The central legal principle established in the judgment is the application of section 43 of the Transfer of Property Act, emphasizing the need for a subsisting equity in favor of the first transferee and the impact of constructive notice on the transferee's knowledge of true facts.

Hidayatulla, J—This is an appeal from the reversing judgment and decree of Mr. N. V. Sathaye, Additional District Judge, East Berar, Amraoti, in Civil Appeal No. 18-A of 1942, dated the 8th December 1942.

2. The facts are simple. One Shankar Muley had a house and he sold it on the 27th April 1939, by a registered sale-deed (exhibit P-1) to one Mohammad Khalil, but Shankar Muley continued to occupy the house as a tenant having executed a rent-note on the same day in favour of Mohammad Khalil. The sale-deed and rent-note are exhibits P-1 and P-2 respectively. On the 20th June 1939 this Shankar Muley sold the house again by a registered deed (exhibit D-2) to Bulakhidas (defendant) and executed a rent-note in his favour also, and thus continued in possession. Shankar Muley then represented to the plaintiff (respondent) that he was willing to sell the house to her and that he would purchase the house from Azrul Haq (son of Mohammad Khalil) and then convey it to the plaintiff-respondent. Accordingly the plaintiff (respondent) gave Rs. 400 with which Shankar Muley purchased the house from Azrul Haq on the 15th January 1940 by a registered sale-deed and the same day executed a sale-deed for Rs. 825 as well as a rent-note in her favour. The sale-deed of Azrul Haq was registered on the 15th January 1940 and that of the plaintiff (respondent) on the 16th January 1940.

3. Both Bulakhidas and Mst. Kamla Bai independently brought suits for possession; that of Kamla Bai (plaintiff-respondent) being Civil Suit No. 183-A of 1940 decided on the 27th November 1940 and that of Bulakhidas being Civil Suit No. 209-A of 1940 decided on the 22nd November 1940. Bulakhidas obtained possession in execution of his decree and when Kamla Bai wanted to execute the decree she found him in possession, hence this suit for a declaration.

4. The trial Court dismissed Kamla Bai's suit. The first appellate Court reversed the decree and the appeal is being prosecuted by Bulakhidas's legal representatives against Kamla Bai. The first Court found that the plaintiff was unable to prove payment of consideration. It also held that there was constructive notice to the plaintiff and that her purchase was not bona fide as there was no consideration and as she made no inquiry into title. She could have also known of the existence of the option if she had made any inquiry at all.

5. The first appellate Court found that since the sale-deed in favour of Mohammad Khalil was registered, defendant Bulakhidas must be deemed to have had constructive notice of it and hence he could not have been deceived by the fraudulent or erroneous representations of Shankar Muley and he must be deemed to have bought a defective title with his eyes open. The lower appellate Court held that though the defendant had exercised his option by his conduct the plaintiff is protected because her purchase was for consideration and bona fide and that even if there was constructive notice, there was no notice of the existence of the option.

6. Shri Bobde who supported the above judgment, raised a point which merits consideration at the very start. He said that there is no pleading of any representation and he argued that the condition precedent to the application of section 43, Transfer of Property Act, first paragraph, is that there should be an erroneous or fraudulent representation. He argues that in this case the defendant did not plead any representation at all. Now the word 'representation' here must bear the same meaning which it bears under the law of contract. It has been decided over and over again that representation need not be in any particular form. Sometimes silence in answer to a question or a nod or a smile is held to be sufficient. A representation could be by word of mouth or by a document. In exhibit D-2 Shankar Muley put down in writing: I have not transferred the said immovable property to anybody in any manner whatsoever. Nor has anybody (any) rights, interest or share (therein).

7.