DOCTRINE OF HOLDING OUT
General rule regarding the transfer of property is that no one can transfer a better title than what he himself possesses. However, Section 41 of the Transfer of Property Act, 1882 makes an exception to this rule. Thus, transfer made by the ostensible owner of the property is valid subject to condition specified in Section 41. This Section is a statutory application of the law of estoppel. An ostensible owner is one who has all the indicia of ownership without being the real owner.
Transfer by ostensible owner [Section 41]: Where, with the consent, express or implied, of the persons interested in immovable 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 authorized 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
In simple words, if sale is made by ostensible owner for a consideration, then such sale is valid if transferee has taken reasonable care to see that transferor has power to make such sale.
Essential Conditions:
(1) Transferor is the ostensible owner.
(2) He is so by the consent, express or implied, of the real owner.
(3) Transfer is for consideration, and
(4) Transferee has acted in good faith taking reasonable care to ascertain that the transferor had power to transfer.
Examples:
(a) A made a gift of property to B but continued in possession of the gifted property. He purported to
exercise a power of revocation and then transferred the property to the defendant. The gift, however, was not revocable as it was an unconditional gift. B seeks to recover possession from the defendant. The defendant invoked protection under Section 41. In the given example, the donor is not an "ostensible owner" holding the property with the consent of the real owner. The defendant cannot, therefore, invoke the protection of Section 41.
(2) The manager of a point Hindu family consisting of some minor members alienated the ancestral house to P without any necessity and the alienee transferred it to the defendants. The minors challenged the alienation. The defendants sought protection under Section 41.
Here Section 41 has no application for "P was not the ostensible owner of the ancestral family house with the consent, express or implied, of the persons interested in the said ancestral house in as much as the plaintiff, had an interest in the said house, did not and could not by reason of the disability of infancy give their consent".
DOCTRINE OF FEEDING THE GRANT BY ESTOPPLE
Transfer by unauthorized person who subsequently acquires (Section 43): Where, a person fraudulently or erroneously represents that he is authorized to transfer certain immovable property and professes to transfer such property for consideration, such transfer shall, at the option of the transferee, operate on any interest which the transferor may acquire in such property at any time during which the contract of transfer subsists.
In simple words. If a transferor transfer the property of other which is is not entitled, then subsequently when he acquires the property, he will have to transfer the property to the transferee
.
Example: A, a Hindu who has separated from his father B, sells to C three fields, X Y ,Z representing that A is authorized to transfer the same. Of these fields Z does not belong to A, it having been retained by B on the partition, but on B's dying A as heir obtains Z. C, not having rescinded the contract of sale, may require A to deliver Z to him.
