Doctrine of Feeding the Grant by Estoppel

This general rule states that no property may be transferred by anyone who is not authorized to do so. As a result, if a person lacks title to property, he cannot validly transfer it to another. Even so, due to the "adjustment of equities" between such an individual and the transferee, this requirement has been modified in fact. One of the exceptions to this provision is stated in Section 43 of the Transfer of Property Act.

What does Doctrine of Feeding the Grant by Estoppel Exactly Define?

The doctrine of feeding the grant by estoppel is based on the maxim "nemo dat quod nonhabet," which means that no one can give to another what he does not have himself. Section 43 of the Transfer of Property Act lays down that "where 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."

Transfer from an unauthorized individual - Feeding the grant of estoppel

A person who has no interest in or power over a property is not authorized to transfer it. If he does, the transfer will be considered to have been made by an unauthorized person. When he acquires that property, he cannot deny transferring it to the person who he erroneously or fraudulently told that he would transfer that property to him, because the former will be prevented from retracting his previously made statement, and now that he has obtained that property, he must transfer it to the person to whom he promised to transfer that property. Section 43 is based on two guiding principles −

• English Common Law of Estoppel

• Principle of Equity, which states that when a person promises to fulfil a thing beyond his capacity, he must do it when he gets the ability.

Estoppel is a rule of evidence that prevents a person from rejecting a statement he makes when that statement is used against him. Even so, the Transfer of Property Act depicts the relationship between the transferor (both before and after acquiring the right to transfer) and the transferee for value without providing any notice.

Essential Elements

Elements of the doctrine of feeding the grant by estoppel are as follows −

Fraudulent or erroneous representation of ownership

The transferor must make a dishonest or erroneous representation of being the actual owner or having the power to transfer in order for this theory to apply. It makes no difference if it was done with good intentions. All that is required is that a false representation was made and the transferee relied on it.

Transfer of consideration

It is important for the application of this theory that the transfer of property was done with some thought, i.e., it had some value. That is not done when the transfer is made without consideration.

Option of the Transferee

At the transferee's option, the property is transferred. In the application of this concept, the transferee determines the validity of a contract, and when the transferee makes the transfer valid, the transferor's title becomes perfect.

Subsisting contract of transfer

The transfer contract must still exist in order for this theory to be applied. If the transferee cancels or terminates the contract, the relationship between the transferor and transferee is ended, and no claims can be brought against the property.

Feeding Grant by Estoppel

According to English law, the transferee receives the benefit of any subsequent acquisition automatically. It is based on the concept that if a person promises more than he can give, he must deliver the same when he gains the capacity to perform.

A feeding grant by estoppel is a grant made by an incompetent person who convinces the other that he is competent. When the incapacity is gone, the estoppel is fed, and he is barred from claiming incompetency at the time of initial transfer.

Rights of the Second Transferee

The rights of a second transferee are provided as a proviso in the section's second paragraph. It is in the interest of the bona fide second transferee for value, without notification of the "option" of the first transferee. Where the second transferee (1) acts in good faith, (2) pays consideration, (3) receives no notice of the option, and (4) accepts the transfer before the option may be exercised, his claim is unaffected by the first transferee's claim under Section 43. If such conditions exist, the property will be transferred to the second transferee instead of the first transferee.

Invalid Transfers

The transfer under Section 43 will be invalid if it is prohibited by law, such as if it is against public policy or is performed by a minor. This section is only intended to cure the transferor's lack of title at the moment of transfer. If the transfer is void from the start, the section cannot be applied even if the transferor later obtains the property. As a result, if the transferor is a minor at the time he falsely promises to transfer the property, the transferee cannot use this provision even after the minor gets the property and reaches the age of majority. Therefore, if the property is non-transferable under Section 6, it cannot be validated using Section 43.

Section 43 does not require the transferee to use care and act in good faith in determining whether his transferor has the authorization to transfer. Even if such were the case, there is no evidence that the transferee knew of the transferor's lack of interest in the property.

Exceptions to Section 43 of the TPA, 1882

Section 43 does not apply in the following circumstances −

• Cases in which no consideration is given

• If both parties were aware of the exact state of affairs about the transfer

• Execution sales

• If the transferee is not misled by the false or erroneous representation of the transferor,

• Gifts

• Transfers are not transferrable under the law.

Case Law

Muhammad Hayat v. Abdul Rahim, MLD 1524, 2001

The transfer contemplated by Section 43 of the TPA, 1882, must be the result of a dishonest or erroneous misrepresentation. Otherwise, this part will be inapplicable.

Omar Ali Sheikh v. Shamsul Alam Mridha and Others, 55 DLR 257

If a person holds a partial interest in a property and transfers the largest interest for value, the transferee is entitled to the interest thus obtained following a later purchase.

Conclusion

Section 43 doctrine is based on the equitable concept that if a person promises more than he can do, he must keep the commitment when he gains the ability to do so. According to Section 115 of the Indian Evidence Act, the rule that applies in India is the rule that equity has extended. Because the equitable law of estoppel requires a man to make his representation good, the transferor cannot deny his earlier grant if he professes to transfer.

Frequently Asked Questions (FAQ)

Q1. What is the difference between Section 6A and Section 43 of the Transfer of Property Act?

Ans. Section 6(a) enacts a rule of substantive law, whereas Section 43 contains a rule of estoppel. The theory of spec successionis applies equally to movable and immovable properties, but the rule of estoppel under Section 43 applies solely in the case of the transfer of immovable property.

Q2. What is meant by "feeding the grant" in estoppel section 43?

Ans. Section 43 obviously applies if a person transfers property to which he has no title on the representation that he has a present and transferable interest, and the transferee acts on this representation.

Q3. How do you distinguish between spes successionis and the doctrine of feeding the grant by estoppel?

Ans. The doctrine of spec successionis applies both to movable and immovable properties, but the rule of estoppel under Section 43 applies solely in the case of the transfer of immovable property. Section 43 only applies in cases where the transfer is for consideration.