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Legal Maxim: Doctrine Of Ostensible Owner

Ostensible is derived from the Latin ostendere, which means "to show," and it denotes a discrepancy between a declared or implied aim or reason and the true one.

synonyms of ostensible are apparent, illusory, and seeming. While all these words mean "not actually being what appearance indicates,"

Bare Meaning
"Ostensible" means "apparent" or "seeming"

In other words, a person may have possession and enjoyment of property, and his name may be entered in official records, but he may not be the true owner of that property

Meaning Applied
  • Section 41 of the transfer of property act,1882 says: transfer by ostensible owner
  • This section only applies if the transferor is an ostensible owner. However, determining whether a person is an ostensible or real owner is difficult because he possesses all of the characteristics of an actual owner except the intention to own the property.
  • As a result, it is up to the court to determine whether the transferor was an ostensible owner or not.
  • Property includes everything that is owned and possessed by a person who has a legal title over it.

Nemodat Quod Non Habet means "No one can give what he does not have" This is one of the most important maxims under Transfer of Property. "A person cannot convey a better title than he himself has," he said. However, there are several exceptions to this principle, one of which is the Owner who has legal status under the Transfer of Property Act of 1882

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 acted in good faith after taking reasonable precautions to ensure that the transferor had the authority to make the transfer.

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 authorized to make it.

Example of ostensible owner:
For example, A owns a property in India, he authorizes B to perform all rights of ownership relating to the property and leaves for the U.K. B will be the ostensible owner of such a property and all acts done by him will be considered at the acts of A.

The right to property is guaranteed under article 31 of Indian constitution which was abolished by the 44th amendment and subsequently made a constitutional right under article 300A of the Indian Constitution which states no person shall be deprived of his property except by authority of law.

The concept of ostensible owner originated to protect the interest of innocent third parties and property owners.

To make use of Section 41 of the transfer of property act,1882, one must meet specific prerequisites.

They're as follows:
  1. The most fundamental criterion is that the individual transferring the property must be the ostensible owner.
  2. The actual owner's consent, which might be implied or expressed, is necessary.
  3. In exchange for the property, the ostensible owner must be compensated.
  4. The transfer is for consideration.
  5. This section, needless to say, does not apply not to the transfer of movable property, and only to that of immovable.
  6. The doctrine of estoppel underpins the concept of ostensible owner transfer, which states that if the actual owner of property portrays someone apparent as the owner to third parties and those third parties act on that representation, the real owner cannot retract his representation.
Questions related to ostensible owner:
What are the rights of ostensible owner?
The ostensible proprietor is not the genuine owner of a property. He just addresses himself out as a genuine owner to the outsiders. Such an ostensible owner has every one of the privileges of possession in a property without being its genuine owner.

Can ostensible owner sell property?
A transfer made by an ostensible owner is not voidable because the transferor was not allowed to perform it, as long as the transferee was: Taking reasonable precautions to ensure that the transferor has the necessary authority to effectuate the transfer, and Acting with bona fide intention.

What is difference between ostensible owner and Benami transaction?
Under Transfer of property act it is clearly mentioned that when the one person pays consideration & purchases the property in the name of another person the latter is considered as ostensible owner & the transaction is benami transaction. Whereas, under the Benami Transaction Act it is prohibited.

What is ostensible authority of an agent?
This doctrine has an assumption that there is no authority at all. Conclusion: Thus, the principal is not liable to any third party, if the principal has taken all the due care that the agent is not conducting the business by following the orders of the principal.

Which property can be transferred by ostensible owner?
Immoveable property, as already given under sec. 41 of transfer of property act,1882 "when a person acts on the express or implied consent of a person who is vested in a certain immovable property, that person is deemed the 'ostensible owner' of that property".

Case Laws:
  1. E.Yesodammal Petitioner v. E. Govindan, 2010 SCC ONLINE MAD 1388.
    Where the real owner makes an attempt to enforce his right as against the ostensible owner, quite against the letter and spirit of embargo found under Section 4 of the said Act. The said provision would not have any application to a case where the ostensible owner had relinquished his right to the property in favor of the real owner of the property long prior to the coming into force of the present Act.
  2. State Of Punjab v. Surjit Kaur (Dead) Through Lrs. And Others, 2012 SCC 12 155
    The widow can be ostensible owner to the extent that she has a right during her lifetime. She ceased to be an ostensible owner after her death and cannot pass on a better title than what she had. Admittedly, she had a life estate in the property and after her death; the title in the land would revert to the State of Punjab.
  3. Sankara Hali & Sankara Institute of Philosophy and Culture v. Kishori Lal Goenka and Another, 1996 SCC 7 55.
    This provision is clearly intended to protect the third-party transferees who are bona fide and after due care and caution purchase the property from the ostensible owner taking him to be the real owner.

    It may next be noted that even if it is so assumed, we are of the opinion that in the instant case Surender Kumar having already released his right, title and interest as ostensible owner of the property in Favour of the firm, the firm had acquired complete title over the property long before the Act came into force. Such a transaction which preceded the coming into force of the Act has not been voided by any specific provision in the Act.
  4. Jay Dayal Poddar vs Biwi Hazara, 1974:
    Supreme Court held that the person is an ostensible owner or not is a subjective question to be decided based on facts and circumstances. The burden of proof that a transaction is Benami lies with the person who claims that he is the real owner.
  5. Ramcoomar Koondoo and Another v. John and Maria Mcqueen, 1872 SCC ONLINE CAL 54.
    It is a principle of natural equity, which must be universally applicable that, where one man allows another to hold himself out as the owner of an estate, and a third person purchases it, for value, from the apparent owner in the belief that he is the real owner, the man who so allows the other to hold himself out shall not be permitted to recover upon his secret title, unless he can overthrow that of the purchaser by showing, either that he had direct notice, or something which amounts to constructive notice, of the real title; or that there existed circumstances which ought to have put him upon an inquiry that, if prosecuted, would have led to a discovery of it.

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