PROPERTY LAW

Case Review Assignment

-Deeksha Agrawal

Ba0160015

‘MD. MUSTAFA VS. HAJI MD. ISA AND ORS.’

 Introduction

The present case deals with principle of constructive notice, when it is understood to have
constructive notice and it’s importance.

Plaintiff was one of the tenant of some part of the pucca house, which belonged to Mr. Isa,
defendant. In April, 1972 Mr. Isa expressed his desire to plaintiff to sell the house as he was in
need of some money and after some negotiation they settled to sell the house for sum of 20,000
to plaintiff. Time was given to plaintiff to arrange money as he did not have that amount with
him that particular time to execute the sale deed. On 14 June,1972 Mr. Isa asked for advance of
7,000 as he was in urgent need of it and he could get the sale deed executed by Mr, Isa. The
plaintiff agreed. On 15 June, 1972 plaintiff advanced 7,000 towards the consideration of 20,000
and Mr. Isa in return executed the agreement to sell on a stamp paper and delivered to plaintiff.
According to that agreement Mr. Isa agreed to execute registered sale deed in respect of said
house in favour of plaintiff on the payment of remaining amount by the last week of January,
1973. But he put plaintiff in possession of whole building for the part performance of contract.
Plaintiff later asked for the execution of the deed which was refused and he also got to know that
other defendants were given the sale deed and claims it to be illegal for it being without
consideration and with full knowledge that the agreement was already in favour of plaintiff.
Defendant denies saying that the price offered was too low and so he rejected the offer. He
denied to have agreed to sell it for 20,000 or to execute any sale deed and the sale deed presented
by plaintiff is forged and fabricated. Mr. Isa has executed the deed in favour of some other
person for sum of 24,000 and actually registered the sale deed in their favour in 1972 and they
were put in possession of the house after that.
  Arguments and reasoning

Whether the agreement by Mr. Isa in favour of plaintiff was valid and genuine or not?

Though in India, the laws under Transfer of Property considers the valid transfers to be done
only by means of registration, be it of sale deed or agreement to sell etc. So, to make any valid
transfer it is supposed to be registered. There are certain formalities with the execution of the
deeds, most important being the attestation in presence of witness.

In present case the plaintiff was one of the attesting witness along with 5 others, out of which 2
were dead and other two deposed in favour of plaintiff. It is seen that the plaintiff did not
examine the scribe of the deed who could have been the important witness. And the scribe did
not come forward to support the plaintiff. The statement of witness who deposed in favour of
plaintiff, on close scrutiny were found lacking confidence.

The thing about Mr. Isa going to plaintiff’s hotel which is a public place full of strangers and
calling the scribe there for the execution and taking consideration of 7,000 in a public place in
absence of any of his sons or relatives, when he could have executed it in his house which was
adjacent to the hotel of plaintiff, in itself is questioning. Both the initial witnesses were
contradicted and were doubt full on examination.

Second reason for it not being genuine is that there is no proof that plaintiff was in possession or
even constructive possession of the whole house, he was just occupying one of the katra (a very
small portion) and was tenant from the times of his father, also there were 6 other tenants just
like him. He did not eve collect rent from them but the other tenants said to have paid rents to
other defendants after Mr. Isa. Plaintiff did not take any efforts to get his name mutated in any of
the documents of the house and so after looking into all this is considered that plaintiff was not in
possession of the house or the entire building.

Plaintiff got to know about the execution of deed in favour of other defendants and still did not
question Mr. Isa within durable time. The validity of the bayannama was also in question and
disputed and contradicted the plaintiff’s story.
One of the thing to be concluded that to prove the genuineness of any document and registration,
its attestation is to be proved beyond doubt.

Whether the other defendants who bought the house for sum of 24,000 are bona fide
purchasers without notice of said initial agreement?

The general principle is that the purchaser should inquire about the whole possession from the
vendor and the plaintiff also and also the person who are in possession of the building.

The principle of constructive notice is incorporated in Illustration II of Section 3 of the T.P.Act

which reads as follows:
"Any person acquiring any immovable property or any share or interest in any such property
shall be deemed to have notice of the title, if any, of any person who is for the time being in
actual possession thereof."
The court here took the support of Rameshwar Singh v. Hari Narayan Singh, which says that
when the holding of the possession is very less, the person cannot be assumed to make enquiry
about the same and the principle of constructive notice must not be followed. In the present case
the holding was only for 1/7th part and so the defendants were exempted from making any
enquiry.

 Critical analysis

In my personal opinion the principle of constructive notice of the possession must be followed as
it is i.e. in the true and fullest sense and the enquiry about even the smallest of the holdings or
possessions must be made because there are chances where a person might buy the whole
building but just live in one apartment of that building as the person cannot be expected to live in
all the apartments of the building. Exceptions such as those held in Daniel vs. Davison and Hari
Charan Kaur vs. Kaula Rai, that the holding of possession was just of 1/7th or 1/10th part and too
small be covered under constructive notice must not be held valid and enquiry means enquiry
and must be done even for a smallest of the holding irrespective. The other reason for not using
such exceptions to the principle of constructive possession is the increasing number of frauds and
money loosing cases.
Though in the present case, the situation is different because the plaintiff did not the possession
as the bayannama was not genuine and was declared fraudulent and this is not just the case of
principle of constructive notice.

As per me, with such exceptions the whole purpose of constructive notice goes in vain as there
might be cases of a person buying only some part of the property out which a smaller part is
already occupied by someone and just because the initial whole property is a big one, she is
exempted to inquire about the small parts.

 Current position of law

Current position with regard to principle of constructive notice is that of one held in Rameshwar
Singh v. Hari Narayan Singh and other cases in such line which says that the purchaser is
exempted from the principle of constructive notice and is not bound to have knowledge of the
possession if the holding of the possession is of very small area that to in a very large
community. Also, the execution of any document and their attestation must be beyond doubt.

 Conclusion

It is concluded from the above case and other citied cases in the present case is that a purchaser
is expected to have knowledge of the possession of the property she is buying, but there are
certain exceptions like if the possession is of very small area the purchaser could not be assumed
to have the knowledge of the holding and is exempted from the principle of constructive notice.