Doctrine - Feeding The Grant By Estoppel – Sec. 43 Transfer of Property Act
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 estoppel' or as the doctrine of Equity that 'equity' treats that 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 application. In order that Section 43 may apply there must obviously have been a fraudulent or erroneous representation by a person that he was authorised to transfer immoveable property and he must have professed to transfer such property, but there is nothing in the section requiring that the trans-feror should have been aware of the erroneousness of the representation made by him. The transferor might have honestly believed in the truth of the representa-tion that he was authorised to transfer the property which he professed to transfer, but that would not render the Section inapplicable.
It will be noted that even before the introduction of the word 'fraudulently' 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 it the transferor is un aware of the erroneous nature of the representation made by him. The matter is concluded by the following observations of the Supreme Court in the case of Tumma Masjid Mercara v. Kodimaniandra Deviah, AIR 1962 S C 847 :--
"It is immaterial whether the transferor acts bona fide or fraudulently in making the representation. It is only material to find out whether in fact the transferee has been misled. It is to be noted that when the decision under consideration was given the relevant words of Section 43 were 'where a person erroneously represents', and now, as amended by Act 20 of 1929 they are 'where a person fraudulently or erroneously represents' and that emphasises that for the purpose of the section it matters not whether the transferor acted fraudulently or innocently is making the representation, and that what is material is that he did make a representation and the transferee has acted on it."
The point next to be considered is whether a transferee is deprived of the benefit of Section 43 if he is aware of the erroneousness of the representation or could have discovered its ertoneousness by exercising reasonable care or pursuing reasonable inquiry. In connection with the first part of the question reference must be made to the Full Bench decision of this Court in the case of Parma Nand v. Champa Lal, (S) AIR 1956 All 225, although the question has now to be decided in accordance with what has been laid down by their Lordships of the Supreme Court in the Jumma Masjid case, AIR 1982 S C 847. The question referred to the Full Bench in Parma Nand's case, (S) AIR 1958 All 225 was:
"Does Section 43, T. P. Act, require that the transferee who can take advantage of it should be one to whom not only a fraudulent or erroneous representation about the transferor's authority to transfer the property is made but should also be one who did not have knowledge of the true factual position and had merely acted on the belief of the erroneous or fraudulent representation made to him by the transferor."
The answer given by Agarwala, J. in which the other Judges constituting the Full Bench con- curred was as follows :
"I am clearly of opinion that the correct view is that Section 43, T. P. Act, does not require that the transferee who can take advantage of it should be one to whom not only a fraudulent or erroneous representation about the transferor's authority to transfer the property is made but should also be one who did not have knowledge of the true factual position and had merely acted on the belief of the erroneous or fraudulent representation made to him by the transferor.
If, however, both the transferor and the transferee knew of the true position, and colluded to enter into a transaction which is invalid in law, the state of knowledge of the transferee becomes material and Section 43 cannot be availed of by him."
In the Jumma Masjid case, AIR 1962 S C 847, however, the Supreme Court laid down the law as follows :
"Where the transferee knew as a fact that the transferor did not possess the title which he repre-sents he has, then he cannot be said to have acted on it when taking a transfer. Section 43 would then have no application ....."