INTRODUCTION

The Transfer of Property Act, 1882, was passed with the purpose of making transfer
of property easier and makes it accessible to the population at large. This Act lays
down certain general principles as to transfer of property which has to be followed.
Transfer of a property by and ostensible owner is such a concept which was
incorporated to protect the rights of innocent third parties vis--vis the property
owners. This principle was first used in the much celebrated case of Ramcoomar
Koondoo v. John and Maria McQueen by the Judicial Committee.

Ramcoomar Koondoo v. John and Maria McQueen case

In this case, the plaintiff who had inherited a property by way of a will came to know that
someone else had already purchased this property in her name and subsequently sold this
property to a third person, by making him believe that he had good title over that property.
The whole transaction was a benami transaction but was not known to anyone except the
person who sold the property. The plaintiff sued the third party for recovery of the possession
of the land but the committee held that:

It is a principle of natural equity, which must be universally applicable, that where one
man allows another to hold himself out as the owner of an estate, and a third person
purchases it for value from the apparent owner in the belief that he is the real owner, the
man who so allows the other to hold himself our shall not be permitted to recover upon his
secret title, unless he can overthrow that of the purchaser by showing, either that he had
direct notice, or something which amounts to constructive notice, of the real title, or that
there existed circumstances which ought to have put him upon an inquiry that, if
prosecuted would have led to discovery of it.

It was there by held that the plaintiff cannot take back the property form the third party and
that the transfer was a legitimate transfer in the eyes of the law. This wordings used in this
case can be seen in the S. 41 of the Act which deals with Ostensible owner.
 DEFINATION

SECTION 41 OF TP ACT:

Section 41 of the Act deals with ostensible owner and it has been defined as:

Transfer by Ostensible Owner: Where, with the consent, express or implies, of the persons
interested in immovable property, a person is the ostensible owner of such property and
transfer the same for consideration, the transfer shall not be voidable on the grounds that the
transferor was not authorized to make it: provided that the transferee, after taking reasonable
care to ascertain that the transferor had power to make the transfer, has acted in good faith.

The section lays down certain requirements to avail the benefit of this section. They are:

The primary condition is that the person who is transferring the property should be
ostensible owner.

There should be consent form the real owner, which can be implied or express form.

The ostensible owner should get some consideration in return of the property

Reasonable care has to be taken by the transferee about the authority of transferor to
the property and the transferee had acted in good faith.

It goes without saying that this section is applicable only to transfer of immovable
property and not in case of movable property.
OSTENSIBLE OWNER:

Ostensible owner is not the real owner but who can represent himself as the real
owner to the 3rd party for such dealings He has acquired that right by the willfull
neglect or acquiesces by the real owner of the property thereby making him an
ostensible owner. A person who has gone abroad for some years has given his
property to his family relative for making use of it for agricultural purpose and for
all other purposes as he may deem fit. In this case the family relative is the
ostensible owner and if during that period he sells the property to a third party, then
the real owner after coming back cannot claim his property and say that the person
was not authorized to transfer his property. An alternative case can be when the
property is in wifes name but husband used to take care of it and the other dealings
related to the property. If the husband thereby sells this property, the wife cannot
claim her property back.
 ESSENTIAL OF SECTION 41

(i) Ostensible Owner

The transfer must be made by ostensible owner.

(ii) Immoveable Property

The property must be immoveable.

(iii) Consent
The transferor must be ostensible owner with the consent express or implied, of the person
interested in the property. The section will not apply unless the ostensible ownership of a
person is consented to by the persons interested in the property.

(iii-a) Person interested

A transfer by an ostensible owner is binding only on the person interested in the property
with whose consent the transfer has been made.

(iv) Transfer for Consideration

The transfer by ostensible owner must be made for some consideration.

(v) Cannot be avoided by Real Owner

Once the transfer is made by the real owner it cannot be avoided by the real owner.

(vi) Reasonable Care

The transfer must have taken reasonable to ascertain that the transferor had power to make
transfer.

(vii) Transfer must not be Voidable

The transfer of property by the ostensible owner must not be voidable. But in must be valid
one.
 TRANSFER OF PROPERTY BY OSTENSIBLE
OWNER

(i) Authentic Transfer of Property

When persons, who have interest in immoveable property, give their express or implied
consent to some person to transfer this property to another person for some consideration,
such transfer of property is not voidable on this ground that transferor was not authorized to
make such transfer.

(ii) Transferor
For transfer of property by ostensible owner, it is essential that transferor should be ostensible
owner.

(iii) Express or Implied consent of real owner

It is necessary for such transfer that a person should be ostensible owner through express or
implied consent of real owner.

(iv) Consideration
For such transfer, it is essential that ostensible owner should transfer immoveable property to
another person for some consideration.

(v) Act In Good Faith

It is also necessary for such transfer that transferee should act in good faith by taking
reasonable care to ascertain that transferor has power to transfer immoveable property.
 CASE REFERED

Jaydayal Poddar (Deceased) ... vs Mst. Bibi Hazra And Ors on 19

October, 1973

Equivalent citations: 1974 AIR 171, 1974 SCR (1) 70

Bench: Sarkaria, Ranjit Singh

PETITIONER:
JAYDAYAL PODDAR (DECEASED) THROUGH HIS L.RS ANDANOTHER

Vs.

RESPONDENT:
MST. BIBI HAZRA AND ORS.

DATE OF JUDGMENT19/10/1973

BENCH:
SARKARIA, RANJIT SINGH
BENCH:
SARKARIA, RANJIT SINGH
KRISHNAIYER, V.R.
 ACT:

Benami Transaction-Burden of proving that a particular transaction is benami lies on the

person who asserts it-This burden has to be discharged by definite proof-Essence of benami
is the intention of parties-Circumstances to be taken into consideration for determining
whether a transaction is benami or real-Source of purchase money if the most important
test.
 HEADNOTE:

The burden of proving that a particular sale is benami and the apparent purchaser is not
the real owner, always rests on the person asserting it to be so. This burden has to be
strictly discharged by adducing legal evidence of a definite character which would either
directly prove the fact of Benami or establish circumstances unerringly raising an
inference of that fact. The essence of a benanii is the intention of the party or parties
concerned; and not unoften, such intention is shrouded in a thick veil which cannot be
easily pierced through. But such difficulties do not relieve the person asserting the
transaction to be benami of any part of the serious onus that rests on him; nor justify
the acceptance of mere conjectures or surmises, as a substitute for proof. Though the
question, whether a particular sale is Benami or not, is largely one of fact, and for
determining this question, no absolute formulae or acid tests, uniformally applicable in all
situations, can be laid down; yet in weighing the probabilities and for gathering the
relevant indicia, theCourts are usually guided by these circumstances : the source from
which the purchase money came; the nature and possession of the property, after the
purchase; motive, if any, for giving the transaction a benami color; the position of the
parties and the relationship if any, between the claimant and the alleged benamidar;) the
custody of the title-deeds after the sale and the conduct of the parties concerned in dealing
with the property after the sale.
These indicia are not exhaustive and their efficacy varies according to the facts of each
case. Nevertheless the source whence the purchase money came. is by far, the most important
test for determining whether the sale standing in the name of one person, is in reality for the
benefit of another.
 JUDGEMENT

The Judgment of the Court was delivered by SARKARIA, J.-This appeal by

certificate is directed against the appellate judgment and decree, dated the 31st
October, 1962, of the High Court of Judicature at Patna. The plaintiffs-appellants
instituted a suit on 30-6-1956, in the Court of Subordinate Judge, Samastipur for a
declaration of title and possession in respect of a pucca house in Plot No. 216, Ward
III of Samastipur Municipality. It was alleged that Abdul Karim.

Keeping in view the totality of the circumstances and the probabilities of the case,
we have no hesitation in holding that the plaintiffs appellants had failed to prove that
Mst. Hakimunnissa in whose name the sale-deed (Ex.D/1) stood, was not the real
purchaser but only a benamidar of her husband. I in the result, we affirm the
decision of the High Court and dismiss this appeal with costs.
 CONCLUSION

To conclude, I can say that section 41 affords protection to bona fide

purchasers from ostensible owner, provided its condition is fully satisfied. The
rule of ostensible owner is limited to voluntary transfer and does not extend to
court sales.