Transfer by ostensible owner

2022 SCMR 877 SUPREME-COURT Judicial Precedent

S. 41Transfer by ostensible ownerProtection for transferee under section 41 of the Transfer of Property Act, 1882Scope and pre-requisites

Section 41 of the Transfer of Property Act, 1882 underpins the principle of equity that whenever one of the two innocent persons has to suffer by the act of third person, he who has enabled that person to occasion the loss, must sustain it, or where one of the two innocent persons suffer from the fraud of third party, the loss should fall on him who has created, or could have prevented the opportunity for fraud

However in order to invoke the protection of the provisions of section 41, a transferee is essentially required to demonstrate that; first, the transferor is the ostensible owner; second, he was so by consent, express or implied, of the real owner; third, the transfer is for consideration; and fourth, the transferee has acted in good faith, taking reasonable care to ascertain that the transferor had power to transfer.

2022 PLD 699 SUPREME-COURT Judicial Precedent

S. 41Transfer by ostensible ownerProtection under S.41 of Transfer of Property Act, 1882Pre-requisites

Such protection can only be claimed when the following conditions are fulfilled: first, the transferor is the ostensible owner; second, he is so by the consent, express or implied, of the real owner; third, the transfer is for consideration; and fourth, the transferee has acted in good faith, taking reasonable care to ascertain that the transferor had power to transfer.

2022 SCMR 2130 SUPREME-COURT Judicial Precedent

S. 41Transfer by ostensible ownerBona fide purchaser of property without noticeRequirement of purchaser acting in good faith and taking reasonable care before entering into the transactionScopePurchaser was required to do due diligence when purchasing properties

In the present case the purchasers exercised due diligence by approaching the revenue records for ascertaining title of the properties, which showed that the sons were the owners of the properties and had become owners by virtue of unchallenged wills

section 41 of the Transfer of Property Act, 1882 applied in the present case and the purchasers were entitled to such equitable protection available to them

Order accordingly.

2022 CLC 178 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

Ss. 8 & 10Transfer of Property Act (IV of 1882), S. 41Declaration of property as evacuee trust propertyValidation of certain transfersTransfer by ostensible ownerScopeSettlement Department allotted a certain piece of land to the allottee who alienated part of it to four others

Assistant Administrator, Evacuee Trust Property, filed a reference under Ss. 8 & 10 of the Evacuee Trust Properties (Management and Disposal) Act, 1975, for declaring the land in question as trust property as well as sought cancellation of allotment in favour of the allottee

Chairman, Evacuee Trust Property Board, passed impugned order declaring the land in question as trust property and also cancelled the allotment of the allottee as well as subsequent sale transactions

Revision petition under S.17 of the Evacuee Trust Properties (Management and Disposal) Act, 1975, was also dismissed

Validity

Subsequent purchasers claimed to be bona fide purchasers of the land in question and sought protection of law

Subsequent purchaser admittedly had derived right from the alleged allottee and had stepped into the shoes of their vendor and were debarred to claim any independent better title than that of their vendor rather they had to soar and sink in same vessel with their vendor and any lacuna or flaw in the title of the vendor emerging after the transaction shall always travel with the property and the subsequent vendee had to suffer for non-holding diligent and stringent microscopic probe into the title of the vendor and had no right or claim against the respondent department, rather could trace their legal remedy against their vendors as such they had no protection under S.41 of the Transfer of Property Act, 1882

Constitutional petition was dismissed, in circumstances.

2021 SCMR 686 SUPREME-COURT Judicial Precedent

S. 41Transfer by ostensible ownerScope

Where the transferor was the ostensible owner, the transfer was made by consent express or implied of the real owner, the transfer was for consideration, the transferee acted in good faith and took reasonable care to ascertain that the transferor had power to transfer, he would be entitled to statutory protection under S. 41 of the Transfer of Property Act, 1882

Bona fide purchasers could not be penalized for any fraud or misrepresentation by their predecessors-in-title unless they were pari delicto with their vendors.

2021 CLC 106 QUETTA-HIGH-COURT-BALOCHISTAN Judicial Precedent

S.41Transfer by ostensible ownerScopeInheritanceGiftIngredientsProofMutationCo-sharerBona fide purchaser

Contention of plaintiff was that she was owner of suit property and impugned mutations were illegal whereas defendants contended that suit property had been transferred in their favour through gift

Suit was decreed concurrently

Validity

Limitation did not run against a void transaction nor efflux of time could extinguish right of inheritance

Mutation was not a proof of title and beneficiary was bound to prove original transaction

Once it was established that plaintiff was entitled for inheritance then she would become co-sharer in each and every inch of the property of deceased predecessor

Plaintiff was entitled to inherit the left-over of her deceased father as she had become co-sharer in the property on death of her father to the extent of her share

Co-sharers could not alienate the property more than their shares

Each co-sharer would be deemed to be owner in joint property and anyone of them could not act against rights and liabilities of other co-sharers

Donee excluding any heir from inheritance was required to establish the original transaction of gift

Nothing was on record with regard to declaration of gift or its acceptance

Mere transfer of possession to the donee was not sufficient to constitute a valid gift

Gift deed must justify the disinheritance of an heir which in the present case was lacking

Transfer of property should be for consideration and transferee must have acted in good faith taking reasonable care to ascertain that transferor had the power to transfer the property

Subsequent purchaser of suit property had not taken care of important aspect of the matter

Right of transferee should be protected from the share of defendants and not from the share of plaintiff

Principle of bona fide purchaser was based on equity which could not be invoked in such a manner that might cause injustice to the others

Vendees of suit property should claim their right, if any, from their transferors-defendants

Plaintiff being residuary of deceased should inherit from his property under Law of Sharia

Impugned judgments and decrees were based on correct appreciation of record

Revision was dismissed, in circumstances.

2020 CLC 1746 KARACHI-HIGH-COURT-SINDH Judicial Precedent

Ss. 27(b),42 & 54Transfer of Property Act (IV of 1882), S.41Qanun-e-Shahadat (10 of 1984), Art. 92Suit for declaration and injunctionTransfer by ostensible ownerBona fide purchaser for valuable consideration without notice

Plaintiff claimed to be owner of suit property and alleged that transfer of the same in favour of defendants was result of fraud

Validity

Defendants produced conveyance deeds in support of their pleas that they had purchased respective subdivided plots through a valid registered instrument

One of the defendants also produced lease in favour of other defendant issued by Defence Housing Authority

Both defendants could not be contradicted by plaintiff who could not challenge documents exhibited by defendants which were Transfer order; approved building plan; completion certificate; and subsequent transfer order, all documents issued by public offices

Such documents were public documents and their authenticity was not challenged, therefore, genuineness as contained in Art. 92 of Qanun-e-Shahadat, 1984, and the same was attracted to documents so exhibited

Both defendants were bona fide purchasers for value without notice was relevant

Such principle was developed by Courts while expounding S. 41 of Transfer of Property Act, 1882 & 27(b) of Specific Relief Act, 1877

Suit was dismissed in circumstances.

2017 SCMR 81 SUPREME-COURT Judicial Precedent

S. 41Transfer by ostensible ownerBona fide purchaser¬ScopeJoint owners/co-owners of inherited propertyError in revenue record

Due to an error in revenue record which excluded the name of first joint owner of the property and the property was shown to he only in the name of the second joint owner, would not by itself deprive and denude the first joint owner from the title of the property

Sale of property made by the second joint owner, in such circumstances, to an alleged bona fide purchaser claiming protection under S. 41 of the Transfer of Property Act, 1882, could not be construed to be made with the express or implied consent of the first joint owner

Unauthorized sale to the extent of first joint owner's share in the suit property would be void and the purchaser would not qualify the bona fide purchaser test under S. 41 of Transfer of Property Act, 1882 and, therefore, he could not take up the plea of bona fide purchaser to protect the sale in his favour.

2017 SCMR 81 SUPREME-COURT Judicial Precedent

S. 41Transfer by ostensible ownerBona fide purchaser, principle ofEssential pre-requisites

Principle of bona fide purchaser as enunciated by S. 41 of the Transfer of Property Act, 1882 was founded upon the principles of equity

Essential ingredients of the said principle were that the transferor was the ostensible owner; that the transfer was made by express or implied consent of the real owner; that the transfer was made for consideration; and that the transferee while acting in good faith had taken reasonable care before entering into such transaction

Said four essential ingredients must co-exist in order for a person to take the benefit of the equitable principle of bona fide purchaser.

2017 SCMR 81 SUPREME-COURT Judicial Precedent

S. 41Transfer by ostensible ownerBona fide purchaserScopeError in revenue record

On account of some unintentional or deliberate error committed by the revenue staff in the revenue record which excluded the name of the lawful owner of the property therefrom and the property was shown to be in the name of some other person who was not the owner of the whole or a part thereof, would not by itself deprive and denude the true and actual owner from the title of the property

Therefore, in such a' situation made by the person, who was not the owner, to an alleged bona fide purchaser claiming protection under S. 41 of the Transfer of Property Act, 1882, could not be construed to be made with the express or implied consent of the real owner.

2016 PLD 383 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

S. 41Transfer by ostensible ownerEssentialsBenami transactionMotive of Benami transactionExistence of motive for reation of Benami title is relevant

For determining that whether title vesting with opposite party in disputed property was merely benami, absence of motive always goes against the claimant.

2016 PLD 383 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

S. 41Transfer by ostensible ownerEssentialsBenami transactionImportance of motive of Benami transaction

Essentials for proof of Benami transaction were that what was the source of consideration for Benami transaction, that in whose custody original title documents were and who was in possession of Benami property; and that what was the motive of Benami transaction

Essential elements must exist to prove Benami transaction between ostensible owner and purchaser for purchase of property in name of ostensible owner for benefit of person who was to make payment of consideration

Existence of motive for creation of Benami title was relevant

For determining as to whether title vesting with opposite party in disputed property was merely Benami, absence of motive always goes against claimant.

2013 PLD 517 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

S. 41Transfer by ostensible ownerTitle of the ownerScope

Ostensible owner does not mean complete owner without any defect.

2013 PLD 517 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

S. 41Transfer by ostensible ownerSilence of real ownerEffect

When at the time of transfer of property by ostensible owner in favour of any person who is a person claiming title and interest in the property remains silent on that transfer that means that he has impliedly admitted that transfer.

2012 CLC 1268 QUETTA-HIGH-COURT-BALOCHISTAN Judicial Precedent

S. 41Specific Relief Act (I of 1877), S.42Transfer by ostensible ownerBenefitScopeSuit for declaration of title was decreed concurrently by the courts below

Contention of the defendants was that they were bona fide purchasers of suit property, therefore, benefit of S.41 of the Transfer of Property Act, 1882, must have been extended to them

Validity

Person claiming right and benefit under section 41 of the Transfer of Property Act 1882 was bound to establish that the person from whom the suit property had been transferred to him was an ostensible owner, while transfer so made was with the consent of the real owner, either express of implied

Said transfer must have been made for some consideration and the person being transferee or purchaser must have acted in good faith and taken all reasonable care and steps before entering into said transaction for transfer

Defendants had to establish that they had taken all reasonable care before entering into sale transaction for suit property

Contents of the sale agreements in favour of the defendants for the suit property, in the present case, were in contradiction with the written statements of the defendants

No evidence was available to the effect that the defendants were not in knowledge of the fact that the suit property belonged to the plaintiff, and had purchased the property without confirming ownership

Pleadings of the defendants were contrary to their contentions in the revision petition

Defendants, in circumstances, could not ask for benefit of S.41 of the Transfer of Property Act, 1882

Revision was dismissed.

2007 YLR 2735 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

S.42Transfer of Property Act (IV of 1882), 5.41Civil Procedure Code (V of 1908), O.XIV, R,1Declaration of titleTransfer by ostensible ownerIssues nut framed correctlyEffectSuit filed by plaintiff was decreed in his favour and appeal filed by defendants was dismissed by Appellate Court

Defendants raised the pleas that. they were bona fide purchasers for consideration under S.41 of Transfer of Property Act, 1882, and issues were net properly framed

Validity

Defendants were required to be careful in ascertaining the correct title of their vendor but they did not examine the title nor consulted the record vis-a-vis, the .general power of attorney

Defendants failed to inquire from the plaintiff, in this behalf before entering into sale

Suit land had been sold to the last owner for a consideration of Rs. 2, 20, 000 and within six months was sold to defendants , for a total sum of Rs. 8, 25,000

Such sale to 'defendants rendered proof that, they were not bona .fide purchasers for consideration and were fully ativare of the defective title of seller

Defendants could not claim better title than that possessed by their vendor

Defendants failed to point out as to what issues were required to be framed arising out of the controversy

Even if some issues ,were not correctly framed or happily worded, when evidence -had come ort record on the controversy no prejudice was caused to defendants

Defendants failed to point out any misreading or non-reading of evidence

Concurrent findings of fact by the courts below, did not call for interference

Revision was dismissed in circumstances.