Who is an Ostensible Owner and its Legal Status
The Transfer of Property Act, 1882, is a major piece of legislation in India that governs the transfer of ownership of property from one person to another. The concept of an ostensible owner is an important aspect of this Act, as it provides a legal framework for recognizing and protecting the rights of individuals who hold property as if they were its owners, even though they may not have a formal title to it.
An ostensible owner is a person who appears to be the owner of a property, but who does not have a formal title to it. The term is commonly used in cases where an individual has taken possession of a property on behalf of another person or has acquired it through a transfer that was not recorded in the appropriate records. Ostensible owners are entitled to all the rights and privileges of ownership, including the right to transfer the property, the right to mortgage or pledge it, and the right to use it for their own purposes.
Ostensible Owner: Legal Status
The Transfer of Property Act, 1882, provides that an ostensible owner can transfer their rights in the property to others, just as an actual owner can. This transfer can be done through a sale, gift, or mortgage, among other methods. However, it is important to note that an ostensible owner’s transfer of property may be subject to the same restrictions as an actual owner’s transfer, and may be subject to challenges or objections from other parties. When any person purchases the property during pendency of the Suit, cannot be said to be a bona-fide purchaser.
The following are the sections of the Act that deal specifically with ostensible ownership:
Section 41: This Section 41 recognizes the concept of ostensible ownership and provides that a transfer of property made by an ostensible owner is valid, if the transferee acts in good faith and without notice of any defects in the transferor’s title. This section serves to protect the rights of the transferee who acquires the property from an ostensible owner in good faith and without notice of any defects in the transferor’s title.
Under the Transfer of Property Act, 1882, ostensible owners are considered to have the same legal status as actual owners, and are entitled to the same rights and protections as if they were the formal titleholders. This means that ostensible owners can transfer their rights in the property to others, and that their ownership is recognized and protected by the law. Furthermore, the Act provides that an ostensible owner can sue for possession of the property, and that any transfer of the property to a third party will be recognized as valid and enforceable if it is made in good faith and without knowledge of any defects in the title.
– Essentials ingredients of S.41 of Transfer of Property Act –
- The transferor is the ostensible owner,
- He/ She is so by the consent, express or implied of the real owner;
- The transfer is for consideration; and
- The transferee has acted in good faith, taking reasonable care to ascertain that the transferor had power to transfer.
Ostensible Owner and Possession
One of the key features of the ostensible owner concept is that it is based on the principle of possession. In order for an individual to be considered an ostensible owner, they must have taken physical possession of the property and be using it as if they were the actual owner. This means that an individual who merely holds a title to a property but has not taken physical possession of it cannot be considered an ostensible owner.
Once the properties are found in the possession of third person at the time of sale, the transferee is under obligation to take reasonable care to ascertain as to how and why the transferor was transferring the properties of which he was not in possession. By virtue of the statutory definition, transferee must be deemed to have notice that the real title was in the person in actual possession. If with such statutory requirement the plaintiff did not make enquiry as to the factum of possession, he could not be said to have acted in good faith taking reasonable care to ascertain the real owner. The mere examination of the documents of title is not sufficient to hold that the person making purchase has acted in good faith taking reasonable care to ascertain the real owner.
A transferee operating in good faith must exercise the same level of caution that is expected of an ordinary man of business. If the ostensible owner is in possession of the property and presents the title deed, the transferee cannot be expected to conduct any in-depth research in the absence of any reason to suspect that the transferor may not be the true owner.
Burden of Proof – It is not enough for the party seeking to invalidate a sale to show that proper inquiry was not made. The onus lies on him to prove that there was something to invoke an inquiry and what that inquiry would have revealed. It is when the preliminary burden is discharged by the party attempting to invalidate the sale that proper inquiry was not made that the burden shifts on the transferee of proving that he took reasonable care to inquire into the title.
Proof that a transferee exercised reasonable care and acted in good faith is not enough if the transferor be not the ostensible owner of the immoveable property with the consent, express or implied, of the person interested.
Therefore, the standard in nature of the necessary inquiry by the transferee must therefore vary according to the different circumstances of each case.
Landmark case laws have helped to clarify the concept of ostensible ownership as per the Transfer of Property Act, 1882. These cases have established that an ostensible owner has the same rights and protections as an actual owner, and that a transfer of property by an ostensible owner is valid and enforceable if it is made in good faith and without knowledge of any defects in the title. These cases have also emphasized the importance of good faith and the absence of fraud in the transfer of property by ostensible owners, and have helped to ensure that the rights of all parties are protected in the transfer of property.
In conclusion, the ostensible owner concept is an important aspect of the Transfer of Property Act, 1882, that provides a legal framework for recognizing and protecting the rights of individuals who hold property as if they were its owners. This concept is based on the principle of possession and provides ostensible owners with the same rights and protections as actual owners. It is important for individuals to understand the legal status of ostensible owners, as this can impact their ability to transfer property and enforce their rights in it.
- Amarjit Singh vs. Bhag Singh 2002-2, Punjab LR 589 (592)
- Madhab Sahu vs. Hatkishore Sahu, AIR 1975 Ori (49) (DB): ILR 1974 Cut 139.
- Rajani Kanta vs. Bajiram, AIR 1929 Cal 636
- Shankar vs. Daoji, AIR 1931 PC 118.
- Beyam Singh vs. Ramjanam Ahir, AIR 1961 Pat 16.
- Book – Commentaries on Transfer of Property Act by Darashaw J Vakil & Dr HR Jhingta Fifth edition, Volume 1.