All India Bar Examination (AIBE) 3-III Previous Year Question Papers with Answers

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76.

A, a Hindu, has separated from his father B. A sells to to C three fields. D, E, and F. A represents to C that he is authorised to do so. Of these fields, F does not belong to A. F was retained by B during partition of the family property. Subsequently, B dies and A receives the property as B's heir. Which of the following statements is the most accurate application of the principle set out below?


Principle :

Section 43 of the Transfer of Property Act, 1882, stipulates that where fraudulently or a person erroneously represents that such person is authorized to transfer certain immoveable 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.

A: C, not having rescinded the contract of sale, may require A to deliver F to him.
B: A can transfer the property to another bona fide transferee without informing C.
C: The benefit of Section 43 is not available to C, as he was not misled into believing that A had the power to transfer F.
D: C is a gratuitous transferee in respect of F, and therefore cannot shall the benefit of Section 43
E: Since the contract to sell F was void ab inito and has expired, C cannot exercise the right under Section 43

The answer is: A

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Explanation

The correct option is A: C, not having rescinded the contract of sale, may require A to deliver F to him.

Explanation:

According to Section 43 of the Transfer of Property Act, 1882, if a person fraudulently or erroneously represents that he is authorized 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.

In this case, A, a Hindu who has separated from his father B, sells to C three fields, D, E, and F, representing that A is authorized to transfer the same. Of these fields, F does not belong to A, it having been retained by B on the partition; but on B’s dying A as heir obtains F. C, not having rescinded the contract of sale, may require A to deliver F to him.

This is because A erroneously represented that he was authorized to transfer F, which he did not own at the time of sale. However, he later acquired F as an heir of B. Therefore, C can exercise his option under Section 43 and claim F from A. The contract of sale subsists until C rescinds it or accepts the performance of it.

The other options are incorrect because:

Option B is incorrect because A cannot transfer F to another bona fide transferee without informing C. This would amount to a breach of contract and fraud on C's part. C has a right to enforce the transfer of F from A under Section 43.

Option C is incorrect because the benefit of Section 43 is available to C, as he was misled into believing that A had the power to transfer F. The section does not require that the transferee should be deceived by the transferor's representation. It is enough that the transferor made a false representation and professed to transfer the property for consideration.

Option D is incorrect because C is not a gratuitous transferee in respect of F, but a valuable transferee. He paid consideration for the three fields, including F. The section applies only to transfers for consideration and not to gifts or other gratuitous transfers.

Option E is incorrect because the contract to sell F was not void ab initio, but voidable at C's option. The section makes it clear that the transfer shall operate on any interest which the transferor may acquire in such property at any time during which the contract of transfer subsists. Therefore, C can exercise his right under Section 43 even after A acquires F.