Section 41 of Transfer of Property Act II Transfer by Ostensible Owner  

Section 41 of Transfer of Property Act II Transfer by Ostensible Owner #tpa1882 #ostensibleowner
This video covers the topics -
Section 41 (Bare Act)
Where, with the consent, express or implied, of the persons interested in immoveable property, a person is the ostensible owner of such property and transfers the same for consideration, the transfer shall not be voidable on the ground that the transferor was not authorised to make it, provided that the transferee, after taking reasonable care to ascertain that the transferor had power to make the transfer, has acted in good faith.
Essentials of Section 41
1. Transfer of Property is done by Ostensible owner.
2. Transfer of Property with the express or implied consent of real owner
3. Transfer must be with consideration.
4. Transferee should have taken reasonable care
5. Transferee acted in good faith.
Benami Transaction
Benami transaction implies that the property is held by one person whereas, the consideration for the same is provided by another. Hence, the real owner is the person who provides the consideration and the person whose name the property is considered as the ostensible owner.
Benami transaction are now dealt with Benami Transaction Act, 1988. This act declares that ostensible owner will be treated as real owner of property.
Section 3(3) of Benami Transaction Act, 1988 says that whoever buys the property in name of another would be punished.
Exceptions -
1. If a person buys the property in name of his wife.
2. if a person buys the property in name of an unmarried daughter.
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Case Laws discussed in the video-
Jay Dayal Poddar v. Bibi Hazra
In this case S.C pointed out some test by which an ostensible owner can be identified.
1. Source of Income.
2. Relationship between the parties.
3. Custody of property on paper.
Ramcoomar Koondoo v. Maria Mcqueen Case -
In this Alexander bought a property in the name of Bunoo Bebee (mistress of Alexander).In 1843 she sold the property to Ramdhoni Kundoo (father of Ramcoomar Kundoo) who later transfer this property to Ramcoomar Kondoo by will.When Mcqueen (daughter of Alexander) came to know about property she filed a case that transfer by Bunoo Bebee is not valid.
Decision - Calcutta HC decided in favour of Macqueen. But the decision of Calcutta HC was reversed by the Privy Council. P.C stated that Sale was bonafide in nature and that reasonable inquiry as a prudent man was made by the appellant.
Gurbaksh Singh v. Nikka Singh
In this case there was a dispute between the shareholder of a property of hindu undivided family. When the dispute was in progress purchaser bought a share of one the shareholder at a very low price. It was held that the act was not in good faith.
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