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Zungabai Bhawani Vs. Bhawani Appaji - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMumbai
Decided On
Case NumberSecond Appeal No. 607 of 1905
Judge
Reported in(1907)9BOMLR388
AppellantZungabai Bhawani
RespondentBhawani Appaji
Excerpt:
.....notice, limits of the doctrine of. ;no purchaser can protect himself against the claim of a real owner merely by-saying that he had no notice of the real owner's title. a purchaser is not justified in shutting his eyes and buying recklessly from a vendor without any inquiry and resisting the real owner on the ground that the real owner did not come forward. he must make some reasonable inquiry into title before he can take advantage of the doctrine of purchaser for value without notice which could protect him against an andiscovcrable and hidden equitable interest. when he has taken reasonable care to ascertain his vendor's title then no doubt if there is an equitable interest of which he could by such reasonable care discover no trace, the doctrine of purchaser for value without..........been improperly applied in this instance. no purchaser can protect himself against the claim of a real owner merely by saying that he had no notice of the real owner's title. a purchaser is not justified in shutting his eyes and buying recklessly from a vendor without any inquiry and resisting the real owner on the ground that the real owner did not come forward. he must make some reasonable inquiry into title before he can take advantage of the doctrine of purchaser for value without notice which could protect him against an undiscoverable and hidden equitable interest. when he has taken reasonable care to ascertain his vendor's title then no doubt if there is an equitable interest of which he could by such reasonable care discover no trace, the doctrine of purchaser for value without.....
Judgment:

Batty, J.

1. Both the lower Courts have found that the person from whom the second defendant purchased had no beneficial interest in the property sold, but was a trustee or ostensible owner only.

2. The Court of first in stance held that the plaintiff, who was beneficially interested, was not estopped from recovering the land from the purchaser. The lower appellate Court has reversed the decree of the Court of first instance on the ground that the 2nd defendant was a purchaser for value without notice and that the plaintiff must have known of the transaction entered into between her trustee or the ostensible owner and the second defendant. The doctrine of purchaser for value without notice has, we think, been improperly applied in this instance. No purchaser can protect himself against the claim of a real owner merely by saying that he had no notice of the real owner's title. A purchaser is not justified in shutting his eyes and buying recklessly from a vendor without any inquiry and resisting the real owner on the ground that the real owner did not come forward. He must make some reasonable inquiry into title before he can take advantage of the doctrine of purchaser for value without notice which could protect him against an undiscoverable and hidden equitable interest. When he has taken reasonable care to ascertain his vendor's title then no doubt if there is an equitable interest of which he could by such reasonable care discover no trace, the doctrine of purchaser for value without notice may stand him in good stead.

3. Then it is urged that in this case the plaintiff could not succeed, because she had put forward an ostensible owner, defendant 1, as the real owner and the Privy Council case of Ramcoomar v. John (1872) 11 Beng. L.R. 46, P.C. has boon cited to us as governing this case. But it will suffice for the present purpose to observe that defendant 1 assumed the character of ostensible owner, not owing to any action on the part of the plaintiff, but as a trustee whom the lower Courts held, acting probably in the spirit of Section 81 of the Trust Act, had been constituted trustee by the plaintiff's father. The plaintiff would not be estopped on the ground that she had induced second defendant to purchase, unless it could be shown that the second defendant when purchasing, was aware that the plaintiff had acquiesced with full knowledge. No doubt if the second defendant had shown that the plaintiff had been acting in collusion with her trustee, the ostensible owner defendant 1, in effecting this sale, that would have been a very excellent defence, for in that case the plaintiff could not be allowed to take advantage of her own fraud. But such a fraud would have to be affirmatively established and the second defendant has no right to say, when asked, if he has made reasonable inquiries,-''No, I dispensed with that, but I suspect that the real owner was acting in collusion'-that is to say, he cannot be relieved from the duty of making reasonable enquiry by putting forward a mere suspicion of fraud on the other side. The effect of allowing him to do so would be to shift on to the real owner the onus, instead of sustaining in the first instance the onus which lies on the purchaser of another's property, to show that the purchaser acted with reasonable care. Reasonable care is to be expected from every one who claims to have purchased free from a really existing right, equitable or legal and when the purchaser has tailed to exercise it he cannot claim that the real owner should be called on to prove his good faith and innocence instead. We therefore think that this case must be remanded to the lower Court in order that it may be dealt with in accordance with the principles we have above laid down-It is open to the defendant to show that he took reasonable care to ascertain that his transferor, the first defendant, had power to make the transfer and that the second defendant himself acted in good faith, that is to say, with due care and attention and having so acted, discovered nothing which would put him on further enquiry. It is also open to the defendant in such case to show that by the action of the real owner or beneficiary, he was induced to believe and intentionally induced to believe that the transferor had the power which he purported to exercise. In that case Section 115, Evidence Act, denning estoppel, would protect the purchaser against the plaintiff's claims. But he cannot set up, as dispensing with the necessity for reasonable care on his part, a mere suspicion, so as to shift on to the real owner the onus of showing perfect good faith on the real owner's part. It is a question of fact, whether reasonable care required of the plaintiff, would have put him or did put him on further enquiry.

4. We reverse the decree of the lower appellate Court and remand the case that it may be dealt with in accordance with the above remarks and in accordance with law.

5. No further evidence to be taken. Costs to abide the result.


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