who purchases it in good faith and for consideration, the rights of
transferee cannot be impaired. In this case the transferee may either rescind the contract or
may keep the contract alive. If the transferee keeps the contract alive and in future if the
transferor acquires interest in such property (which did not belong to him at the time of sale)
the property will automatically get transferred in the hands of transferee.
In Kartar Singh vs. Harbans Kaur 11, the Court held :
"Section 43 feeds its estoppel. The rule of estoppel by deed by the transferor would apply
only when the transferee has been misled. The transferee must know or put on notice that the
transferor does not possess the title which he represents that he has. When note in the sale
deed had put the appellant on notice of limited right of the mother as guardian, as a
reasonable prudent man the appellant is expected to enquire whether on her own the mother
as guardian of minor son is competent to alienate the estate of the minor. When such acts
were not done the first limb of Section 43 is not satisfied. It is obvious that it may be an
erroneous representation and may not be fraudulent one made by the mother that she is
entitled to alienate the estate of the minor. For the purpose of Section 43 it is not strong
material for consideration. But on declaration that the sale is void, in the eye of law the
contract is non est. to the extent of the share of the minor from its inception. The second limb
of Section 43 is that the contract must be a subsisting one at the time of the claim. A void
contract is no contract in the eye of law and was never in existence so the second limb of
Section 43 is not satisfied."

11 (1994) 4 SCC 730.

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APPLICABILITY OF SECTION 43
The option exercised by the transferee under Section 43 is not required to be exercised
in express terms or in a particular form. The exercise of option by the transferee can
be implied from the very fact that the plaintiff has been claiming his right over the
entire property and that he was proceedings against not only the transferor but also the
so-called subsequent transferees.
Considering the scope of Section 43 on its terms, it clearly applies whenever a person
transfers property to which he has no title, on a representation that he has a present
and transferable interest therein, and acting on that representation, the transferee takes
a transfer for consideration. When these conditions are satisfied, the section enacts
that, if the transferor, subsequently acquires the property, the transferee becomes
entitled to it if the transfer has not in meantime been thrown up or cancelled and is
persisting. There is an exception in favour of transferees of consideration in good faith
and without notice of the right under the prior transfer.
The provisions of Section 43 would have no application if the transfer was invalid as
being forbidden by law or contrary to public policy, as envisaged under Section 23 of
the Indian Contract Act. Thus, no estoppel can be pleaded contrary to the provisions
of a statute. The 'rule of feeding the estoppel' shall apply in absence thereof.
A plea of estoppel cannot be raised against a minor who had transferred property on
representation that he was of age, and Section 43 does not apply to such transfers. But
section 43 deals with transfers which fall for want of title in the transferor and not
want of capacity at the time of transfer. Further, the doctrine of estoppel does not
apply to persons who have no contractual capacity where the claim is based on
contract.
In Jumma Masjid v. Kadimaniandra Deviah12, it was held by the Court that the principle of
feeding the estoppel recognised in S. 43 of the Act would apply to a case where a reversioner
purports to transfer properties to which he has only a chance of succeeding if he has
represented to the transferee that he was absolutely entitled to the properties and if he
12 AIR 1962 SC 847.
12

subsequently acquires title to the properties. The Court held though S. 43 would not apply
when the transferee knew the facts, there was no reason why a transferee who was not aware
of the true facts and who acted on the fraudulent representation should not have the benefit of
the equitable doctrine embodied in S. 43.
If a Hindu dies leaving behind two widows, they succeed as joint tenants with a right of
survivorship. They were entitled to obtain partition of the separate portions of property so
that each may enjoy her equal share of the income accruing there from. Each can deal as she
pleases with her own life interest but she cannot alienate any part of the corpus of the estate
by gift or will so as to prejudice the right of survivorship or a future reversioner. If they act
together, they can burden the reversion with any debts owing to legal necessity but one of
them acting without the authority of the other cannot prejudice the right of survivorship by
alienating any part of the estate. The mere fact of partition between the two, while it gives
each a right of separate estate, does not imply a right to prejudice the claim of survivorship to
enjoy full fruits of the property during her lifetime.
The transfer made by one daughter without the consent of the other was only voidable at the
instance of the other co-limited owners or at the instance of the reversionary. In any case Smt.
M. after the death of her two sisters came into exclusive possession of the entire estate left by
Smt. A. widow of L. Therefore the transferees would be entitled to the protection of Section
43 of the Transfer of Property Act which substantially amounts to satisfying the equitable
principle of feeding the grant by estoppel.13
Applicability of Doctrine of feeding grant by estoppels: There was an auction of plot by
DDA. Auction was set aside by High Court on grounds that plot was situated in green belt
and cannot be treated as developed plot. It was held that the acceptance of bid and deposit of
25% amount does not constitute transfer of property. Mere fact that disability attached with
plot has ceased to exist on the date of petition is no ground to apply the doctrine. DDA cannot
be compelled to finalise sale and deliver possession to bidder after lapse of 14 years or in
alternative to allot another plot14.
In the case of Agricultural Produce Marketing Committee vs. Bannama, it was held that the
appellant would not be entitled to take the benefit of the doctrine of feeding the estoppel and
13 Kanpur and others v.Prem kumar and others A.I.R1985S.C.1102.
14 Delhi Development Authority v.Ravindra Mohan A.I.R.1999 S.C.1256.
13

it would not come into operation as against the grand children of the original plaintiff.
Further, the court opined that Section 43 applies when the transferor having no interest in
the property transfers the same but subsequently acquires interest in the said property, the
purchaser may claim the benefit of such subsequent acquisition of the property by the
transferor.
Section 43 will not come into operation as against the heirs who succeeded the streedhan
property of their grandmother.

COMAPARISON
Section 6(a) and 43 Compared:
Section 6(a) and 43 related to two different subjects, and there is unnecessary conflict
between them.
Section 6(a) deals with certain kinds of interests in property and prohibits transfer of those
interests. Section 43 deals with representations to title made by a transfer 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 there is no
ground for:

reading a conflict between, or

cutting down the ambit of the one by reference to the other.

Both of them can be given full effects on their own terms in their respective spheres.

Section 41 and 43 compared:

Both sections 41 and 43 are based on the principle of estoppel where on a representation
made by one party and acted upon by another, the rights of the latter are affected.

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Section 41 requires good faith, and exercise of reasonable care on the part of the transferee
and acting upon the representation is enough. The section does not cast on the transferee the
duty to make inquiry as regards the power of the transferor to transfer the property. 15
Further, whereas 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 power to make the
transfer and to act in good faith before a benefit thereof is claimed by him. Section 43, on the
other hand, enables the transferee to whom a transferor has made a fraudulent or erroneous
representation to lay hold, at his option, of any interest which the transferor may subsequently
acquire in the property, unless the right of any subsequent purchaser for value without notice
is in effect.

CONCLUSION
The principle embodied in Section 43 of the Transfer of Property Act has been variously
described as the Common Law doctrine of 'feeding the grant by estoppels' or as the doctrine
of Equity that 'equity' treats that as done which ought to be done' or as a combination of both,
but, a statutory shape having, been given to the principle, it is the section itself which must
ultimately determine its scope and the conditions of its application. In order that Section 43
may apply there must obviously have been a fraudulent or erroneous representation by a
person that he was authorised to transfer immoveable property and he must have professed to
transfer such property, but there is nothing in the section requiring that the transferor should
have been aware of the erroneousness of the representation made by him. The transferor
might have honestly believed in the truth of the representation that he was authorised to
transfer the property which he professed to transfer, but that would not render the Section
inapplicable. It will be noted that even before the introduction of the word 'fraudulently' into
the section in 1929, erroneous representation was construed as including alt representations
whether tainted or untainted with fraud. The amendment has now made it clear that the
section will be applicable even if the transferor is unaware of the erroneous nature of the
representation made by him.

15 http://mayank-lawnotes.blogspot.in/2007/01/transfer-of-property.html.
15

BIBLIOGRAPHY

BOOKS:

Pradhan, Poonam, Property Law, Lexis Nexis, 2nd Edtn, 2011.

Mulla, The Transfer of Property Act, Lexis Nexis, 10th Edtn.

SITES:

http://www.lawstudentshelpline.com/index.php/transfer-of-property-act/2uncategorised/170-q-explain-the-doctrine-of-feeding-the-grant-by-estoppel-asembodied-in-section-43-of-the-t-p-act
http://mayank-lawnotes.blogspot.in/2007/01/transfer-of-property.html
www.scconline.com
www.manupatra.com

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