TRANSFER BY OSTENSIBLE OWNER (S. 41)
Introduction
§ An ostensible owner is that person who is not the real owner of the property but
someone who has all the indica of ownership (without being the real owner).
o The word ‘ostensible’ literally means ‘apparen t’ or ‘seemin g’.
§ He is the one who is apparently the unqualified and full owner and not a person who
is a qualified owner like a mortgagee or hirer of goods.
§ The provisions regarding transfer by ostensible owner are governed by section 41 of
the Transfer of Property Act, 1882.
Provisions Related to Transfer by Ostensible Owner
§ Section 41 of the Transfer of Property Act, 1882 deals with concept of transfer by
ostensible owner. It states that -
o 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 voidable on the
ground that the transferor was not authorized to make it.
o 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 provision is an exception to the general principle of transfer of property which
is Nemo dat quod non habet which means that no one can confer a higher right
on property than what he himself possesses.
§ The transfer by the ostensible owner underlines the doctrine of holding out.
o The doctrine of holding out protects the transferee from an ostensible owner.
And comes into play when the rights of two innocent parties come into
conflict.
The privy council in Ram Coomar v. MacQueen (1872), in regard with transfer by
ostensible owner held that ,“It is a principle of natural equity which must be
applicable where one man allows another to hold himself 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 out shall not be permitted to
recover upon his secrete title, unless he can overthrow that of the purchaser by showing a
notice, or something which amounts to a constructive notice which ought to have put him
upon an enquiry, that, if prosecuted would have led to a discovery of it.”
Essentials of Section 41
The following conditions are necessary for the applicability of this Section –
A. A person must be the ostensible owner of a property.
B. That person must be such owner with the consent (express or implied) of the real
owner.
C. The transferee must purchase the property from such ostensible owner for the
consideration.
