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Section 41 is an exception to general principle “no man can transfer to another a right/ title
greater than what he himself possesses and he gives not who hath not.” Section 41 of TPA is
now subject to provisions of Benami Transaction (Prohibition of the Right to Recover
Property) Act, 1988.
If all these ingredients are present (real owner can’t claim his property back)
Eg- ‘A’ purchased the property in the name of his wife. The wife looks after the property.
After sometime she mortgaged the property to ‘Z’. It was held that silence of ‘A’ on
mortgaged by his wife as an ostensible owner. The interest of ‘Z’ is protected and ‘A’ can’t
claim his property back as ‘A’ himself allowed her to deal with property and there was
implied consent of him. (Annodo Mohan v.Nilpharmri)
Consent is express when it is given in clear word by real owner to ostensible owner to
deal with property.
Consent is implied if real owner knows that ostensible owner (benamidar) is dealing
with property like its own. The real owner’s silence amounts to implied consent.
Eg- ‘A’ purchase the property in the name of ‘B’ and give his consent to deal with property.
‘B’ sold the property to ‘C’ with consideration and ‘C’ has taken the reasonable care that ‘B’
has title to transfer the property. Section 41 of TPA and Section 115 of Evidence Act both
will operate and estop ‘A’ from claiming his property back, that he is a real owner and ‘B’
ostensible owner.
REASOBABLE CARE and GOOD FAITH- Section 41 lays down that transfer by an
ostensible transfer shall not be voidable on grounds that transferor has no right to transfer, if
transferee
If transferee has taken the reasonable care to ascertain that transferor has right to
transfer, and
Acted in good faith
GOOD FAITH- “He who seeks equity must do equity” where transferee has the
knowledge that transferor is merely an ostensible owner and not the real owner, his
intention is malafide and therefore he can’t take the protection of section 41. There was
partition of joint family property and on the same property there was dispute which was
pending in the court. During the pendency of proceedings, a part of property was sold.
The Supreme Court held that since parties are living in same village and facts are
established beyond the reasonable doubt that purchaser had knowledge of disputed title.
Therefore transferee had no good faith and can’t claim the benefits of section 41of TPA
(Gurubaksh Singh v.Nikka Singh)
REASONABLE CARE- Good faith is not only enough transferee must exercise
reasonable care in ascertaining the title of transferor. Reasonable care means care which
man of ordinary prudence would have taken. Revenue records are not documents of title
and transferee relaying solely on entries would not mean he he taken the reasonable care.
Eg- ‘S’ owned the house. In 1912 ‘S’ went to pilgrimage leaving the house in charge of
‘B’. In 1915 ‘B’ applied to municipality that he was not aware of ‘S’ whereabouts and
whether he was dead or alive, and prayed that house be entered in his name being his heir.
The application wsa accepted and after two years he sold the house to ‘Z’ who purchases
the house in good faith after inspecting the register. ‘S’ returned in 1918 and claimed his
house. It was held that protection of section 41 to defendant ‘Z” not maintainable.
Because if ‘Z’ had make the proper inspection, he would come to know that ‘S’ was the
original owner and ‘B’ had admitted that he didn’t know whether ‘S’ was alive or dead.
And further presumption of death could not be made before 7 years.( Md. Sulamian v.
Sakina Bibi)
MITHILESH KUMARI v PREM BEHARI- SC held that statute is declaratory and makes
the all benami transaction punishable. Statute has retrospective effect. However in R.
RAJAGOPAL REDDY v. P. CHANDRASHEKHRN- SC held that statute has no
retrospective effect and it is not a declaratory.
2. No defence based on any right in respect of any property held benami, whether
against the person in whose name the property is held or against any other person,
shall be allowed in any suit, claim or action by or on behalf of a person claiming to be
the real owner of such property.
3. Exception
where the person in whose name the property is held is a coparcener in a Hindu
undivided family and the property is held for the benefit of the coparceners in the
family; or
where the person in whose name the property is held is a trustee or other person
standing in a fiduciary capacity, and the property is held for the benefit of another
person for whom he is a trustee or towards whom he stands in such capacity.