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Gauhati High Court · body

1990 DIGILAW 44 (GAU)

Anowar Sheikh v. MD. Musebuddin Ahmed

1990-03-06

B.P.SARAF

body1990
This is an appeal from the judgment and decree dated 8.3.84 of the Court of Assistant District Judge No. 2 Nowgong which reversed the judgment and decree passed by the Munsiff, Morigaoii on 27.7.81 in Title Suit No. 11/80. The main question for determination in this appeal is whether defendant No. 3, who claimed to have purchased the suit land from defendant Nos. 1 & 2 is protected as bonafide purchaser for value and consideration under section 41 of the Transfer of Property Act, 1882. The case of the plaintiffs (respondents herein) was that the suit land belonged to one Muluk Munchi who was the father of the plaintiff Nos. 1 to 7. The said land was settled in the name of Muluk Munchi and later a periodic patta was also issued in his name. He was in possession of the said land during his life time and after his death it was possessed by plaintiffs No. 1 to 7 who are his legal heirs. The defendants No. 1 and 2 are the step brothers of Muluk Munchi. On 20.3.80, these two defendants, along with defendant No. 3 forcibly occupied the suit land and constructed a thatched house thereon. The plaintiffs, thereafter, filed the suit for declaration of title and recovery of possession of the suit land. The suit was contested by defendant Nos. 1 to 3. The case of the defendants was that the suit land was in possess­ion of defendant Nos. 1& 2 whose names were also entered in the chit ha. These defendants sold it to the defendant No. 3 Julhas AH and his brothers Mannas AH and Safique Islam (defendant) Nos. 3 (1) & 3 (2) on 21.4.80 for a consideration of Rs. 3010/-by a registered deed of sale and also delivered possession thereof to them. It was claimed that by virtue of the purchase of the suit land from defendants No. 1 and 2, defendant Nos. 3 (1) and 3 (2) acquired good title in the suit land. A number of issues were framed. Three witnesses were examined. On consideration of the facts of the case and the documents on record, the learned trial Court decreed the suit. On appeal, the learned Assistant District Judge, Nowgong framed an additional issue; namely issue No. 5 (a), which read as follows: "Whether the defendant Nos. A number of issues were framed. Three witnesses were examined. On consideration of the facts of the case and the documents on record, the learned trial Court decreed the suit. On appeal, the learned Assistant District Judge, Nowgong framed an additional issue; namely issue No. 5 (a), which read as follows: "Whether the defendant Nos. 3, 3(1) and 3 (2) are protected U/s 41 of the Transfer of Property Act." The trial Court, which was asked to decide this issue, held that the defendants were so protected. However, the learned first appellate Court reversed the aforesaid finding of the trial Court and held that the conditions precedent for applicability of section 41 of the Transfer of Property Act, were not present in the instant case and, and as such, the question of claiming protection there under did not arise. The findings of the trial Court on all other issues were affirmed. The appeal was dismissed and the judgment and decree of the trial Court were affirmed. Aggrieved by the aforesaid judg­ment, the present appeal has been filed by defendants No. 1 to 3. The sole question of law that arises for consideration is whe­ther the defendants Nos. 3, 3 (1) and 3 (2) were entitled to pro­tection under section 41 of the Transfer of Property Act. Section 41 provides :- "41. Transfer by ostensible owner- Where, with the consent, express or implied, of the persons interested in immovable property, a person is the ostensible owner of such property and transfers the same for consideration, the transfer shall not be viodable 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, had acted in good faith." This section is a statutory application of the law of estoppel. It provides that where a person interested in immovable property allows a person to hold himself out as an owner of such property and such person transfers the same for consideration to a third party purchaser for value, the transfer can not be challenged on the ground that the transferor was not authorised to make it. This section thus makes an exception to the rule that a person cannot confer a better title than what he himself has. This section thus makes an exception to the rule that a person cannot confer a better title than what he himself has. In order to avail the protection of this section the following con­ditions must exist :- 1) the transferor is the ostensible owner of the immovable pro­perty : 2) Such ostensible ownership is with the consent, express or implied, of the persons interested in such property : 3) the transfer is for consideration : 4) the transferee has taken reasonable care to ascertain that the transferor had power to make the transfer : 5) after taking such reasonable care, he has acted in good faith. All the conditions mentioned above are cumulative and not alter­native. If any one of these conditions is non-existent, section 41 shall not apply. Before we examine the facts of the present case to ascertain whe­ther section 41 will apply or not, it will be worthwhile to discuss, in brief, some of the conditions mentioned above, which are re­levant for deciding the present case. One of the conditions is that the transferor is the " ostensible owner “ of the immovable property. The expression " ostensible owner " has not been defined in the Act To determine the true meaning of this expression, we may, therefore, refer to some of the definitions as given in the law dictionaries. The Oxford Companion to Law by David M. Walker defines "ostensible” as that which is shown or disclosed by or apparent from circumstances, whate­ver the reality may be. Thus, ostensible agency "is the power to act as agent indicated by circumstances, though the person may not truly have had such power at all. " In Black's Law Dictio­nary 'ostensible ownership” has been defined to mean- "Apparent ownership derived from conduct or words. Theory of 'ostensible ownership' estops an owner of property who clothes another with apparent title from later asserting his title against an innocent third party who has been induced to deal with apparent owner. " We may also refer to the definition of 'ostensible partner,' as given in the said dictionary- " One whose name appears to the world as such, though he have no interest in the firm. From the aforesaid definitions, it is clear that ostensible owner is a person who holds himself out as the owner of immovable property with the consent of the person interested in it. From the aforesaid definitions, it is clear that ostensible owner is a person who holds himself out as the owner of immovable property with the consent of the person interested in it. The ostensible owner is the apparent owner. Thus, a benamdar is an ostensible owner. A person who is in possession of a property can not be trea­ted as ostensible owner with the consent of the person interested in the property simply by virtue of his possession. For example a Manager in possession of a property cannot be treated as its ostensible owner unless it can be shown that he had held himself out as its owner with the consent of the real owner. Transfer by a person who is not an "ostensible owner "does not attract sec­tion 41 and the protection conferred by it is not be available even to transferee from such a person for consideration. Besides, even if a person is found to be an ostensible owner, it will be necessary for the transferee to further prove that such “ ostensible ownership" was with the consent, express or implied, of the person interested in the property i.e. the real owner. The "consent" in this section, however, has reference to the ostensible ownership of the transferor and not to the transfer made by such ostensible owner. It is, therefore, not necessary for the transferee to prove that the real owner had consented to the transfer of the property by the ostensible owner. It is enough if he had consen­ted to the "ostensible ownership." In order to get protection of section 41, it is further necessary for the transferee to show that he had made the usual enquiry into the title or in other words that he has taken reasonable care to ascertain that the transferor had the power to make the transfer. A transferee, who does not make any enquiry into the title, can not be said to have taken reasonable care. The reasonable care required by the section is with reference only to the ascertainment of the fact that the transferor had power to make the transfer. In other words, the transferee has to ascertain the authority of the ostensible owner to transfer the property. What is reasonable care will, however, depend upon the facts and cir­cumstances of each case. The reasonable care required by the section is with reference only to the ascertainment of the fact that the transferor had power to make the transfer. In other words, the transferee has to ascertain the authority of the ostensible owner to transfer the property. What is reasonable care will, however, depend upon the facts and cir­cumstances of each case. But whether on the facts of a particu­lar case, it can be said that reasonable and sufficient enquiry was made by the transferee to attract the application of this section or not is a question of law. The duty of the transferee, however, does not end there. It is further necessary for him to prove that he had acted in good faith. Acting in good faith means that he had acted honestly and in the belief that the ostensible owner was the real owner. The transferee having notice of the real owner's title to the property, cannot be said to have acted in good faith in purchasing property from a person other than the real owner. In other words, where the defect in vendor's title was known to the transferee, the trans­fer cannot be held to be one in good faith. The transferee will be protected only if he can prove both the requirements that he had taken reasonable care to ascertain that the transferor had power to make the transfer and he had acted in good faith. A trans­feree who refrained from making enquiries that would have revea­led the real state of affairs cannot be allowed to plead good faith. Besides, the question of applicability of section 41 must be specifically pleaded and relevant facts must be set out in the pleading as the initial onus is on the transferee to show that the conditions laid down in section 41 did exist. In the light of the provisions of section 41 discussed above, we may now examine the respective submissions of the parties. The contention of Mr. B. L, Singh, learned counsel for the appe­llants, is that the case of the defendants squarely falls under section 41 of the Act. In support of this contention, reliance is placed on the entry of the names of the defendant Nos. 1 & 2 in the chitha and their long possession of the land. Mr. The contention of Mr. B. L, Singh, learned counsel for the appe­llants, is that the case of the defendants squarely falls under section 41 of the Act. In support of this contention, reliance is placed on the entry of the names of the defendant Nos. 1 & 2 in the chitha and their long possession of the land. Mr. Chakravarty, learned counsel for the respondent, on the other hand, submits that none of the conditions for application of section 41 have been fulfiled in the instant case. According to him the defendants 1 and 2 were at no point of time ostensible owners of the property in question. The chitha on which reliance is placed is not a docu­ment of title aid, as such, they cannot claim to be .ostensible owners on the basis thereof. He refers to a decision of the Privy Council in the case of Nirman Singh vs. Thakur Lal Rudra Pratap, AIR 1926 PC 100 wherein dealing with 'mutation', it was held that proceeding for mutation of names is not judicial proceeding in which the title to and the proprietory rights in immovable property are determined. "They are much more in the nature of fiscal in­quiries instituted in the interest of the State for the purpose of as­certaining which of the several claimants for the occupation of cer­tain denominations of immovable property may be put into occu­pation of it with greater confidence that the revenue for it will be paid.' The submission of Mr. Chakravarty is that the Assistant Settlement Officer making the chitha had no jurisdiction to determine the title of the persons found in possession the land in course of survey of the village. It is further stated by Mr. Chakravarty that the defendants have not been able to prove the other conditions of section 41 also, namely, that they have acted in good faith after taking reasonable care to ascertain that the transferor had the power to make the transfer. According to him prima facie the transferor had no ostensible ownership nor any authority to make the transfer. I have considered the rival submissions of learned counsel for both the parties. The first question for determination is whether defendants I and 2 were ostensible owners of the suit property. According to him prima facie the transferor had no ostensible ownership nor any authority to make the transfer. I have considered the rival submissions of learned counsel for both the parties. The first question for determination is whether defendants I and 2 were ostensible owners of the suit property. The claim of these two defendants is based on the entry of their names in the 'chitha.' It has been contended that their names were entered in the chitha with the consent of the owner of the property, though the learned Assistant District Judge did not accept this contention. It was observed by him that the defendants could not prove that the entities in the chiha were made with the consent of Muluk Munchi, the father of the plaintiff. Be that as it may, the real point that turns up for consideration is what is a 'chitha' and what does the entry of name of a person in it signify. For this purpose we may refer to Rule 26 of the Settlement Rules framed under the Assam Land & Revenue Regulation, 1886. The relevant portion read ; "56. Preparation of draft chitha of field index. After a village has been surveyed and demarcated a draft chitha or field index shall be prepared. The chitha shall be arranged according to the serial number of the fields in the village, and shall show, in addition to such other particulars as the State Government may direct, the name of person who is in possession of each field, and the classification of each field according to a terminology to be previously approved by the Government........." From a reading of the aforesaid Rule it is evident that a chitha is not a document of title. It is made on the basis of the actual possession of each field found on survey of a village. In the instant case, admittedly the real owner of the land was Muluk Munchi. It was mutated in his name. Periodic Patta was also issued in his favour. His name appears in the chitha .also as a possessor on which the defendants 1 and 2 want to place reliance. The land revenue was also paid by Muluk Munchi. The receipts showing payment of such land revenue are on record as Ext. 'Ga'. It was mutated in his name. Periodic Patta was also issued in his favour. His name appears in the chitha .also as a possessor on which the defendants 1 and 2 want to place reliance. The land revenue was also paid by Muluk Munchi. The receipts showing payment of such land revenue are on record as Ext. 'Ga'. Under the circumstances it is difficult to hold that the defendants 1 and 2 were ostensible owners of the suit land with the consent of Muluk Miuchi. The transferee from these defen­dants therefore, are not entitled to claim any protection under sec­tion 41 of the Act. The question of applicability of section 41 in this case may also be examined from another angle. There is nothing in the records to show that the defendant No. 3, before accepting the transfer, made any enquiry to ascertain that the transferor had any power to make the transfer. Any enquiry made by him would have revealed the true state of affairs. The mere fact that the transferee found the transferor in possession of the land or that his name was found in the chitha does not constitute reasonable en­quiry, as contemplated by the section. In fact, the defendants have failed to prove that they had taken reasonable care to ascertain the power of the transferor to make the transfer in question and that they had acted in good faith. Under the above facts and circumstances of the case, I am of the opinion that the conditions precedent for application of section 41 are non-existent in the instant case and, therefore the defendants 3, 3(1) and 3 (2) are not entitled to get protection of the said provision. I, therefore, hold that the findings arrived at by the learned District Judge are correct, and the same are hereby upheld. This appeal fails and is accordingly dismissed. No order as to costs.