Case: The Jumma Masjid, Mercara Vs. Kodimaniandra Deviah

Judges were further of the opinion that in view of the decision of the Privy Council in Annanda Mohan Roy v. Gour Mohan Mullick, 50 Ind App 239 : ILR 50 Cal 929 : (AIR1923 PC 189) and the decision in Lakshmi Narayana Jagannada Raju v. Varada Lakshmi Narasimha, ILR 39 Mad 554 : (AIR 1916 Mad 579) which was approved therein, the illustration to S. 43 must be rejected as repugnant to it. In Jagannada Rajus case, ILR 39 Mad 554 : (AIR 1916 Mad 579) the question was whether a contract entered into by certain presumptive reversioners to sell the estate which was then held by a widow as heir could be specifically enforced, after the succession had opened. It was held that as S. 6 (a) forbade transfers of spes successionis, contracts to make such transfers would be void under S. 23 of the Contract Act, and could not be enforced. This decision was approved by the Privy Council in 50 Ind App 239: ILR 50 Cal 929: (AIR 1923 PC 189 ) where also the question was whether a contract by the nearest reversioner to sell property which was in the possession of a widow as heir was valid and enforceable, and it was held that the prohibition under S. 6(a) would become futile, if agreements to transfer could be enforced. These decisions have no bearing on the question now under consideration, as to the right of a person who for consideration takes a transfer of what is represented to be an interest in praesenti. The decision in 65 Mad LJ 588 : (AIR 1933 Mad 795 ) is, in our view, erroneous, and was rightly overruled in the decision now under appeal. 17. Proceeding on to the decisions of the other High Courts, the point under discussion arose directly for decision in Shyam Narain v. Mangal Prasad, ILR 57 All 474 : (AIR 1935 All 244). The facts were similar to those in 65 Mad LJ 588 : (AIR 1933 Mad 795 ). One Ram Narayan, who was the daughters son of the last male owner sold the properties in 1910 to the respondents, while they were vested in the daughter Akashi. On her death in 1926, he succeeded to the properties as heir and sold them in 1927 to the appellants. The appellants claimed the estate on the ground that the sale in 1910 conferred no title on the respondents as Ram Narayan had then only a spes successionis. The respondents contended that they became entitled to the properties when Ram Narayan acquired them as heir in 1926. The learned Judges, Sir S. M. Sulaiman, C. J., and Rachhpal Singh, J., held, agreeing with the decision in 29 Mad LJ 733 : (AIR 1915 Mad 972 ) and differing from 65 Mad LJ 588 : (AIR 1933 Mad 795 ) and Bindeshwari Singh v. Har Narain Singh, ILR 4 Luck 622 : (AIR 1929 oudh 185), that S. 43 applied and that the respondents had acquired a good title. In coming to this conclusion, they relied on the illustration to S. 43 as indicating its true scope, and observed : Section 6 (a) would, therefore, apply to cases where professedly there is a transfer of a mere spes successionis, the parties knowing that the transferor has no more right than that of a mere expectant heir. The result, of course, would be the same where the parties knowing the full facts fraudulently clothe the transaction in the garb of an out and out sale of the property, and there is no erroneous representation made by the transferor to transferee as to his ownership. But where an erroneous representation is made by the transferor to the transferee that he is the full owner of the property transferred and is authorized to transfer it and the property transferred is not a mere chance of succession but immovable property itself, and the transferee acts upon such erroneous representation, then if the transferor happens later, before the contract of transfer comes to an end, to acquire an interest in that property, no matter whether by private purchase, gift, legacy or by inheritance or otherwise, the previous transfer can at the option of the transferee operate on the interest which has been subsequently acquired, although it did not exist at the time of the transfer. (pp. 478-479) (of ILR All) : (at p. 246 of AIR). This decision was followed by the Bombay High Court in Vithabai v. Malhar Shankar, ILR (1938) Bom-155 : (AIR 1938 Bom 228 ), and by the Patna High Court in Ram Japan v. Jagesara Kuer, AIR 1939 Pat 116 . A similar view had been taken by the Nagpur High Court in Bismilla v. Manulal Chabildas, AIR 1931 Nag 51. 18. The preponderance of judicial opinion is in favour of the view taken by the Madras High Court in 29 Mad LJ 733 : (AIR 1915 Mad 972 ), and approved by the Full Bench in the decision now under appeal. In our judgment, the interpretation placed on S. 43 in those decisions is correct and the contrary opinion is erroneous. We accordingly hold that when a person transfers property representing that he has a present interest therein, whereas he has in fact, only a spes successionis, the transferee is entitled to the benefit of S. 43, if he has taken the transfer on the faith of that representation and for consideration. In the present case, Santhappa, the vendor in Ex. III, represented that he was entitled to the property in praesenti, and it has been found that the purchaser entered into the transaction acting on that representation. He therefore acquired title to the properties under S. 43 of the Transfer of Property Act, when Santhappa became in title on the death of Gangamma on February 17, 1933 and the subsequent dealing with them by Santhappa by way of release under Ex. A did not operate to vest any title in the appellant.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]Considering the scope of the section on its term, it clearly applies whenever a person transfers property to which he has no title on a 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. But apart from that, the section is absolute and unqualified in its operation. It applies to all transfers which fulfil the conditions prescribed therein, and it makes no difference in its application, whether the defect of title in the transferor arises by reason of his having no interest whatsoever in the property, or of his interest therein being that of an expectant heirSection 6(a) enacts a rule of substantive law, while S. 43 enacts a rule of estoppel which is one of evidence. The two provisions operate on different fields, and under different conditions, and we see no ground for reading a conflict between them or for cutting down the ambit of the one by reference to the other. In our opinion, both of them can be given full effect on their own terms, in their respective spheres. To hold that transfers by persons who have only a spes successionis at the date of transfer are not within the protection afforded by S. 43 would destroy its utility to a large extentThere would have been considerable force in this argument if the question fell to be decided solely on the terms of S. 6(a). Rules of estoppel are not to be resorted to for defeating or circumventing prohibitions enacted by statutes on grounds of public policy. But here the matter does not rest only on S. 6(a). We have, in addition, S. 43, which enacts a special provision for the protection of transferees for consideration from persons who represent that they have a present title, which, in fact, they have not. And the point for decision is simply whether on the facts the respondents are entitled to the benefit of this section. If they are, as found by the courts below, then the plea of estoppel raised by them on the terms of the section is one pleaded under, and not against the statute15. This reasoning is open to the criticism that it ignores the principle underlying S. 43. That section embodies, as already stated, a rule of estoppel and enacts that a person who makes a representation shall not be heard to allege the contrary as against a person who acts on that representation. 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 relevat words of S. 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 in making the representation, and that what is material is that he did make a representation and the transferee has acted on it. Where the transferee knew as a fact that the transferor did not possess the title which he represents he has, then he cannot be said to have acted on it when taking a transfer, Section 43 would then have no application, and the transfer will fail under S. 6(a). But where the transferee does act on the representation, there is no reason why he should not have the benefit of the equitable doctrine embodied in S. 43, however fraudulent the act of the transferor might have been16. The learned Judges were further of the opinion that in view of the decision of the Privy Council in Annanda Mohan Roy v. Gour Mohan Mullick, 50 Ind App 239 : ILR 50 Cal 929 : (AIR1923 PC 189) and the decision in Lakshmi Narayana Jagannada Raju v. Varada Lakshmi Narasimha, ILR 39 Mad 554   : (AIR 1916 Mad 579) which was approved therein, the illustration to S. 43 must be rejected as repugnant to it. In Jagannada Rajus case, ILR 39 Mad 554   : (AIR 1916 Mad 579) the question was whether a contract entered into by certain presumptive reversioners to sell the estate which was then held by a widow as heir could be specifically enforced, after the succession had opened. It was held that as S. 6 (a) forbade transfers of spes successionis, contracts to make such transfers would be void under S. 23 of the Contract Act, and could not be enforced. This decision was approved by the Privy Council in 50 Ind App 239: ILR 50 Cal 929: (AIR 1923 PC 189  ) where also the question was whether a contract by the nearest reversioner to sell property which was in the possession of a widow as heir was valid and enforceable, and it was held that the prohibition under S. 6(a) would become futile, if agreements to transfer could be enforced. These decisions have no bearing on the question now under consideration, as to the right of a person who for consideration takes a transfer of what is represented to be an interest in praesenti. The decision in 65 Mad LJ 588 : (AIR 1933 Mad 795  ) is, in our view, erroneous, and was rightly overruled in the decision now under appeal18. The preponderance of judicial opinion is in favour of the view taken by the Madras High Court in 29 Mad LJ 733 : (AIR 1915 Mad 972  ), and approved by the Full Bench in the decision now under appeal. In our judgment, the interpretation placed on S. 43 in those decisions is correct and the contrary opinion is erroneous. We accordingly hold that when a person transfers property representing that he has a present interest therein, whereas he has in fact, only a spes successionis, the transferee is entitled to the benefit of S. 43, if he has taken the transfer on the faith of that representation and for consideration. In the present case, Santhappa, the vendor in Ex. III, represented that he was entitled to the property in praesenti, and it has been found that the purchaser entered into the transaction acting on that representation. He therefore acquired title to the properties under S. 43 of the Transfer of Property Act, when Santhappa became in title on the death of Gangamma on February 17, 1933 and the subsequent dealing with them by Santhappa by way of release under Ex. A did not operate to vest any title in the appellant.