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Final Draft Subject: Law of Property-I Project Topic: A Comparative Study of Section 6(a) and Section 43 of the Transfer of Property Act 1882

Submitted to: Mr. A. K. Sinha, Assistant Professor of Law, Dr. RMLNLU.

Submitted by: Krishna Pratap Singh, Roll No. 071, Sec. (A), 5th Semester, B.A., LL.B. (Hons.), Dr. RMLNLU.

Table of Contents
01. Introduction 02. Transfer of Spes Successionis under Section 6(a) a) Scope and Object b) Essentials of the Rule 03. Doctrine of Estoppel under Section 43 a) Scope and Object b) Essentials of the Doctrine 04. Distinction between Section 6 (a) and Section 43 05. Case Study 06. Conclusion

1. Introduction
The Act merely defines certain expressions used in relation to transfer of property by act of parties and amends the (then) prevailing rules governing the same. It therefore does not purport to introduce any new principle of law. The important words used in the Act are by act of parties, and therefore, it applies and governs the transfer by act of parties only and does not govern the transfer that takes place due to operation of law. Accordingly, it does not govern transfers of property through court auction, forfeiture, acquisition or due to insolvency proceedings or government grants. It also does not govern transfers of property through intestate or testamentary succession. One of the basic objectives of the Act was to bring in harmony the rules relating to transfer of property between living persons and those applicable in case of the devolution of the same, in the event of death of a person, through intestate and testamentary succession. The Act also seeks to complete the law of contract, as most of transfers primarily arise out of a contract between the parties. The Act has also, by providing for the compulsory registration of the transfers, changed the nature of a transfer of property form a private to a public affair. Essentials of Valid Transfer: However, for a valid transfer of property whether movable or immovable, the compliance of the following conditions must be noticed under the Act (a) The property must be transferable (Section 6). (b) The transfer must be competent to transfer (Section 7). (c) Transfer must not be opposed to the nature of the interest affected thereby (Section 6(h) (1). (d) The consideration or object of transfer must be lawful (Section 6 (h) (2). (e) The transferee must be competent to take transfer (Section 6(h) (3). (f) It must be made in the manner and in the form required by the Act, if any (Section 9).

2. Transfer of Spes Successionis under Section 6(a)

A] Scope and Object:
1. General Rule of Transferability: The general policy of law is to promote free alienation and circulation of property-alienation rei praefertur juri accreseendi (i.e. alienation is favoured by the law rather than accumulation). Therefore, transferability of property and interests in property is the general rule.

4 2. Exceptions to the Rule of Transferability: Non-transferability wherein law prohibits the transfer of property in certain cases creates an exception to this rule. Clauses (a) to (i) of Section 6 enumerate ten exceptions wherein a property is not transferable. 3. Clause (a) of Section 6 (spes successionis): Section 6(a) excluded the chance of an heirapparent of succeeding to an estate from the category of transferable property. The technical expression for such a chance is Spes Successionis. Therefore, the law contained in this section 6 applies only when the transferor does not possess a valid title to the property and is merely hoping to acquire one in future, or has an interest in property that is solely by its very nature created for his personal enjoyment, or as a rule of public policy, transfer of such interests in property should not be allowed to be transferred, a transfer of property in such cases by him, are prohibited. For instance, A hopes to succeed to his fathers property on his death. His acquisition of this interest is based on a hope or expectancy that may or may not materialize. If he is permitted to transfer the same, it may create confusion and conflict claims later on. Therefore, in attempt for achieving this object, the law does not permit him to do so.

B] Essentials of the Rule: The essentials of aforesaid said rule are enumerated in
the language of the section 6(a). This section is read as follows:
Section 6 What may be transferred. Property of any kind may be transferred, except as otherwise provided by this Act or by any other law for the time being in force, (a) The chance of an heir-apparent succeeding to an estate, the chance of a relation obtaining a legacy on the death of a kinsman, or any other mere possibility of a like nature cannot be transferred. 1. The chance of an heir apparent (a) Heir Apparent: The term heir apparent is an English term and is based on the maxim nemo est heres viventis which means that a living person does not have any heir. An heir is a person who succeeds to the property of another on his death if such person wills the property to him, or dies intestate. Therefore, who the heir will be can be determined only at the time of the death of a person, and not beforehand. (b) Chance: In case a person hopes to succeed to the property of an intestate, what and how much, if at all, the property available for inheritance can again be ascertained at the time when the owner dies. So there are two chances namely; (i) There may be possibility that no property is left at the time of death of a person, as it may have been disposed of by him during his lifetime or might have been made the subject of a testamentary disposition. (ii) It may also be possible that the heir apparent may die before the very person whose property he was hoping to succeed to.

5 Thus, there is a hope, expectancy or a chance that he may succeed to the property, but no certainty, no definite concrete reality that such an eventuality must happen. (c) Transfer of Spes Successionis is void ab initio: The chance of an heir apparent to succeed to the property of an intestate therefore cannot be transferred. This chance is also referred to as spes successionis. If a person transfers this chance, the status of this transfer in law is void ab initio. It does not convey any right in favour of the transferee, even if the transferor who transfers a chance may, in fact, become the owner of the same property in future. In Official Assignee, Madras v Sampath Naidu1, a mortgage executed by an heir apparent was held as void by the court even though he subsequently acquired the property as an heir. 2. The Chance of a Relation Obtaining a Legacy on the Death of a Kinsman The chance of a relation obtaining the legacy on the death of a kinsman cannot be transferred. A reversioner is a person who hopes to get the property on the death of another relation. He does not have the vested interest in the property, but has only a contingent interest in it. If he dies before the relation on whose death he was hoping to succeed to the property, his heirs do not get the property and it reverts back to the original owner. In Ananda Mohan Roy v Gaur Mohun Mullick 2, the issue before the Privy Council was, whether a contract by the nearest reversioner to sell the property which was in the possession of a widow as an heir, was valid and enforceable, and it was held that the prohibition under section 6(a) would become futile, if agreements to transfer property, where acquisition of title was based on possibilities, could be enforced. Hence, the Privy Council held that such contract was void and unenforceable in court of law. 3. Future Possibilities of a Like Nature Any other possibility of a like nature cannot be transferred. The term of a like nature indicates that those possibilities that are similar to the one explained above cannot be transferred i.e. those based on hope or expectancy. For instance, a person cannot transfer the prize money that he may win in a lottery or the monetary consideration that he hopes to get after the completion of a sale, as there is possibility that the sale may never materialize or he never wins a lottery. Similarly, a fisher man going out to sea to catch fish cannot transfer the possible catch that he may make, as it may be possible that he may not be able to catch any fish. Thus the mortgage of income derivable in future from scavenging work is invalid.3

1 2

AIR 1933 Mad 795. AIR 1923 PC 189. 3 Palapati v Nallagadda AIR 1938 Mad 881.

3. Doctrine of Estoppel under Section 43

A.] Scope and Object
The rule incorporated in this section governs transfers where the transferor has no capacity to transfer the property, yet has enters into the transaction with a misrepresentation with respect to his title to the property. He marks the other party act on this representation, and then acquires a good title to the same property in future. In such cases if the contract is subsisting and the property is available, then it gives the transferee the option to either go ahead with the transfer, or to rescind the same. If the transferee still wants the transferor to perform his part of the contract, he can exercise his option to validate this transfer that was imperfect to begin with and the transfer shall become valid on the exercise of such option by the transferee. Here, the willingness of the transferor to go ahead with transfer is immaterial and it is solely on the wishes of the transferee, which he has to show by exercising the option that the transfer shall become valid. It can also be explained in the following words i.e. where a person having a limited interest in the property transfers a larger interest to the transferee on a representation, and subsequently acquires the larger interest, the larger interest passes to the transferee at the option of the latter.

B.] Essentials of the Rule

The essentials of aforesaid said rule are enumerated in the language of the section 43. This section is read as follows:
Section 43 - 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 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 subsists. Nothing in this section shall impair the right of transferees in good faith for consideration without notice of the existence of the said option. Thus the essential ingredients of section 43 are as follows: (i) The transferor makes a representation to the effect that he is competent to transfer a particular piece of immovable property; (ii) This representation may be erroneous or fraudulent; (iii) This representation is not true;

7 (iv)The transferee believes or is made to believe that the representation is correct and the transferor is competent to transfer the property i.e. he does not know the defect in title or lack of capacity on part of the transferor; (v) The transferor professes to transfer the property for a consideration; (vi)The transferee acts on the representation and enters into the contract; (vii) The transferor subsequently acquires competency to transfer the same property; (viii) The contract is subsisting; (ix)The property is still with the transferor i.e. he has not transferred it to a bonafide purchaser who takes it without actual notice or constructive notice of this earlier contract between the transferor and the transferee; (x) The transferee exercises the option to signify, his intention to go ahead with the contract. The transfer shall become valid and enforceable in a court of law.

4. Distinction between Section 6 (a) and Section 43

The primary difference between section 6(a) and section 43 are as follows: (i) Section 6(a) enacts a rule of substantive law, while section 43 incorporates a rule of estoppel. (ii) Under section 6(a), the fact that it is a transfer of spes successionis is within the knowledge of both the transferor as well as the transferee. There is no misrepresentation from side of the transferor about his competency to pass a good title in present to the transferee. However, under section 43, due to an express representation, fraudulent or even erroneous, the transferee at the behest of the transferor, is assured of a good title. Section 43 is very clear of the fact that its application will cover only those cases, where due to the making of a representation by the transferor, that he is competent to transfer a piece of property, the transferee has been expressly misled. The transferee had no knowledge about the defect or lack of title on part of the transferor, and due to the express representation coming from the transferor; he is made to believe in the competency of the transferor the property. (iii) Section 43 applies only in those cases, where the transfer is for consideration. It does not apply to gratuitous transfers. It applies only in those cases where despite a misrepresentation, the transferor, either takes or seeks to take a monetary benefit from the transferee. It therefore would not apply to cases where a person transfers the

8 property by way of gift. On the other hand, the prohibition under section 6(a) applies to all kinds of transfers, irrespective of whether they are for consideration or gratuitous transfers. Thus a gift of property that a person hopes to inherit is also void. (iv)The doctrine of spes successionis applies both to movable and immovable properties, while the rule of estoppel under section 43 applies only in case transfer of immovable property. (v) The status of transfer under section 6(a) is void in its inception i.e. void ab initio. However, under section 43, the transfer is voidable at the option of the transferee provided two conditions are satisfied. First that the contract should be subsisting at the time the transferor attains competency to transfer the property i.e. it should not have been rescinded or brought to an end and secondly the property should be available with the transferor. It should not be in the hands of a bonafide transferee for value.

5. Case Study
A.] Jumma Masjid Mercara v Kodimaniandra Deviah AIR 1962 SC 847
1. Facts of the case: A Hindu joint family consisted of three brothers Br1, Br2 and Br3. In the year 1900, they collectively executed a usufructory mortgage of the joint family property in favour of X. There was litigation, and a compromise was arrived at with respect to it, according to the terms of which for a period of 20 years i.e. till August 1920, the mortgagee was entitled to retain its possession, and after that the property was to revert back to the family. Out of the three brothers one dies unmarried, and the other two died one after another, leaving behind their widows W2 and W3, but no children. They had a sister, who had three grandsons A, B and C, who were the reversioners to their property. A was to get one half of the property and B and C one fourth each, but on the death of the two widows. Till the death of the widows, the interest that they had in the property was a mere spes successionis, which according to section 6(a) is untransferable. However, they represented to the transferee that this property belonged to the joint family and after the death of W2, it devolved on them as reversioner, and hence they were competent to transfer the same. They did not disclose the fact that W3 was still alive, and her very presence prevented them from getting a title to the property. The transferee on such representation of the reversioners gave consideration, and filed a suit for possession of property, when the same was not delivered to them. W3 resisted the suit on the ground that till she was alive, no one else had a right to posses the property, as these were her husbands self-acquisitions and she, as his legal heir was the owner of the same. The Subordinate courts, the distinct court and even the judicial commissioner accepted her arguments. But, before the second appeal at the level of the judicial commissioner could be finally disposed of, W3 died and the transferee applied before the revenue authorities for transferring the patta for the property standing in the name of W3 to his name on the strength of the sale deed executed by the reversioners. At this time, Jumma Masjid intervened and contended that first, the whole of

9 the properties vested in them on the strength of a gift deed executed by W3 in their favour, and secondly, they alleged that one of the reversioners, A, had relinquished his share in the property in their favour foe a consideration of Rs 300. The revenue authorities however rejected the claim of Jumma Masjid, and the possession of the transferee was upheld. Jumma Masjid filed a case for recovery of possession that went ultimately to the Supreme Court. 2. Question of law: The decision that came in favour of the transferee was pronounced 42 years after the sale was executed in his favour by the reversioners. The primary issue before the court was whether a transfer of property for consideration made by a person who represents that he has a present and transferable interest therein, while he possesses in fact only a spes successionis, within the protection of section 43 of the Act. The contention of Jumma Masjid was that section 43 must be read as subject to the provisions of section 6(a), that specifically prohibits the transfer of spes successionis and therefore section 43 should apply only in cases other than those covered under section 6(a). 3. Decision of Court: The court rejected this argument, and drew a distinction between section 6(a) and Section 43, pointing out that they do relate to different spheres, and that there is no conflict between them. Section 43 clearly applies whenever a person transfers property to which he has no title on the representation that he has a present and transferable interest therein, and acting on that representation, the transferee takes a transfer for consideration. When these conditions are satisfied the section enacts that if the transferor subsequently acquires the property, the transferee becomes entitled to it, if the transfer has not meantime been thrown up or cancelled and is subsisting. There is an exception in favour of transferees for consideration in good faith and without notice of the rights under the prior transfer. However, apart from this, the section is absolute and unqualified in its operation. It applies to all transfer which fulfill the conditions prescribed therein, and it makes no difference in its application whether the defect of title in the transfer arises by reason of his having no interest whatsoever in the property or of his interest therein being that of an expectant heir. Pointing out that there is no controversy in this issue, the court said: Section 6(a) and Section 43 relate to two different subjects, and there is no necessary conflict between them. Section 6(a) deals with certain kinds of interests in property mentioned therein and prohibit a transfer simpliciter of those interests. Section 43 deals with representations as to title made by a transferor who had no title at the time of transfer and provides that the transfer shall fasten itself on which the transferor subsequently acquires. Section 6(a) enacts a rule of substantive law, while section 43 enacts a rule of estoppel, which is one of evidence. The two provisions operate on different fields and under different conditions and there is no ground for reading a conflict between them, or cutting down the ambit of the one by the reference to other. The court said that in its opinion, both of them can be given full effect on their own terms in their respective spheres. But to hold that transfers by persons who have only a spes successionis at the date of the transfer are not within the protection afforded by section 43, would destroy its utility to a large extent. As section 43 enacts a rule of estoppel, it virtually enacts a special provision for the protection of transferees for consideration from persons

10 who represent that they have a present title, which in fact they have not. Thus while it is true that rules of estoppel cannot be resorted to for defeating or circumventing prohibitions enacted by statutes on grounds of public policy, but here, it is not a ground of public policy alone by means of a specific provision in specific enactment. The court therefore held that the transferee here entered into transaction acting on the representation made by the reversioners that they were entitled to the property in present. He therefore acquired title to the properties under section 43 of the Act, when the reversioners became in titulo on the death of W3, and the subsequent dealing by way of release did not operate to vest any title in Jumma Masjid.

B.] Jharu Ram Roy v Kamjit Roy and Ors. [Decided On: 13.01.2009]
1. Facts of the case: One Nakho Ram was the owner of the suit property. He had two sons, namely, Rejiv Lochan Roy and Kamjit Roy, The property in the suit admeasured 16 Bighas 4 Kathas. Rajiv Lochan executed two deeds of sale in 1982, in respect of about 4 Bighas of land, inter alia, contending that he had half share in the said property. It is not in dispute that the family of Nakho Ram was governed by Dayabhaga School of Hindu Law. It is furthermore not in dispute that in 1982, Nakho Ram was alive and he expired only in the year 1990. Appellant, however, claimed that in terms of the aforementioned deeds of sale executed by Rajiv Lochan in the year 1982, he had remained in possession of the vested property since the date of purchase. It is, furthermore, not in dispute that in the year 1990, a proceeding under Section 107 as also Section 145 of the Code of Criminal Procedure was initiated and therein, Respondent No. l herein was put in possession of the property. Respondent No. 1 filed a suit in the year 1991 for declaration of his title, confirmation of possession as also a decree for setting aside two deeds of sale executed by Rajiv lochan in the year 1982. The said suit was dismissed by the learned Trial Judge, inter alia holding that the legal representatives of the proforma respondents having not been brought on record, the suit had abated. It was furthermore held that the defendant-appellant acquired title to the suit property by adverse possession. The suit so far as it related to setting aside the aforementioned deeds of sale was, however, held to be barred by limitation. The First Appellate Court, however, on an appeal preferred by the contesting respondents, reversed the said findings of the Trial Court opining that as the defendant-appellant was a party to the fraud perpetrated by Rajiv Lochan in so far as he was, at all Material times, aware that in the year 1990, Nakho Ram was alive and not dead, he cannot take benefit of the said deeds of sale and the same were void ab initio. The High Court, as noticed hereinbefore, has affirmed the said view. 2. Decision of Court: Learned Counsel appearing on behalf of the appellant would contend that the High Court committed a serious error in passing the impugned judgment in so far as it failed to take into consideration the provisions of Section 43 of the Transfer of Property Act, in terms where of, having regard to the fact that Rajiv Lochan had also died in the year 1992, the doctrine of feeding the estoppel became applicable to the facts of the present case. A finding of fact has been arrived at by the First Appellate Court that the appellant was also a party to the fraud inasmuch as he was all along aware that on the date of execution of the

11 deeds of sale, Nakho Ram was alive. Indisputably, therefore, the appellant entered into the aforementioned transaction knowing fully well that Nakho Ram was alive in the year 1992, Rajiv Lochan could not have executed the deeds of sale and only with a view to obviate the legal difficulties, Nakho Ram was shown to have expired. Appellant was furthermore aware that although Rajiv lochan did not inherit the property of Nakho Ram, he executed the aforementioned deeds of sale. Rajiv Lochan, thus, having no title to the property, by said deeds of sale or otherwise, evidently could not have derived any title there over. In this case, as the appellant averred that although in the deeds of sale, a stipulation was made by Rajiv Lochan that his father had expired, it cannot be said to foe a case where he fraudulently or erroneously represented that he was authorized, to transfer the said immovable property. As noticed hereinbefore, a finding of fact had been arrived at by the First Appellate Court that the appellant was a party to the frand and that he was not victim thereof. Our attention, however, has been drawn to a decision of this Court in 2007 (2) SCC 404. In the said decision this Court laid down the law in the following terms: In order to get the benefit of the said provision, the conditions which must be satisfied are: the contract of transfer was made by a person who was competent to contract; and the contract would be subsisting at the time when a claim for recovery of the property is made. However, the provisions would have no application if the transfer was invalid as being forbidden by law or contrary to public policy, as envisaged under Section 23 of the Contract Act. Thus, no estoppel can be pleaded contrary to the provisions of a statute. The 'rule of feeding the estoppel' shall apply in absence thereof. The doctrine of feeding the estoppel envisages that 'where a grantor has purported to grant an interest in land which he did not at the time possess, but subsequently acquires, the benefit of his subsequent acquisition, goes automatically to the earlier grantee, or as it is usually expressed, feeds the estoppel. The principle is based on an equitable doctrine that a person who promised to perform more than he can perform Must make good his contract when he acquires the power of performance. The difference between the ambit of Section 41 and 43 of the Act is apparent. Whereas Section 41 provides that a transfer by an ostensible owner cannot be avoided on the ground that the transfers should take reasonable care to ascertain that the transferor had power to make the transfer and to act in good faith before a benefit thereof if claimed by him. Section 43, on the other hand, enables the transferee to whom a transferor has made a fraudulent or erroneous representation to lay hold, at his option, of any interest which the transferor may subsequently acquire in the property, unless the right of any subsequent purchaser for value without notice is in effect. Fraud vitiates all solemn acts. As the appellant was aware of the fact that Nakho Ram had not expired in 1992, in our opinion, the provisions of Section 43 of the Transfer of Property Act cannot be said to have any application in the instant case.

Bibliography

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1. Poonam Pradhan Saxena, Property Law, 1st Edition 2006, First Reprint, 2008. 2. Course Material of Property Law as compiled by Mr. Atul Sinha and Mr. Shashank Shekhar.