TRANSFER OF PROPERTY ACT

DOCTRINE OF FEEDING THE GRANT

BY THE ESTOPPEL

1. INTRODUCTION

The Transfer of Property Act, 1882 happened to be one of the early legislations
of the nineteenth century. The Act is having an important place in the statute book
with the main objective to render the system of transfer of immovable property a
system of public transfer. Registration is therefore generally insisted upon for
completing transfer, except in cases of transactions of small value. Property is a
very wide term and would include anything which carries some value and over
which the right of ownership may be exercised. The word property in its most
comprehensive sense includes all legal rights of a person except his personal
rights, which constitute his status or personal condition1.
The principle embodied in Section 43 of the Transfer of Property Act has been
described as the Common Law doctrine of 'feeding the grant by estoppel' or as
the doctrine of Equity that treats done 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 application2. Where a person fraudulently or erroneously represents that he
is authorized to transfer certain immoveable property and professes to transfer
such property for consideration ,such transfer shall at the option of the transferee

1
Raichand v. Dattatrya AIR 1964 Bom. 344.
2
Dr. G.P. Tripathi , Transfer of Property Act, 19th Edition.
,operate on any interest which the transferor may acquire in such property at any
time during which the contract of transfer subsists3.
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 authorised to
transfer the property which he professed to transfer, but that would not render the
Section inapplicable.
This Doctrine is based on two principles:
 Common law of doctrine of estoppel by deed
 Equitable principle which says that if a person promises more than what he
can perform, he must fulfil the promise when he gets the ability to do so.
One or both the above principles are often used.
English law of estoppel is that where a grantor has purported to grant an interest
in land which he did not at the time possess but subsequently acquired the benefit
of his subsequent acquisition goes automatically to the earlier grantee or as it is
usually expressed feeds the estoppel4. The principle embodied in Section 43 of
the Transfer of Property Act has been described as the Common Law doctrine of
feeding the grant by estoppel or as the doctrine of Equity. Nothing in this section
shall impair the right of transferees in good faith for consideration without notice
of the existence of the said option.

Transfer by an unauthorized person who subsequently acquires

interest in property transferred

Where a person fraudulently or erroneously represents that he is authorized to

transfer certain 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 subsists5. Nothing in this section shall impair the

3
B.B. Mitra on Transfer of Property Act 1882, 18th ed. by S.P.Sen Gupta, 2004.
4
GC Bharuka, The Transfer of Property Act, 10th Edition.
5
Ibid
right of transferee in good faith for consideration without notice of the existence
of the said option6.
Illustration: A, a Hindu, who has separated from his father B, sells to C three
fields, M, N and O, representing that A is authorized to transfer the same of these
fields M does not belong to A, it having been retained by B on the partition; but
on B’s dying A as heir obtains M. C, not having rescinded the contract of sale,
may require A to deliver M to him.
Transfer by unauthorized person who subsequently acquires interest in that
property is bound to feed the transfer grant by estoppel. He has to pass on
whatever he gets. Provided the grantee demands it. Provided some other bona
fide purchaser for value without notice does not take that interest acquired
subsequently7.

2. ESSENTIALS TO INVOKE SECTION 43

(I) There was a representation the fraudulent or erroneous.

(ii) It was to the effect that the transferor is entitled to transfer the immoveable
property.
(iii) The transferor is found to have subsequently acquired the interest
which he professed to transfer.
(iv) The transfer of property was for consideration.
(v) The transferee has not rescinded the contract.
(vi) The transferee acted in good faith for consideration and without notice of the
rights under the prior transfer.
Amendment – The words “fraudulently or” were inserted by the amending act 20
of 1929. The effect of the amendment is to make it clear that the erroneous
representation may either innocent or tainted with fraud. The effect would be
same8.

6
Dr. Hari Singh Goyr, Commentary on Transfer of Property Act 1882,10th ed., revised by Dr. J.C. Batra, 2002.
7
G.C.V. Subbarao, Law of Transfer of Property, 4th ed. by Vepa. P. Sarathi, 2004.
8
Supra at 2.
 3. FEEDING THE ESTOPPEL

The basis of the principle embodied in section 43 calling upon the transfer to
deliver the subsequently required property to the transferee, who must have acted
upon his false representation and did harm to himself by paying money for, what
he could not get, and thereby “feeding the estoppels” created against him. If a
person, who alienated property to which he has no present title, may subsequently
become entitled to, he must honor his commitment. 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 alienee. The common law rule of
estoppels is:
“Where a grantor has purported to grant an interest in land which he did not, at
the time, posses, but subsequently acquires, the benefit of his subsequent
acquisition goes automatically to the earlier grantee, or as it is usually expressed,
feeds the estoppels9”.
Sec. 43 of the Transfer of Property Act incorporates this principal in India. The
court of equity in England, applies a similar but wider principle in that it is not
based upon an estoppel by the recitals of the deed: “The doctrine of the court of
equity is that if a man contracts to convey or to mortgage an estate, which he has
not at the time of his contract a title to, but he afterwards acquires such a title as
enables him to perform his contract, he shall be bound to do so. This principle is
well established10”.
In Hardev Singh v. Gurmail singh11 the Supreme Court involving interpreted
section 43. In this case, defendant transferred some properties to his wife in
compromise of the claim for maintenance. The wife claimed to have become
absolute owner under section 14(1) of the Hindu Succession Act, 1956. She filed
suit for declaration. During pendency, the husband sold that property to the
respondents. The wife died during pendency of suit. The purchaser claimed that
his seller (husband) had become full owner and must comply with section 41 and
43. The High Court held section 41 would not apply. The court observe, it is one
thing to say that the respondent was aware of the litigation but it is another thing
to say that he did not purchase the property on representation of Harcharan Singh
(husband). The court said that it is not clear by record whether the respondent was

9
Rajapakse v. Fernando, AIR 1920 P.C 216
10
Smith v. Osborne, 6 H.L.C. 390.
11
A.I.R. 2007 SC 1058
aware that Harcharasn Singh had no title over the property. The court held that
the principle of feeding the estoppel being inapplicable, this plea could have been
taken by Harcharan Singh and not by the appellant Hardev Singh. The appeal was
dismissed. The appellant could not get declaration prayed for to be the owner of
lands in terms of section 41 and 43.

4. ESTOPPEL OF SECTION 43

The rule enunciated by section 43, Transfer of Property Act is based partly on the
common law doctrine of “estoppels by the deed” and partly on the equitable
doctrine that a man who has promised more than, he can perform, must make
good his contract when he acquires the power of performance. “section 43 of the
Act gives expression to the rule of estoppel as well as equity regards that as done
which ought to be done12.

5. ESTOPPEL BY DEED

Estoppel by deed is that a party who executes a deed is estopped in a court of law
from saying that the facts stated In the deed are not truly stated. Where there is a
statement of fact in a deed made between the parties and the same is accepted by
them, an estoppel results and it is called estoppel by deed. It is based on the
principle that when a person has entered into a solemn agreement by deed as to
certain facts, he will not be permitted to deny any matter which he has so asserted.
It is a rule of evidence according to which certain evidence is to be taken high
and conclusive in nature so as to admit no contrary proof. The averment relied
upon to work as an estoppel must be certain to every intent and without any
ambiguity; That is, a party is estopped from denying any specific fact contained
in a deed provided the recital is certain and unambiguous13.
In Johnstone Vs. Gopal Singh14 a widow pleaded in a suit to enforce a mortgage
against her contending that the mortgage was concocted by her to defeat the claim
of her heirs. But this argument was not accepted by 1he court and the court
observed that there is nothing to prevent the defendants from proving the truth of

12
Ramdeo and another v. Dy. Director of Consolidation, U.P., A.I.R. 1968 ALL. 262.
13
William B. Stoebuck & Dale A. Whitman, The Law of Property (3d ed. 2000).
14
AIR 1931 Lahor 419.
the transaction. In this judgment the court did not rely on the contention raised by
the plaintiff in spite of the fact that there was a mortgage. As per the common
law, the mortgage has to be enforced. But in this case, the deed was not accepted
by the court and allowed the defendants to produce evidence to show the truth of
the transaction. This decision was rendered by applying the principle of equity
for rendering justice.
The doctrine of estoppels by deed is “if a man who has no title, whatever to
property, grants it by conveyance, which in form would carry the legal estate, and
he subsequently acquires an interest sufficient to satisfy the grant, the estate
instantly passes15.” The words “the estate instantly passes” are important, for
under the common law rule the estate passed without any further act of the
transferor and the estoppel prevailed even against a purchaser for value. The
application of the common law rule is complicated by many complexities, and it
does not apply in India16.

6. EQUITABLE DOCTRINE

The section is partly based on the equitable doctrine enunciated in Halroyd v.

Marshall17, Collyer v. Issacs18 and Taibly v. Official Reciever19, etc. Which
regard that as done which ought to be an equitable estate in it passes to the
transferee. But a further conveyance is necessary before the transfer is completed.
Equitable estoppel is a defensive doctrine preventing one party from taking unfair
advantage of another when, through false language or conduct, the person to be
estopped has induced another person to act in a certain way, which resulted in the
other person being injured in some way20. The distinction between this doctrine
and the doctrine of estoppels by deed is that the former simply contemplates the
case of a contract of transfer, while the latter as also section 43 of the Act
contemplate the case of a transfer completed by a conveyance. Another
distinction is, that in the former a further conveyance is necessary while in the
latter, it is not. The equitable doctrine is enacted in section 18(a) of the Specific
Relief Act, 1963, whereby a purchaser or a lessee is entitled to compel, the vendor
or the lessor, as the case may be, to make good the contract out of the interest he

15
Tilakdhari Lal v. Khedan Lal, 47 I.A. 239 at p. 254. Buckmaster, L.J.
16
Dooli Chand v. Brij Bhookun, (1800) 6 Cal L.R. 528 : Tilakdhari Lal v. Khedon Lal, 47 I.A. 239.
17
(1862) 10 H.L.C. 191.
18
(1881) 19 Ch. D. 342.
19
(1888) 13 A.C. 523.
20
Supra at 2.
has acquired subsequently to the sale or lease. In these cases, as under the
equitable doctrine in England, a further conveyance will be necessary to complete
the transaction. Section 43, however, follows the equitable in two respects,
namely-
(I) Until the option is exercised by the transferee, he is treated as a beneficiary
of the trust in respect of the subsequently acquired interest: and
(II) he is liable to be defeated by a transferee for value without notice.
The principle of the section has been held to apply to the Hindu conveyance and
to transactions before 1872 when the Indian Evidence Act enacted the equitable
rule of estoppels in section 11521.
But the doctrine of feeding the estoppels or the provision of section 43 does
not apply to the provision and restriction contained in section 5 (3) (as amended
in 1978) of Karnataka Village Office’s Abolition Act, 1961. The provision of the
said act provides immediate possession of the estate but forbids transfer for
certain period. This bar on alienation indicates that during the subsistence of bar
title vests in the state. Without title a property cannot be validly transferred22.

7. INGREDIENTS OF SECTION 43

 First: Fraudulent or Erroneous Representation

Where the representation by the transferor is fraudulent or erroneous with respect

to his authority to transfer the property, the present section will apply. It is
essential that the transferee was misled by the representation of the transferor.
Whether the representation is fraudulent or erroneous, it must be of such nature
that the transferee has believed it and on good faith acted upon it. If the fact of
the defective title of the transferor is known to both the parties, there is collusion
and section 43 cannot apply23. The representation, though required by section 43
to be fraudulent or erroneous, need not be intentionally false, “not need be in any
particular form24”. It may be by word of mouth or by a document. In a case, where
21
Krishna Chandra v. Rasik Lal, (1916) 12 C.W.N. 218.
22
M.C. Lakshminarasappa v. Asst. Commissioner. Chikkaballapur, A.I.R. 1993 Kant. 326.
23
E. Patra v. E.R. Patra, 1980 ori. 95.
24
Hatti Kudar v. Andar, 28 M.L.J. 44; Jamuna Mayee v. Koimaindra, I.L.R 1953 Mad. 427.
a Mohammedan mortgage his wife’s property purporting to act on a power-of-
attorney which was not proved, the share which he inherited on her death, was
held to be liable for the mortgage25. In Muthuswami’s case26, the father in a joint
family consisting of himself and his two sons sold the family property
representing that it was his self-acquired property and one of the sons died
pending the vendee’s suit for possession, the vendee was held entitled to the
benefit of his accession to the father’s estate and was awarded half of the property.
The section applies only when a party in possession of special knowledge makes
an incorrect statement, to the other party to the contract whereby the other party
is induced to enter into the contract and the person making the representation gets
the benefit of it27.

 Second : Subsequent Acquisition

The next requirement for section is that the transferor must acquire some interest
in the property that is transferred. In the absence of such acquisition, naturally,
the section cannot be invoked. If there is a subsequent acquisition, it does not
matter if it cannot satisfy the transferrer, the reason being that every acquisition
of interest in the property transferred ensures for the benefit of the transferee28.
Accordingly, where the plaintiff who was suing for pre-emption mortgage the
property in suit in order to raise money for the litigation in anticipation of a decree
and obtained a decree and got possession, equity treating that as done which ought
to have been done, gave the mortgage a charge on the property and placed him in
the position of a mortgagee29. The section will equally apply where the transferor
has got lesser interest than that transferred, and that interest is subsequently
enlarged, e.g. by the removal of a restriction on alienation30 or by the discharge
of a prior encumbrances31.

 Third : Transferee’s Option

25
Aisha Bibi v. Mahfuz- Unnisa, 46 ALL. 310.
26
Muthuswami Pillai v. Sandana Velan, 1927 Mad. 649.
27
A.I.R 1944 Mad. 530.
28
Mohan Singh v. Sewa Ram, 1924 Oudh 209.
29
Gayaddin v. Kashi, 29 ALL 163.
30
Mokhoda Debi v. Umesh Chandra, 7 C.L.J 381.
31
Mangappa v. Krishnayya, 29 Mad. 113.
The section only enables a transferee to claim an interest which the transferor
acquires subsequently and does not lay down the proposition that interest shall
vest in the transferee from the date of the execution of the document of transfer
in his favor32. If he fails to claim it, his right becomes subject to the right of any
other transfer in good faith to whom it may be transferred by the transferor for
valuable consideration. Again, in order to exercise the option, he must see that
the transfer subsists and that the unperformed part of it, is not rescinded by him
seeking a remedy in damages against the transferor or his representative33. Where
the transferee obtains a decree on his transfer, it is not open to him to exercise the
option in case of any subsequent acquisition of interest in the property transferred,
for a contractual obligation becomes extinguished by merger when it becomes the
subject of decree. The transferee need not immediately to give notice to the
transferor that he proposes to hold him bound by the agreement 34. The section
does not contemplate any exercise of option (such as notice) by the transferee.
All that is contemplated is indication of its existence by any overt act such as
institution of suit by the transferee35.

 Fourth : Bona Fide Purchaser for Value without notice

If demand is late and meanwhile the transferor gives that property to third person
who is bona fide purchaser for value without notice, the right of first transferee
ends and that of bona fide purchaser for value without notice prevails.

The conflict in Section 43 and 6 (a)

There appears to be some conflict between section 43 and section 6(a) dealing
with the non- transferability of spes sucoessionis and some controversy was
raised to this effect. But the supreme court in Jumma Masjid, Mercara v.
Kodimaniandra36, set at rest the controversy holding that both the provisions can
be given full effect in their respective spheres.

32
Narayan v. Laxmikant, 1955 Nag. 204.
33
Ganesh Das v. Kamlabai, 1952 Nag. 29; Sheo Ram v. Ganesh Shanker, 1954 ALL. 452.
34
Sri Jagannada v. Sri Raja Prasad Rao, 39 Mad 554; Ananda Mohan v. Gour Mohan, 50 Cal. 929.
35
A.I.R 1962 Ker. 313.
36
A.I.R 1962 S.C. 847.
 The court held that when a person transfers property representing that he has
present interest therein whereas he has, in fact, only a spes successionis, the
transferee is permitted to the benefit of section 43 if he has taken the transfer on
the faith of that representation and for consideration. There is no conflict in
sections 41 and 43 and both can operate simultaneously. In Jumma Masjid case,
an heir apparent sold his would be share in a join property to the Masjid, claimed
the subsequently acquisition under section 43 as the contract was not revoked.
The argument of the transferor was that interest at the date of transfer was one of
spes successionis and void ab initio under section 6(a). it was argued further that
a transfer void under section 6(a) cannot be validated by invoking section 43.
The Supreme Court held that section 43 would apply and subsequent
acquisition shall pass on to the Masjid. The court held section 6(a) was a rule of
substantive law whereas section 43 is a rule of evidence. It is based on estoppel.

The comparison of Section 41 and 43

Both the section 41 and 43 are based on the principle of estoppels where on a
representation made by one party and acted upon by another, the rights of the
latter are affected. Sections 41 requires –
(a) Good faith, and
(b) Exercise of a reasonable care on the part of the transferee.
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 faith37.”
But under section 43 a mere belief 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.

37
Section 41, Transfer of Property Act, 1882
https://www.advocatekhoj.com/library/bareacts/transferofproperty/index.php?Title=Transfer%20of%20Prop
erty%20Act,%201882 Visited on 5th November, 2018.
Section 43 of the Act deals with the Transfer by unauthorized person who
subsequently acquires interest in property transferred. Where a person
[fraudulently or] erroneously represents that he is authorized to transfer certain
immoveable 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 option38.

8. 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. 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. Even
way before the introduction of the word 'fraudulently' by the amendment was
bought 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.

BIBLIOGRAPGHY

Books referred

 Dr. G.P. Tripathi , Transfer of Property Act, 19th Edition.

 GC Bharuka, The Transfer of Property Act, 10th Edition.

38
Ibid.
  B.B. Mitra on Transfer of Property Act 1882, 18th ed. by S.P.Sen Gupta,
2004.
 Dr. Hari Singh Goyr, Commentary on Transfer of Property Act 1882,10th
ed., revised by Dr. J.C. Batra, 2002.
 G.C.V. Subbarao, Law of Transfer of Property, 4th ed. by Vepa. P.
Sarathi, 2004.

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 http://www.lawyersclubindia.com/articles/Doctrine-Feeding-The-Grant-By-Estoppel-
3131.asp Visited on 7th November, 2018.
 https://www.scconline.com/ Visited on 8th November, 2018.
 https://www.manupatrafast.com/articles/articleSearch.aspx Visited on 9th November,
2018.