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IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT NAGPUR
A.S. CHANDURKAR, J.
Sau. Maya Namdeorao Kharodkar - APPELLANT
VERSUS
Bhagyashree Pramod Dave & Ors. - RESPONDENTS
APPEAL NO.317 OF 2014
Decided On : 31-07-2017
Bona Fide Purchaser - Property Dispute - Transfer of Property Act, 1882, Section 51 - Summary: The court considered whether the defendant no.3 was a bona fide purchaser of the suit property and satisfied the requirements of Section 51 of the Transfer of Property Act, 1882. The court found that the defendant no.3 failed to prove the ingredients of Section 51 and was not entitled to compensation. The court emphasized the importance of necessary pleadings and the need for a purchaser to act in good faith and take reasonable care and caution in making enquiries into the title of the property.
Fact of the Case:
The plaintiff purchased a plot from defendant no.1, later found defendant no.3 in possession, and filed a suit for declaration of nullity of subsequent sale deeds. The trial court decreed the suit in favor of the plaintiff, and the defendant no.3 appealed.
Finding of the Court:
The court found that the plaintiff proved her title and that the defendant no.3 failed to prove her status as a bona fide purchaser. The court dismissed the appeal and continued the interim relief for six weeks.
Issues: Validity of subsequent sale deeds, entitlement of defendant no.3 as a bona fide purchaser, and compensation under Section 51 of the Transfer of Property Act, 1882.
Ratio Decidendi: The defendant no.3 failed to prove the ingredients of Section 51 of the Transfer of Property Act, 1882, and the absence of necessary pleadings regarding her belief in good faith and absolute entitlement to the property was a handicap in her claim for compensation.
Final Decision: The appeal was dismissed, and the interim relief was continued for six weeks.
Based on the provided legal document, the key points regarding the issue of a bona fide purchaser under Section 51 of the Transfer of Property Act, 1882, are as follows:
Criteria for Bona Fide Purchase: To qualify as a bona fide purchaser entitled to compensation under Section 51, the purchaser must act in good faith and take reasonable care and caution in verifying the title of the property. This involves making necessary enquiries and verifying documents of title to ensure that they are acting on a legitimate and truthful basis (!) (!) .
Importance of Necessary Pleadings: The absence of specific pleadings claiming that the purchaser believed in good faith and was absolutely entitled to the property is a significant handicap. General assertions of being a bona fide purchaser for valuable consideration are insufficient unless supported by pleadings that demonstrate the purchaser’s genuine belief in their entitlement and good faith (!) .
Enquiries and Due Diligence: The purchaser's failure to issue public notices, make enquiries, or verify the vendor’s title before executing the sale deed is a critical factor. The usual course of business requires that a purchaser act reasonably and not wilfully ignore obvious defects or other owners’ rights. If the purchaser neglects these enquiries, it undermines the claim of acting in good faith (!) (!) .
Effect of Lack of Notice and Due Inquiry: Even if the purchaser claims to have purchased for valuable consideration, the absence of public notice, lack of enquiry, and ignorance of other owners’ rights suggest that the purchaser did not act with the requisite good faith and reasonable caution. This is especially relevant when the purchaser's actions are not consistent with the usual course of prudent conduct in property transactions (!) (!) .
Legal Consequences: If the purchaser fails to satisfy the ingredients of Section 51, particularly the aspect of acting in good faith with reasonable care, they are not entitled to claim compensation or relief under the section. The court emphasizes that mere belief or assertion without supporting pleadings and evidence is inadequate to establish a bona fide purchase (!) (!) .
Outcome in the Case: The court found that the defendant no.3 failed to prove that she acted in good faith or took reasonable care in verifying the title, and therefore, she was not entitled to relief under Section 51. The absence of necessary pleadings and evidence was a decisive factor in dismissing the appeal (!) .
In summary, the legal principles underscore the necessity for a purchaser to act with due diligence, make proper enquiries, and plead their good faith belief explicitly to qualify for protection under Section 51 of the Transfer of Property Act. The court’s decision highlights that neglecting these aspects can invalidate claims for compensation or relief as a bona fide purchaser.
1. In view of notice for final disposal issued earlier, the learned Counsel for the parties have been heard on the following substantial question of law:
Whether the defendant no.3 has proved that she was a bona fide purchaser of the suit property on 15th April, 1998 and has satisfied the ingredients of Section 51 of the Transfer of Property Act, 1882 for being entitled for any relief?
2. The facts giving rise to this second appeal are that the respondent no.2 herein – defendant no.1 was the owner of the suit property which is plot bearing No.12 admeasuring about 2700 sq.ft. On 29-11-1994, the respondent no.1 herein – original plaintiff purchased this plot from the defendant no.1 for consideration of Rs.75,000/-. On account of the fact that the plaintiff's husband was in service the plaintiff travelled with her husband from place to place outside Amravati. On 14-7-2001 when the plaintiff and her husband visited the suit property, they found the appellant – defendant no.3 in possession thereof. On 15-7-2001, the plaintiff issued a telegram to the defendant no.3 to stop the construction work undertaken by her. She then approached the defendant no.1 who was her vendor. After making further enquiries it was found that on 21-8-1996 the defendant no.1 had sold the suit property to the defendant no.2. Thereafter on 15-4-1998, the defendant no.2 sold the suit property to the defendant no.3. In aforesaid facts, the plaintiff on 15-12-2001 filed suit for declaration that the sale deed dated 21-8-1996 and 15-4-1998 were null and void and did not confer title on defendant no.3. She sought vacant possession of the suit property along with a prayer for mandatory injunction that the construction made by the defendant no.3 be directed to be demolished.
3. The defendants filed their written statement. The defendant no.1 took the stand that the sale deed in favour of the plaintiff was a nominal document. The defendant no.2 in his written statement pleaded that after making due enquiries, he had purchased the suit property from the defendant no.1. The defendant no.3 filed reply to the application for temporary injunction that was moved by the plaintiff and in that reply a stand was taken that she was a bona fide purchaser for valuable consideration having purchased the same from the defendant no.2. It was pleaded that initially the defendant no.3 had purchased plot no.11 and thereafter the suit plot which was adjoining. It was further pleaded that after obtaining a loan, the defendant no.3 had started construction on both the plots. The defendant no.3 adopted this reply as her written statement.
4. After the parties led evidence, the trial Court held that the plaintiff had proved that she was the owner of the suit plot by virtue of sale deed dated 29-11-1994. It was further held that the defendant no.2 was not a bona fide purchaser and that the defendant no.3 had no title to the said plot. Accordingly, on 22-12-2006 the trial Court decreed the suit and directed the defendant no.3 to deliver vacant possession to the plaintiff by the end of March, 2007. The sale deeds in favour of the defendant nos.2 & 3 were declared to be null and void.
5. The appeal preferred by the defendant no.3 was also dismissed on 11-3-2014 after recording finding that the defendant no.3 was not entitled for any compensation as claimed under Section 51 of the Transfer of Property Act, 1882 (for short, the said Act). Being aggrieved the defendant no.3 has filed this appeal.
6. Shri A. M. Sudame, learned Counsel for the appellant submitted that though it was claimed by the plaintiff that she had purchased the suit plot on 29-11-1994, her name was not mutated in the revenue records. The defendant no.3 who was already the owner of plot no.11 made necessary enquiries and on being satisfied of the title of the defendant no.2 purchased the adjoining plot from the defendant no.2 on 15-4-1998. She had thereafter undertaken construction work after the amalgamation of both the pl
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