Law: Transfer of Property Act (IV of 1882)

Section: 41

  Transfer of Property Act (IV of 1882) S. 41-Purchaser for value-To act in good faith and with reasonable care-Purchaser not ascertaining real facts about title deeds of disputed property and entrusting inquiry into title of property to broker-Held: Cannot be said to have acted in good faith and with reasonable care to avail of protection of S. 41. It was contended that the purchaser of the disputed property (house) being a woman had to depend upon her broker who had ascertained that the property carried no encumbrance after making enquiries from Revenue record and as such she was entitled to protection under section 41 of the Transfer of Property Act, 1882 against the claim of the mortgagee bank with which the disputed house was stated to have been pledged by deposit of title deeds. Held : A purchaser of property cannot be said to have acted in good faith and with reasonable care simply because he entrust ed the enquiry into the title of property to a trusted person and completed the transaction after he was told that everything was right. The position of the property brokers in our country is much worse than the solicitors who are educated in law and are trained technicians for the purposes of finding out the defects in the title of a property. The entrustment of such an enquiry to a lay broker whose only interest is to collect his commission from the bargain will not amount to acting in good faith and with reason able care. The words `reasonable care' under section 41 of the Transfer of Property Act mean such care as an ordinary man of prudence would take. In dealing with the real property regard is had to the usual course of business and a purchaser who wilfully departs from it is not entitled to derive any advantage of the section. The ordinary standard of care and diligence that would constitute reasonable care for the purposes of ascertaining the power of transferor would be to enquire about his title to the property and in cases relating to urban immovable property where the Registration Act is applicable and the offices of Sub-Registrars of documents exist the first requirement will be to enquire about the existence of title deed and to…