Rule of Feeding the Grant by Estoppel

The Rule of Estoppel signifies that when a person makes a promise to another
person, which is more than what he can perform or which he is incapable of
performing, then he cannot later on claim incompetency as a legitimate excuse
when he acquires the competency to fulfil his promise.
In simple words, he, later on, cannot claim incompetency to avoid his liabilities.
Such a person would be compelled to fulfil the promise when he acquires the
competency to perform it. This competency feeds the estoppel. Estoppel
signifies a stop, now you have to stick to what you said.
Example: A represents to B that he is authorised to transfer the property X
whereas in reality he is not and professes to transfer the same. Acting on that
representation B provides consideration for the same. Now the transfer is
inoperative as A had no authority to transfer the property. But later on, A
acquires the property under the will of his Uncle, who was the owner of the
property.
Now A can be compelled to complete the transfer. He cannot plead the
transfer to be inoperative on the grounds that he had no authority at the time
of transfer.
The Rule of Estoppel has been adopted in Indian Legislations from the
Common Law. The Rule of Estoppel has been embodied in Section 43 of
Transfer of Property Act, 1882. It explains what happens when a transfer is
done by an unauthorised person but he, later on, acquires interest in the
property transferred.

Essentials of Section 43
1.The transferor makes a false representation that he’s authorised to transfer a
certain immovable property
2.This representation may be erroneous or fraudulent
3.The transferor professes to transfer the property;
4.For consideration;
5.The transferee enters into a contract, acting on that representation;
6.The transferor, later on, acquires some interest in the property while the
contract is subsisting.
7.The transfer would operate on any such interest acquired, at the option of
the transferee.
8.Provided that, there is no subsequent bona fide transferee, who has entered
into the transfer without having any notice of the earlier contract between the
transferor and the prior transferee.
Representation: May be Fraudulent or Erroneous
In order for the Rule of Estoppel to apply, there must be some kind of
representation. It is not needed for a representation to be fraudulent or
intentional. There might be 2 cases:
A fraudulently makes B to believe that he has the right to transfer the property
and B acts on that representation. And later on, A acquires the same right.
A believes that he has the authority to transfer the property and makes B to
believe the same. B acts on that belief. In reality, A doesn’t have the authority
but he, later on, acquires it.
In both the cases mentioned above, the Rule of Estoppel would apply. The
section was amended in 1929 which added the word fraudulently, earlier it
was just erroneously.
Hence, the purpose of this section is, it doesn’t matter whether the transferor
has acted fraudulently or innocently. What is material is he made the
representation and the transferee acted on it.
The representation can be expressed or implied. It is presumed that when a
person says that ‘he will transfer the property’, he is conveying that he has the
authority to transfer that particular property. It would amount to a
representation and the Rule of Estoppel will be attracted when he gains the
competency to transfer.
Viraya v. Hanumanta
A, B and C were coparceners and held the family property jointly. A sold the
property to alienee without the consent of other coparceners. A failed to
deliver the property to the alienee as the joint family property cannot be
transferred without the consent of all the coparceners. Alienee filed a suit
against A for the enforcement of the contract.
During the pendency of the suit, C died. A’s share in the joint property
increased to one half. It was held that alienee was entitled to the share
(including the increased share) of A in the property.
The transferee enters into a contract, acting on the representation made by
the transferor:
Acting on the representation made by the transferor depicts the lack of
knowledge on the part of the transferee. Hence, for there to be a
representation, it is material that the transferee should be unaware or should
not have the notice of the lack of competency on the part of the transferor to
enter into the transaction.
In a case where the transferee knows about the defect in the title of the
transferor at the time of the transfer, Section 43 or the Rule of Estoppel would
not apply.
Absence of knowledge on the part of the transferee about the defect in the
title of the transferor also means that the transferee took reasonable care to
protect his interest and then believed the title of the transferor should be
good. Hence, it is a duty on the part of the transferee to inquire before
entering into the transaction as to the title of the transferor and protect his
own interest.
The test of reasonable care is the amount of care that an ordinarily prudent
man would take.
This shows that the knowledge on the part of the transferee could be actual or
constructive. Actual knowledge means when the transferee knew the title of
the transferor to be bad and constructive knowledge means when the
transferee could’ve detected the lack of title but did not because of his own
negligence. Even if the constructive knowledge on the part of the transferee is
present at the time of the transfer, then the Rule of Estoppel won’t apply.
Kartar Singh v. Harbans Kaur
Lands which are the subject matter of the case belonged to the minor son and
his mother executed the sale deed of those lands. The son on attaining
majority filed a suit contending that the sale was not binding on him and hence
is void. The court declared the deed to be void and directed the restoration of
the possession of the properties to the son. Before the restoration of
possession could take place, the son died. Mother succeeded to those lands as
an heir. The transferee claimed the benefit under Section 43.
The court in the present case examined whether the transferee had the
knowledge about the incompetency of the mother to execute the sale deed. It
was observed that the sale deed mentioned that the land had been acquired
by her and her minor son and she was acting as her guardian.
The transferee could’ve inquired that whether mother was competent to
alienate the property of her minor son as a guardian as, In law, unless a
guardian has been authorized by the court, he cannot alienate the property of
the minor.
Held: The transferee had the knowledge of the fact that the mother was
incompetent to effect a valid transfer and Section 43 of TPA would have no
application.
Transfer:
1.The property in question must be immovable property.
2.The transfer must be for consideration. It doesn’t mean that the transferee
has paid some monetary consideration to the transferor but that the
consideration should be the essence of the transfer. Hence, Section 43 would
not be attracted by gratuitous transfers like a gift, etc.
3.The section applies to Sale, mortgage, lease, charge and exchange.

The doctrine doesn’t apply to:

1.Sale made through the court
2.Where the transfer was forbidden by law, or
3.The transfer that is contrary to public policy.

Transfer by minor or lunatic is not qualified to attract the application of this

section.
The transferor, later on, acquires some interest in the property while the
contract is subsisting.
The Rule of Estoppel or Section 43 would be applicable only when the
transferor subsequently acquires any interest in the property.

The section would apply only when the transferor acquires the interest in the
property and not his successors or heirs. The application of the section is
personal in character and won’t apply against the person who acquires the
property in his own right.

Example: A made B believe that he had the authority to transfer the property,
which actually belonged to his brother. A died during the lifetime of his
brother. When the brother died, the property went to heirs of A, who were
also the heirs of the brother. B cannot go against A’s heirs under Section 43.

The interest must be acquired by the transferor while the contract is still
subsisting. It means that the contract shouldn’t have come to an end before
acquiring the interest.

Example: A makes B believe that he has the authority to transfer the property,
which actually belongs to his brother. They enter into a contract of sale for the
same. B, later on, gets to know that A has no authority to make the transfer. B
asks for the consideration that had been paid, back. A pays the money back. A
few days later, A’s brother dies and A inherits the same property. But now B
cannot exercise his option to validate the sale as the contract had already
come to an end.

The transfer would operate on any such interest acquired, at the option of
the transferee.
This means the transfer made is voidable at the option of the transferee. The
transferee has the option to make the transfer valid.

The condition is different under Common Law. Under common law, if the
contract is subsisting at the time when the transferee acquires the interest in
the property, the transfer is validated automatically. There is no need for any
action on the part of either transferor or transferee.
Proviso:
This explains a situation where even when all the essentials of Section 43
have been fulfilled, the Rule of Estoppel won’t apply.
If the property has been transferred by the transferor to another person,
before the transferee could exercise the option to validate the transfer, the
transferor loses the remedy of validation. But this will apply only in the case
where
1.The subsequent transferee is bona fide transferee i.e. she must not have
knowledge about the first transfer/contract. Knowledge can be actual or
constructive.
2.The second transfer must be for a consideration.
Example: A represents to B that he is authorised to transfer the property X
whereas in reality he is not and professes to transfer the same. Acting on that
representation B provides consideration for the same. A, later on, acquires the
property under the will of his Uncle, who was the owner of the property. Now
the transfer becomes operative at the option of B i.e. B can either ask for the
transferor to complete the transferor can ask for his money back. Before B
could exercise his option, A sells the property to C. C had no knowledge about
the contract between A and B.
Sale to C is valid and B has lost the option to validate his own transfer.

Comparison between the Rule of Feeding the Grant by Estoppel and Spec
Successions:
Section 6 (a) of TPA provides that the chance of an heir apparent to succeed to
the property of an intestate cannot be transferred. If the same is transferred,
the transfer is void.

On the other hand Section, 43 makes the transfer valid at the option of the
transferee if a person acquires the right in the property as an heir and the rest
of the essentials are also fulfilled.
Jumma Majid Mercara V. Kodimaniandra Deviah
In this case, the Supreme Court drew a distinction between Section 43 and
Section 6 (a) of TPA. It held that there is no reason for conflict between them
and they both relate to different spheres. Section 6 (a) enacts a rule of
substantive law whereas Section 43 enacts rule of Estoppel, which is one of
evidence. The two sections operate on different fields and under different
conditions.
The main difference between the two lies in the fact that the transfer that falls
under section 6 (a) is within the knowledge of the transferee as well and there
is no misrepresentation. Whereas, under Section 43, the absence of knowledge
on the part of the transferee is one of the main conditions.

In case of a chance of an heir apparent being transferred, even the

constructive notice on the part of the transferee would bring the case under
Section 6 (a).