Feeding the Grant by Estoppel in Indian Law

Feeding the Grant by Estoppel: An Analysis under Indian Law

Introduction

The doctrine of 'feeding the grant by estoppel,' also known as 'estoppel by deed' or the 'after-acquired title doctrine,' is a principle rooted in equity and aimed at preventing injustice. It postulates that if a person, who has no title or an imperfect title to a property, purports to transfer it and subsequently acquires a good title, the benefit of such subsequent acquisition enures to the transferee, thereby 'feeding' the estoppel created by the initial grant. This doctrine ensures that a grantor cannot derogate from his own grant. In India, this equitable principle finds statutory recognition primarily in Section 43 of the Transfer of Property Act, 1882 (TPA).[17] This article seeks to provide a comprehensive analysis of this doctrine, its essential ingredients, judicial interpretations, and its interplay with other legal provisions under Indian law, drawing significantly from landmark case law.

The Doctrine of Feeding the Grant by Estoppel: Conceptual Moorings

Equitable Origins

The fundamental basis of the doctrine is the equitable principle that a person who has promised more than he can perform must make good his contract when he acquires the power of performance.[9], [6] As observed by the Supreme Court in Renu Devi v. Mahendra Singh And Others (2003), the doctrine is "in essence a principle of equity."[17] The Patna High Court in Abdul Kabir v. Mt. Jamila Khatoon (1950) elaborated that equity would place future goods, sufficiently earmarked and subject to specific performance, in a state of anticipatory isolation to give the beneficial interest to the intended transferee once the property comes into existence or into the hands of the transferor.[9]

The English Law Position

The doctrine is well-established in English law. In Rajapakse v. Fernando (1920), the rule was stated as: "where a grantor has purported to grant an interest in land which he did not at the time possess, but subsequently acquires, the benefit of his subsequent acquisition, goes automatically to the earlier grantee, or as it is usually expressed, feeds the estoppel."[7], [17] The Privy Council in Tilakdhari Lal And Another v. Khedan Lal And Others (1921), through Lord Buckmaster, affirmed this: "If a man who has no title whatever to property grants it by a conveyance which in form would carry the legal estate, and he subsequently acquires an interest sufficient to satisfy the grant, the estate instantly passes."[18], [17] While there is some debate among Indian scholars about the "estate instantly passes" aspect, the core doctrine of feeding the estoppel is firmly applied in India.[17]

Statutory Recognition in India: Section 43 of the Transfer of Property Act, 1882

Section 43 of the Transfer of Property Act, 1882, statutorily embodies the doctrine of feeding the grant by estoppel in India.[17] The section reads:

"Where a person fraudulently or erroneously represents that he is authorised 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. Nothing in this section shall impair the right of transferees in good faith for consideration without notice of the existence of the said option."[16]

The Supreme Court in Jumma Masjid, Mercara v. Kodimaniandra Deviah And Others (1962) extensively discussed Section 43, affirming that it protects transferees who act in good faith based on the transferor's representation of having a present interest, even if erroneous.[5], [21] The Court emphasized that Section 43 embodies the principle of estoppel, preventing a transferor from denying representations made if the transferee acted upon them.[5]

Essential Conditions for Invoking Section 43, TPA

For the application of Section 43, certain conditions must be fulfilled:

  1. Fraudulent or Erroneous Representation: There must be a representation by the transferor that he is authorised to transfer the property. This representation can be fraudulent or erroneous.[16] The Supreme Court in Hardev Singh v. Gurmail Singh (Dead) By Lrs. (2007) noted that "it is immaterial whether the transferor acts bona fide or fraudulently in making the representation."[10] This was reiterated in Jumma Masjid.[5] However, in Ram Bhawan Singh And Others v. Jagdish And Others (1990), Section 43 was held inapplicable as there was no fraudulent or erroneous representation.[4]
  2. Transfer for Consideration: The transfer must be for consideration.[16] This distinguishes the statutory application under Section 43 from gratuitous transfers like gifts. In Renu Devi v. Mahendra Singh (2003), the Supreme Court clarified that Section 43 TPA does not "in terms apply" to a deed of gift (as it is not for consideration), but the underlying equitable principle of feeding the grant by estoppel can still be invoked.[7], [17]
  3. Competency to Contract: The transferor must be competent to contract.[10], [8] If the transferor is incompetent (e.g., a minor), the transfer is void ab initio, and Section 43 cannot validate it.
  4. Subsistence of the Contract of Transfer: The contract of transfer must be subsisting at the time the transferor acquires the interest or when the claim for the property is made by the transferee.[10], [8]
  5. Subsequent Acquisition of Interest: The transferor must subsequently acquire an interest in the property professed to be transferred.
  6. Transferee's Option: The benefit of the subsequently acquired interest operates at the option of the transferee.[16] The transferee can choose to take advantage of the subsequently acquired title.

The rights of a subsequent transferee in good faith for consideration, without notice of the prior transferee's option, are protected by the proviso to Section 43.[16]

Distinction from Section 6(a) of the Transfer of Property Act, 1882

Section 6(a) of the TPA provides that the chance of an heir-apparent succeeding to an estate, the chance of a relation obtaining a legacy on the death of a kinsman, or any other mere possibility of a like nature, cannot be transferred. This is known as spes successionis. The Supreme Court in Jumma Masjid, Mercara v. Kodimaniandra Deviah And Others clarified the distinction: Section 6(a) deals with the subject matter of the transfer (a non-transferable expectancy), while Section 43 deals with the capacity of the transferor who makes a representation of having a present title.[5] If a person represents that he has a present interest which he is competent to transfer, then even if he possesses only a spes successionis, Section 43 can apply if he subsequently acquires full title. The two sections operate in different fields and do not conflict.[5]

Distinction from Section 41 of the Transfer of Property Act, 1882

Section 41 TPA deals with transfers by an ostensible owner. It protects a transferee who, after taking reasonable care to ascertain that the transferor had power to make the transfer, acts in good faith. Section 43, on the other hand, applies where the transferor, without being an ostensible owner, makes a fraudulent or erroneous representation about his authority to transfer and subsequently acquires the interest. As noted in Jharu Ram Roy v. Kamjit Roy And Others (2009) and C. Rameswaran And 4 Others Petitioners v. N. Sambandam And 8 Others S (2009), Section 41 focuses on the ostensible ownership and the transferee's diligence, while Section 43 focuses on the transferor's representation and subsequent acquisition of title.[6], [8]

Scope and Application: Judicial Interpretations

Void Transfers and Incompetency

Section 43 cannot be invoked to validate a transfer that is void ab initio due to legal prohibition or incompetency of the transferor. In Hardev Singh v. Gurmail Singh, the Supreme Court held that Section 43 would have no application if the transfer was invalid as being forbidden by law or contrary to public policy under Section 23 of the Indian Contract Act, 1872.[10] Similarly, in Kartar Singh (Dead) By Lrs. And Others v. Harbans Kaur (Smt) (1994), where a mother sold her minor son's share, the sale of the minor's share was declared void. The Supreme Court held that the appellant (transferee) was not entitled to the benefit of Section 43, as the sale by the mother, acting as a natural guardian, was itself void regarding the minor's share.[3] The transferee, in such cases, is often aware of the facts or the legal limitations on the transferor's capacity.

Application in Land Tenure and Abolition Cases

The doctrine has been frequently applied in cases involving land tenure reforms and abolition of inams, where individuals with imperfect or inchoate rights transferred land, and their rights were subsequently perfected by regrant. The Karnataka High Court in Syed Bhasheer Ahamed & Others v. State Of Karnataka (1993) and SRI K S ESWARAIAH v. STATE OF KARNATAKA (2018) affirmed that alienations of Service Inam Lands, made prior to certain amendments but after the principal abolition act, would allow alienees to perfect their title upon subsequent regrant to their alienors, based on the doctrine of feeding the grant by estoppel.[19], [22], [23] This principle was also recognized by the Full Bench in Syed Bhasheer Ahamed, which held that the alienee's right is to claim the benefit of the doctrine envisaged in Section 43.[20] The Supreme Court in N.Venkateshappa Vs. Munemma and others (2016) also held that the principle of feeding the grant by estoppel would enure to the benefit of the alienee who would get good title after regrant.[24]

Knowledge of the Transferee

A point of contention can be the transferee's knowledge of the defect in title. While the phrase "fraudulently or erroneously represents" suggests the transferee might be misled, the Supreme Court in Jumma Masjid stated that "it is immaterial whether the transferor acts bona fide or fraudulently in making the representation."[5], [10] This implies that the focus is on the transferor's representation and subsequent acquisition. However, if the transfer is void due to a patent lack of authority known to both parties (e.g., transfer of minor's property without court sanction where required), Section 43 may not apply, as seen in Kartar Singh.[3] The primary requisite for invoking Section 43 is the representation of authority by the transferor.[20]

Estoppel by Deed

The Madras High Court in Mehanavathy v. Punyakodi . (2012) discussed estoppel by deed, stating that where there is a statement of fact in a deed between parties, an estoppel results. If a vendor executes a sale deed, they are estopped from contending that the purchaser is not the owner, especially if the vendor subsequently acquires a share.[11]

Limitations and Exceptions to the Doctrine

The doctrine of feeding the grant by estoppel, particularly under Section 43 TPA, is subject to certain limitations:

  • Transfers Forbidden by Law: As established in Hardev Singh, the doctrine cannot validate a transfer forbidden by law or contrary to public policy (Section 23, Indian Contract Act).[10] No estoppel can be pleaded contrary to the provisions of a statute.
  • Incompetent Transferor: Transfers by persons legally incompetent to contract (e.g., minors) are void and cannot be cured by Section 43.[3]
  • No Representation: If there is no fraudulent or erroneous representation by the transferor as to his authority, Section 43 is not attracted.[4]
  • Rights of Bona Fide Purchaser for Value Without Notice: The proviso to Section 43 protects a subsequent transferee who acquires the property in good faith, for consideration, and without notice of the option available to the first transferee.[16]
  • Gratuitous Transfers (under Sec 43): Section 43 TPA, by its terms ("for consideration"), does not directly apply to gratuitous transfers like gifts, although the underlying equitable principle may still be invoked.[7], [17]

Broader Context of Estoppel

While "feeding the grant by estoppel" is specific to property transfers and subsequent acquisition of title, it is part of the larger family of estoppel doctrines. Other forms include promissory estoppel and proprietary estoppel. Promissory estoppel, as discussed in cases like Gajanan Saw Mill v. State Of M.P And Others (1973) and Pandurang Tukaram Kamble v. State Of Maharashtra (2014), prevents a party from going back on a promise that was intended to create legal relations and was acted upon, even without consideration.[13], [15] Proprietary estoppel, mentioned in R. Savithammal v. Tahsildar (2016), can arise from encouragement or acquiescence leading another to act to their detriment concerning land.[12] General principles of estoppel by conduct, where a person by words or conduct intimates consent to an act, thereby inducing others to act, were highlighted in B.L Sreedhar And Others v. K.M Munireddy (Dead) And Others (2002).[14] These broader doctrines operate on similar equitable foundations of fairness and preventing unconscionable conduct, though their specific elements and applications differ from Section 43 TPA. The case of Narandas Karsondas v. S.A Kamtam And Another (1977) dealing with the right of redemption in an English mortgage[1], and Kancherla Lakshminarayana v. Mattaparthi Syamala And Others (2008) concerning objector rights in execution proceedings[2], while important in their respective domains of property law, do not directly engage with the doctrine of feeding the grant by estoppel but illustrate the complexities of property rights and their enforcement, within which doctrines like estoppel operate to ensure equity.

Conclusion

The doctrine of feeding the grant by estoppel, statutorily enshrined in Section 43 of the Transfer of Property Act, 1882, plays a crucial role in Indian property law. It upholds the sanctity of representations made during property transactions and ensures that a transferor cannot defeat a prior grant by pleading his own initial lack of title if he subsequently acquires it. Rooted in equity, the doctrine promotes fairness and protects transferees who act upon such representations for consideration. Judicial pronouncements have consistently refined its scope, clarifying its application, essential conditions, and limitations, particularly in distinguishing it from other provisions like Section 6(a) and Section 41 of the TPA, and its inapplicability to transfers that are void ab initio. By ensuring that a grantor's subsequent acquisition of title benefits the grantee, the doctrine reinforces transactional integrity and contributes to the stability of property rights in India.

References

  1. Narandas Karsondas v. S.A Kamtam And Another (1977 SCC 3 247, Supreme Court Of India, 1976)
  2. Kancherla Lakshminarayana v. Mattaparthi Syamala And Others (2008 SCC 14 258, Supreme Court Of India, 2008)
  3. Kartar Singh (Dead) By Lrs. And Others v. Harbans Kaur (Smt) (1994 SCC 4 730, Supreme Court Of India, 1994)
  4. Ram Bhawan Singh And Others v. Jagdish And Others (1990 SCC 4 309, Supreme Court Of India, 1990)
  5. Jumma Masjid, Mercara v. Kodimaniandra Deviah And Others (1962 AIR SC 847, Supreme Court Of India, 1962)
  6. Jharu Ram Roy v. Kamjit Roy And Others (Supreme Court Of India, 2009)
  7. Renu Devi v. Mahendra Singh And Others (Supreme Court Of India, 2003) [Referring to (2003) 10 SCC 200 for the quote on Rajapakse]
  8. C. Rameswaran And 4 Others Petitioners v. N. Sambandam And 8 Others S (Madras High Court, 2009)
  9. Abdul Kabir v. Mt. Jamila Khatoon (Patna High Court, 1950)
  10. Hardev Singh v. Gurmail Singh (Dead) By Lrs. . (Supreme Court Of India, 2007)
  11. Mehanavathy v. Punyakodi . (Madras High Court, 2012)
  12. R. Savithammal v. Tahsildar (Kerala High Court, 2016)
  13. Gajanan Saw Mill v. State Of M.P And Others (Madhya Pradesh High Court, 1973)
  14. B.L Sreedhar And Others v. K.M Munireddy (Dead) And Others (Supreme Court Of India, 2002)
  15. Pandurang Tukaram Kamble v. State Of Maharashtra (Bombay High Court, 2014)
  16. Agricultural Produce Marketing Committee v. Bannamma (Dead) By Legal Representatives . (2015 SCC 5 691, Supreme Court Of India, 2014)
  17. Renu Devi v. Mahendra Singh And Others (2003 SCC 10 200, Supreme Court Of India, 2003)
  18. Tilakdhari Lal And Another v. Khedan Lal And Others (1921 AIR PC 112, Privy Council, 1920)
  19. Syed Bhasheer Ahamed & Others v. State Of Karnataka (1993 SCC ONLINE KAR 281, Karnataka High Court, 1993)
  20. Sri Nipra Channebasava Deshikendra Swamigalu Matadhipathigalu v. C.P Kaveeramma And Others (2007 SCC ONLINE KAR 415, Karnataka High Court, 2007)
  21. Fatu Ram v. Madan (Himachal Pradesh High Court, 2009) [Citing Jumma Masjid]
  22. Syed Bhasheer Ahamed & Others v. State Of Karnataka* (Karnataka High Court, 1993) [ILR 1994 KAR 159, referring to the Full Bench decision]
  23. SRI K S ESWARAIAH v. STATE OF KARNATAKA (Karnataka High Court, 2018)
  24. K. Selvarasi v. K. Kaliappan (Madras High Court, 2017) [Citing Renu Devi and N.Venkateshappa]