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Estoppel by Deed: in Writing", Is Known, Nowadays, As Estoppel by Deed. It Is A Rule, That, A Person Is Not
Estoppel by Deed: in Writing", Is Known, Nowadays, As Estoppel by Deed. It Is A Rule, That, A Person Is Not
Estoppel by Deed
One of the three kinds of estoppel, stated by Lord Coke as “estoppel by matter
in writing”, is known, nowadays, as estoppel by deed. It is a rule, that, a person is not
allowed to deny a statement of fact that he has made in a deed, nor is he allowed to
deny the validity of a property right that one has granted by deed. 995 Deeds, in former
times, were documents which had to be given effect under seal. The formality of seal
is not required in modern times, however, a deed is, generally, said to be validly
executed by an individual if it is signed by him in the presence of a witness or
witnesses who attest the signatures of parties upon such deeds. 996 Deeds are construed
in the same way as other documents save that where one party wishes to deny the
truth of a statement in the deed it may be estopped (prevented) from doing so by the
application of a rule known as estoppel by deed. 997 Estoppel by deed is based on the
principle that when a person has entered into a solemn engagement by a deed under
his hand and seal as to certain facts, he shall not be allowed or permitted to deny any
matter which he has so asserted.998 According to Halsbury‘s Laws of England,
995
Jonathan Michie,(ed.), Reader‟s Guide to the Social Sciences,(Fitzroy Dearborn, Chicago,2001)
available at
https://books.google.co.in/books?id=ip_IAgAAQBAJ&pg=PA499&lpg=PA499&dq=estoppel+by
+matter+of+writing&source (last accessed on 22nd September 2016)
996
Stephen Furst & Vivian Ramsey,Keating on Construction of Contracts,45(Sweet &
Maxwell,London,9th edition.(2012) Available at: book.google.co.in/books (last accessed on 13th
Nov. 2015)
997
Id.,at 89
998
Parma Nand v. Champa Lal, AIR 1956 All 225 at Para. 9
999
Halsbury‘s Laws of England ,volume 16(2): ―Estoppel‖,Paragraph 1052,(4th edition)
1000
Melville M Bigelow, A treatise on the Law of estoppel and its application in Practice” (Little,
Brown and Co,Boston,2ndedn,1876) available at (http://books.google.co.in/ books/ download/A_
185
Blackstone, in ―Commentaries on Law of England‖ has stated that ―a party to a
deed in most cases estopped or precluded from controverting any statement therein or
to show that it was executed with a diferent intent, or objects to which the deed itself
imports, except indeed, in cases of duress, fraud or illegality which defences the law
admits.‖1001 Recently, S. Vimala, J. of Madras High Court in Methavathy v.
Punyakodi,1002 defined the doctrine of estoppel by deed in following words:
In the above stated case, the court held that where the defendant has executed
the sale deed in favour of plaintiff, he will be estopped from contending that the
plaintiff is not the owner of the said land. 1004 In the present chapter, an attempt is
made to study various aspects of the doctrine of ―estoppel by deed‖ and its application
in various branches of law especially in India.
186
century.1006In this period, the basis of estoppel by record and estoppel by deed was
same. It was considered that a deed produced an estoppel, because, like a record, it
amounted to proof. Similar rules were applied to both kinds of estoppel. Thus, as
there could be no estoppel by record unless the court from which the record emanated
had jurisdiction, so the deed must be valid and operative in order to work as an
estoppel.1007However, with the passage of time, difference between a deed and record,
necessarily, gave rise to some differences in the mode in which the doctrine of
estoppel was applied. In the year 1584 it was held that though the parties might be
estopped by the deed, the jury is not bound. 1008 In the later centuries, the accepted
basis of estoppel by deed, like estoppel in pais was that the man‘s own act or
acceptance stopped or closed his mouth to allege or plead the truth. Thus, estoppel by
deed established itself on a basis totally different from that of estoppel by record.1009
1006
Ibid
1007
Id.,at 155
1008
Id.,at 157, Goddard‟s Case, (1584) 2 Co. Rep 40
1009
Id.,at 158
1010
Ibid., In Rawlyn‟s Case, reported by Coke in (1588) 4 Co. Rep 52a, it was held that if a person
makes a deed of lease of premises to which he has no title and afterwards acquires the title
during the term, he will not be admitted to deny that his lessee had a good title to the same.
1011
Ibid.
1012
Transfer of Property Act, 1882 Section 43 discussed in details later in this chapter.
187
Transfer of Property Act, 1882.1013 Apart from property law, the doctrine of estopped
by deed in embodied several enactments in India which are discussed in this
chapter1014
The principle of estoppel by deed is also founded upon the public policy,
whereby, any party to the contract is hindered from defrauding the other or to resile
from assertions made by one and accepted by the other. The principle is, that, if a
distinct statement of facts is made in recital of an instrument, and a contract is made
with respect to that recital, the statement of fact contained in the recital would bind
the parties to that instrument and if an action is brought upon it, it would not be
1015
competent for the contracting parties to deny the recital. There are few rules of law
that are better established or are of greater antiquity than the one which has firmly
settled the question, that a man may irrevocably bind himself, by putting a seal to a
grant or a covenant or that he will not be allowed to disprove or contradict any
declaration or averment contained in an instrument.1016In Martin Cashin v. Peter
Cashin,1017 Judicial Committee stated the basis of the rule of estoppel by deed in the
following words.
In a case, where the person executing the deed is neither blind nor
illiterate, where no fraudulent misrepresentation is made to him, where
he has ample opportunity of reading the deed and such knowledge of
its purport that the plea of non est factum is not open to him, it is quite
immaterial whether he reads the deed or not. He is bound by the deed
because it operates as a conclusive bar against him, not because he has
read it or understands it, but because he has chosen to execute it. This
is equally true(apart from fraud) in equity as at law, except in those
1013
Seth Parmanand v. Champa Lal, AIR 1956 All 225 : (1956) All LJ 1 at Para. 10, Page. 3
1014
Negotiable Instruments Act, 1882, Indian Evidence Act,1872
1015
A.K Ganguly, ―Principles of Estoppel and Ultra Virus in Their Application to the Discharge of
Public Duties by Public Authorities‖ 41, Journal of Indian Law Institute, 335 (1999)
1016
Henry M. Herman, The Law of Estoppel, 232,(Albony W.C Little and Company, Washington
D.C, 1876) Available at :https://archive.org/details/lawofestoppel00herm. ( last accessed on 22nd
January 2016)
1017
AIR 1938 P.C 103
188
special cases wherein there is an equitable ground for setting aside or
rectifying the deed.1018
In the above stated case, the facts were, that a person made gift of certain
bonds in favour of his wife and also made certain bequeaths in favour of his sons by
way of will. After his death, Government claimed death duty upon the bonds. The
sons, including respondents, entered into a release deed with their mother, wherein
they gave up their claim on bonds upon the conditions that their mother will be liable
to pay the death duty upon the bonds and to satisfy legacies from the remaining
property. The mother fulfilled her obligations under the deed. After some years, the
respondent sought to challenge the deed upon the ground that the release deed was
family arrangement and hence contract of ubberrima fides(of utmost good faith)
wherein the appellant was under a duty to disclose all material facts which they have
failed. Rejecting the contention, the Judicial Committee of Privy Council observed
that there was not any fraud, misrepresentation or undue influence at the time of
execution of deed and therefore the deed could not be avoided by the respondents. 1019
The plea of estoppel by deed may be waived. In order to plead estoppel by deed
it is necessary that the party to an agreement, who seeks to rely on the plea of
estoppel, must not join issues of fact rather rely on the plea of estoppel. In His
Holiness Digya Darshan Rajendra Ram Doss v. Devendra Doss,1020 the question
related to the succession of office of Mohunt of a Tirupati Mutt. The immemorial
custom required that Mohunt should be North-Indian Brahmin. There was an
agreement between predecessors of parties by the terms of which appellant had been
acknowledged as North-Indian Brahmin. There was another agreement to the same
effect between the parties. Mukherjia. J, delivering Judgement for three Judge Bench
of Supreme Court, agreed with the Appellant‘s contention that recital raised clear plea
of estoppel in appellant‘s favour, but he could not take the benefit of plea of estoppel
as instead of relying on the plea he had joined issues with respondents at trial court as
well as at High Court.1021 The Court observed:
If the estoppel appears on the record and the party who is entitled to
take the advantage of it, instead of relying on it, goes to the issue on the
1018
Id.,at Page. 109
1019
Id.,at Para. 13, Page. 110
1020
AIR 1973 SC 268: (1973) 1 SCC 14
1021
Id.,at Para. 4, Page. 17
189
fact, he puts the matter at large and the jury may disregard the
estoppel.1022
The consent for compromise was given by the father of the plaintiff,
who was one of the signatories to the compromise deed, and once the
consent having been given cannot be challenged by his successors or
withdrawn unless the same has been obtained by fraud and/or is
contrary to law.1025
The executant of deed cannot raise the contention that the deed was a mere
formality and it has no statutory basis and hence not binding on him. In Union of
India v. Maharastra State Electricity Board ,1026 the respondent was consignee, who,
suspecting, that the goods send by the consignor through railway of appellant were
damaged, demanded open delivery of the consignment to which the representatives of
railways agreed. A certificate of ―short supply‖ was jointly prepared by railways and
the respondent and duly signed by representatives of railways. 1027 The High Court,
after taking note of these facts, held:
1022
Ibid.
1023
(2003) 12 SCC 436
1024
Id.,at Para. 23, Page 446
1025
Id.,at Para. 26, Page 447
1026
(2010) 7 Mh.L.J 609
1027
Id.,at Para. 7, Page 611
190
railways cannot be allowed to question the certificate or resile
therefrom, by virtue of the principle of estoppel by deed.1028
Deeds are conventionally divided into various sections or parts, all of which
may give rise to an estoppel by deed. Recitals follow the introduction to the deed and
usually begin with the word ‗WHEREAS‘. They are generally used to explain or
narrate the factual background and purposes of the deed. 1029 The expression ―recitals‖
means statements in a deed, agreement or other formal instrument, introduced to
explain or lead up to the operative part of the instrument. Recitals are further divided
into narrative recitals which set forth the facts on which the instrument is based and
introductory recitals which explain the motive for the operative part. 1030
1028
Ibid.
1029
Sean Wiken and Theresa Villers,Waiver Variation and Estoppel, 217(John Wiley & Sons
Ltd,West Sussex England,1998)
1030
Ram Charan Das v. Girijanandini Devi, AIR 1966 SC 323 at Para. 9, Page. 327
1031
Ibid.
1032
Greer v. Kettle, [1988] HL 156 at 170
1033
AIR 1990 Ker 226
191
adumbrated in the document operates as an estoppel in favour of the
parties. 1034
The operative part of the deed follows the recitals and is usually introduced
with the words ‗NOW THIS DEED WITNESSETH AS FOLLOWS‘. This section of
the deed contains the provisions accompanying the purpose of the instrument, such as
the promises which go to make-up the relevant contract or transaction. 1035 In Taylors
Fashions Ltd v. Liverpool Victoria Trusts Ltd,1036 Mr. Justice Oliver held:
Normally, estoppel by deed arises from recitals, but that is not essential
feature of this rule. Estoppel may arise by a clear and distinct averment
in operative part.1037
Section 117 of the Indian Evidence Act, 1872,1038 deals with a particular kind
of estoppel by deed.1039This section deals with three instances of estoppel by
agreement, namely (i) against the acceptor of a bill of exchange, (ii) against a bailee,
and (iii) against a licensee. In all the three cases, there is an express or implied
agreement which forms the basis of the relationship created by the parties. 1040
The provision of law, contained in Section 117 of Indian Evidence Act, 1872,
estops the acceptor of bill of exchange, bailee, and licensee to deny the title of persons
from whom they have derived their rights over bill of exchange, or other property.
The latter half of this section relates to estoppel of bailee or licensee. In particular,
estoppel against bailee has great utility. 1041 A bailee will be estopped to plead his own
title against the bailor, and if he claims upon the title of a third person, he will be
1034
Id.,at Para. 40, Page. 236
1035
Sean Wiken and Theresa Villers,Waiver Variation and Estoppel, 217(John Wiley & Sons
Ltd,West Sussex England,1998)
1036
(1981) WLR 576
1037
Id.at 600
1038
―117. Estoppel of acceptor of bill of exchange, bailee or licensee. --- No acceptor of a bill of
exchange shall be permitted to deny that the drawer had authority to draw such bill or to endorse
it; nor shall any bailee or licensee be permitted to deny that his bailor or licensor had at the time
when the bailment or license commenced, authority to make such bailment or grant such
license.‖1038
1039
Per Seshagiri Aiyar, J, In Venkata Chetty v. Aiyanna Goundan, AIR 1917 Mad 789: (1917) 5
LW 307 at 316
1040
Law Commission of India, 69th Report on Indian Evidence Act,1872 (May 1977) at Para. 59.1
1041
Law Commission of India, 69th Report on Indian Evidence Act,1872 (May 1977) at Para. 59.6
192
bound to categorically assert and prove such title. In Rogers, Sons & Co. v. Lambert
& Co. 1042 the Court of Appeal held that the bailee of goods cannot avail himself of the
title of third person to the goods as a defence to an action of detenue by the bailor
except by further showing that he is defending the action on behalf and by the
authority of such third person.1043 In this case, the plaintiff purchased certain goods
from defendants and paid the price. Under an ordinary warehousing agreement, the
goods were kept with defendants. The plaintiffs sold the goods to third party before
they made delivering orders to defendants for supply of goods to them. The
defendants refused to deliver possession, not mentioning the title of third party but on
their own right. Lord Esher observed, that a bailee can set up the title of another only
if he defends upon the right and title and by the authority of that person. He must
allege that title and prove it. 1044 Their Lordship further held:
Indeed, the defendants have said in deliberate terms that they are not
defending the action for anyone else, but are defending for themselves
only. As between plaintiff and defendants, the defendants have no
title.1045
1042
(1891) 1 QBD 318
1043
Id.,at 325
1044
Ibid.
1045
Id.,at 326
1046
AIR 1964 Cal 374
1047
Id.,at Para. 9, Page. 377
193
article 117 of the Indian Evidence Act, 1872 and the finding of the learned trial court
cannot be assailed.1048
The doctrine of estoppel against bailee and licensee has been resorted to
preclude his plea of adverse possession against the person putting them in possession.
In Balram Chunnilal v. Durgalal Shivnarain,1049 the pujari (priest) of the temple was
given possession of the temple, from generation to generation, for the purpose of
worship etc. by the as panchas of the village. In a suit for eviction by panchas on
ground of mismanagement, they sought to raise the plea of adverse possession against
the panchas. The Court after examining the relationship between the parties
concluded that the pujaries were merely licensee appointed by the panchas who were
trustees on behalf of Idol of the temple, therefore, Section 117 of the Indian Evidence
Act, 1872 will apply and the pujaris will be estopped to deny title of Panchas. Justice
Krishnan Speaking for Division Bench of Madya Pradesh High Court, held, that heirs
of pujaries cannot claim adverse possession. 1050 He further observed:
The rule that acceptor of bill or exchange, bailee or licensee will be estopped
from denying the authority or the person, from whom they have obtained their rights,
is subject to some exceptions. The acceptor of a bill or exchange may deny that the
bill was really drawn by the person by whom it purports to have been drawn.1052 If a
bailee delivers the goods bailed to a person other than the bailor, he may prove that
such person had the right to them as against the bailor. 1053 Thus, the researcher
submits that the law is well settled that licensees and bailees, like a tenant, cannot
1048
Ibid.
1049
AIR 1968 MP 81
1050
Id.,at Para. 15, Page. 84
1051
Id.,at Para. 12, Page. 84
1052
Explanation 1 of Section 117, The Indian Evidence Act, 1872
1053
Explanation 2 of Section 117, The Indian Evidence Act, 1872
194
deny the title of the person from whom they have obtained rights over the property.
The law of estoppel thus promotes justice and honesty in property law.
Mortgagor is not estopped to challenge the title of persons who claim to have
derived title from original mortgagee. In Basdeo Prasad v. Dwarika Pandey,1056 a suit
for redemption of mortgage was filed by persons claiming successors of original
mortgagors. The title of plaintiffs was challenged by defendant mortgagees. The
question before the court was, therefore, if the mortgagees will be estopped to
question the title of successors of mortgagee. Dawsaon Miller, C.J of Patna High
Court held, that in a suit for redemption, where plaintiffs are not original mortgagors,
but persons claiming to be entitled to share under the partition of a properties of
original mortgagors, the defendants are entitled to challenge the plaintiff‘s title as this
case is different from the cases where mortgagee sets up a paramount title as against
his original mortgagor.1057
1054
Debendra Nath Deb v. Mirza Abdul Samad, 1 Ind Cas 264. Available at
www.Indiankanoon.com/doc/494542 (last accessed on 17 October, 2016)
1055
Chokkalingam Chettiar v. Athappa Chettiar, (1927) 53 MLJ 364. Available at
www.Indiankanoo/doc/1316363 (last accessed on 17th October, 2016)
1056
(1923) ILR 2 Pat. 805
1057
Id., at 807
1058
AIR 1929 All 305
195
and re-enters under a different status‖1059 A coparcener is not estopped to question a
mortgage entered into by mortgagee on the ground that the mortgagee was not for
family necessity provided that he was not party to such mortgage.1060
Estoppel by deed may arise against granter or landlord who had no title at the
time when the grant was made. If the granter acquires title after the defective grant,
the estoppel is said to be fed and estate by estoppel is converted into an estate in
interest. The grantee, thereby, acquires genuine title as soon as granter obtains it.
There is no need for the granter to execute a fresh conveyance. Once the estoppel is
fed the grantee‘s title is as effective as if it had been granted in the orthodox
manner.1061 In case, where there is an express recital of title, the granter will be
estopped from denying that he had the particular legal title averred. Consequently, the
grantee‘s title will be fed on the acquisition of sufficient title by the granter, whether
or not the grantor had some lessor legal estate at the time of the grant. Where there is
no express recital, the granter will be estopped only from denying that he had some
1062
form of legal title. Under the Common Law, a man who sells property which does
not belong to him, and afterwards acquires title as enables him either wholly or
partially to perform the contract, he is bound to do so, and the subsequently acquired
estate feeds the estoppel which arises out of the vendor‘s covenant for title, express or
implied.1063
The English doctrine of ―feeding grant by estoppel‖ has been explained Privy
Council in Rajapakse v. Fernando.1064 In this case, one Thomas Carry acquired
certain lands in grant from the Crown. He became legally entitled to the land on
February 22, 1912. Prior to this, he had conveyed the same land to the predecessors of
respondent by the deed executed on December 11, 1909. Their Lordship held that the
benefit of subsequent acquisition of title by Thomas Carry will go to respondent‘s
1059
Id.,at Para. 3, Page. 306
1060
M.Monir,Law of Evidence,2214(Universal, Delhi 15th Edition, 2012)
1061
Sean Wiken and Theresa Villers,Waiver Variation and Estoppel, 238(John Wiley & Sons
Ltd,West Sussex,1998)
1062
Id.,at 239
1063
Johari v. Dropadi, (1997) MP.L.J 217 at Para. 10, Page. 223
1064
(1920) AC 892
196
predecessor.1065 While considering the application of English doctrine of feeding
grant by estoppel, Judicial Committee of the Privy Council observed:
The principle of feeding grant by estoppel has statutory basis in India under
Section 43 of the Transfer of Property Act, 1882 which embodies the rule of estoppel
1065
Id., at 897
1066
Ibid.
1067
Abdul Kabir v. Mt. Jamila khatoon, AIR 1951 Patna 315 at Para. 6
1068
(1862) 10 H.L.C 191
1069
Id., at 196
1070
AIR 1921 P.C 112
1071
Id.,at Para. 31
197
by deed. This section enables the transferee to whom a transfer is made on fraudulent
or erroneous representation to lay hold at his option of any interest which the
transferor may subsequently acquire in the property provided by doing so he does not
adversely affect the right of any subsequent purchaser for value without notice. 1072 It
is immaterial whether the transferor acts bona fide or fraudulently in making the
representation, common law rule of estoppel by deed known as ―feeding the estoppel‖
comes into play in as much as the subsequent estate passes to the transferee, without
any further act of the transferor.1073 Section 43 of the Transfer of Property Act, 1882
reads as follows:-
The section, in its terms, clearly applies whenever a person transfers property
to which he has no title on a representation that he has a present and transferable
interest therein, and acting on that representation, the transferee takes a transfer for
consideration. 1075 When these conditions are satisfied, the section enacts that if the
transferor subsequently acquires the property, the transferee becomes entitled to it, if
the transfer has not, meantime, been thrown up or cancelled and is been subsisting1076
There is an exception under section 43 of the Transfer of Property Act, 1882 in favour
of transferees for consideration in good faith and without notice of the rights under the
1072
Ram Bhawan Singh v. Jagdish, (1990) 4 SCC 309 at Para 10, Page. 313
1073
Johari v. Dropadi, (1997) MP.L.J 217 at Para. 10, Page. 223
1074
Transfer of Property Act, 1882, Section 43
1075
Jumma Masjid, Mercara v. Kodimaniandra, AIR 1962 SC 84 at Para 7, Page. 89
1076
Ibid.
198
prior transfer. But apart from that the section is absolute and unqualified in its
operation.1077
The rule of feeding grant by estoppel is also known as the ―rule of estoppel by
deed by transferor.”1078 In order to claim the benefit of doctrine of estoppel by
feeding the grant by estoppel under Section 43 of the Transfer of Property Act, 1882
the claimant, in his case, will have to establish following conditions:1079
(a) That the transferor, who makes or made the transfer of the
property, had no title in the property at the time of making the
transfer.
(b) That the transferor represents or did represent to the transferee that
he is the person who has got the transferable interest or title to the
property.
(c) That the transferee acts on the representations of the transferor, and
believing on the representations of the transferor, takes the transfer
for valuable consideration.1080
1077
Ibid.
1078
T. Ramareddy v. The Tehsildar Bangarpet Taluk, ILR (2000) KAR 1637, at Para. 8
1079
Ibid.
1080
Ibid.
1081
Jumma Masjid v. Kodimaniandra, 1962 SC 84 at Para. 7, Page. 86
199
applicable whether the defect in title of transferor arises by reason of his having no
title in the property or by reason of his having an interest therein being an expectant
heir.1082
Section 43 of the Transfer of Property Act, 1882 differs from English doctrine
of feeding estoppel by grant in some respects. Under Section 43 of the Act, the
transfer of subsequently acquired property takes place automatically as in the English
law. But, it takes place not at the moment when the interest is acquired but at the
moment transferee exercises its option that the interest shall stand transferred to him.
1086
Secondly, Indian law, as embodied in Section 43 of the Transfer of Property Act,
1882, unlike English law, does not apply the doctrine of feeding the estoppel so as to
1082
Ibid.
1083
Ram Pyare v. Ram Narayan, (1985) 2 SCC 162 at Para. 4, Page. 167
1084
Arnlayi v. Jagdeesiah, AIR 1964 Madras 122
1085
Id., at Para. 18, Page. 227
1086
Seth Parma Nand v. Champa Lal, AIR 1956 All 225 : (1956) All LJ 1 at Para. 15, Page. 4
200
impair the rights of subsequent transferees in good faith, for consideration, without
1087
notice of the existence of the option in the prior transferee.
The Doctrine of feeding estoppel had been applied by courts in India even
before enactment of Transfer of Property Act, 1882. In Krishna Chandra Ghose v.
Rasik Lal Khan,1088 Chowdhary and Newbound , JJ. of Calcutta High Court, applied
the equitable principle of feeding estoppel by grant with respect to a Patta (lease
deed) created at a time when Section 115 of the Evidence Act, 1872 or Section 43 of
the Transfer of Property Act,1882, were not enacted and applied the general rules of
equity as applicable in England. In this case, four ticca(temporary) tenants of certain
land having no right to grant a permanent sub-lease granted by a patta a permanent
sub-lease to the defendants‘s predecessor-in-interest in land held by them, and
subsequently, two of them gave up their tenancy and the other two obtained a
permanent interest by a settlement in the whole land. The plaintiff purchased the land
from the latter two tenants and sued for declaration of his title and recovery of
possession. The Court held that inasmuch as the plaintiff denied his title from two of
the granters, he was estopped from denying the validity of the permanent sub lease on
ground that at the time of the grant the grantors had no title to grant such sub lease.
1089
The Court further observed:
In Jan Mohammed v. Karm Chand, 1091 Privy Council considered the rights of
vendee in a situation when sale is made by part owner on representation as sole
owner, but, who, in fact subsequently acquires title as sole owner. In this case, the
1087
Ibid.
1088
AIR 1917 Calcutta 433
1089
Id.,at 433
1090
Id.,at 444
1091
AIR 1947 P.C 99
201
widow of a deceased Mohammedan was entitled to a share in the property of the
deceased but she sold the entire property on the representation that she was the sole
owner thereof; subsequently she inherited the share of her daughter in the property.
The Judicial Committee of the Privy Council, speaking through Lord Thankerton,
held that under the sale besides the share of widow the vendee could also claim the
share inherited by the widow from her daughter. 1092
The scope of Section 43 of the Transfer of Property Act, 1882 has been
considered by the Apex Court in a series of cases. In Jumma Masjid Mercara v.
Kodimaniandra,1093 Supreme Court held, that where the transferee knows the fact that
the transferor does not possess the title which he represents he has, then he cannot be
said to have acted on it while taking a transfer, and therefore, in such a situation
section 43 of the Transfer of Property, 1882 would have no application. 1094 In this
case, the respondent, who was heir apparent, sold to the appellant Masjid his would be
share in the suit property. When he became entitled to the property, the appellant
took the plea that he was protected under Section 6 (a) of the Transfer of Property
Act, 1882 which says that mere right to succeed in a property cannot be transferred.
Thus, the sole question for determination before Apex Court was, whether a transfer
of property for consideration made by a person who represents that he has present and
transferable interest therein, while, in fact, he has only a spec succession(mere right to
succeed), is within the protection of Section 43 of the Transfer of Property Act, 1882.
Justice Venkatarama, speaking for the Bench of four Judges of the Supreme Court
held:1095
But section 6(a) and section 43 relate to two different subjects and
there is no necessary conflict between them. Section 6(a) deals with
certain kinds of interests in property mentioned therein, and prohibits a
transfer simpliciter of those interests. Section 43 deals with
representations as to title made by a transferor who had no title at the
1092
Id.,at Para. 17, Page. 103
1093
AIR 1962 SC 84
1094
Id.,at Para. 15
1095
Id.,at Para. 9
202
time of transfer and provides that the transfer shall fasten itself to the
title which the transferor shall subsequently acquire.1096
In Ram Pyare v. Ram Narain,1097 Supreme Court reiterated that the knowledge
of transferee, and not the transferor, will determine the applicability or otherwise of
the doctrine of feeding grant by estoppel as laid down in Section 43 of the Transfer of
Property Act, 1882.1098 In this case, one Matbar Mal, who had Sirdari rights over the
disputed land, deposited an amount equal to ten times the land revenue payable on the
land in order to acquire bhumidari rights. He could, thus, acquire the rights under
Section 134 of the U.P Zamindari Abolition and Land Reform Act, 1950 as it then
stood. He sold the land on the same day the amount was deposited. The Court after
examining the relevant law reached the conclusion that Sirdar acquired Bhumidari
rights on the date of issue of certificate and not on the date of deposit of amount. The
Apex Court held that plaintiffs, who were sons of vendor Matbar Mal, will be
estopped to claim that the transfer was void as the vendor had not acquired title on the
date of transfer, and the provisions of Section 43 are clearly attracted in this case. 1099
The Apex Court has maintained the position that the doctrine of feeding grant by
estoppel does not apply if the transferee is not misled and knew the factum of lack of
title of transferor at the time of transfer. In Kartar Singh (Dead by Legal
Representatives) v. Smt. Harbans Kaur,1100 the respondent executed a deed of sale of
land in favour of appellant, on behalf of herself and her minor son. The fact, that part
of the land was owned by the minor son and she was executing sale deed on his
behalf, was mentioned in marginal note of the sale deed itself. The son, on attaining
majority, filed a suit for declaring the sale of his share by his mother as void, as she
was not competent to make such transfer. He got the decree but died before he could
execute it and the respondent; mother succeeded the Land as per provisions of Hindu
Succession Act, 1955. The appellant then claimed his right over the Land under
Section 43 of the Transfer of property Act, 1882. The Division Bench of the Apex
Court, in this case, concluded that the rule of estoppel by deed by the transferor or the
rule of feeding estoppel by grant as embodied in Section 43 of the Transfer of
1096
Ibid.
1097
AIR 1985 SC 694 : (1985) 2 SCC 162
1098
Id.,at Para. 4, Page. 166
1099
Ibid.
1100
(1994) 4 SCC 730
203
Property Act, 1882 would apply only when the transferee has been misled. Here, the
note in the sale deed had put the appellant on notice of the limited right of mother as
guardian, as a reasonable and prudent man the appellant was expected to inquire
whether on her own the mother as guardian of minor son is competent to alienate the
estate of the minor. If such acts were not done the first limb of Section 43 is not
satisfied.1101
1101
Id.,at Para. 7, Page. 734
1102
AIR 1962 SC 84
1103
AIR 1991 MP 340
1104
Id at Para. 12, Page. 344
204
erroneous or fraudulent misrepresentation and the transferee has acted
on it.1105
The contrary opinion was expressed by Supreme Court of India in Renu Devi
v. Mahendra Singh,1109 where the court applied the ―general principle‖ of feeding
estoppel by grant, to uphold the validity of a gift deed, despite acknowledging that
―Section 43 of the Transfer of Property Act, 1882 does not in terms apply to the facts
of present case.‖1110 In this case, a gift was made by donor, after the passing of
preliminary decree in his favour by the court in a partition suit. The title in property
did not vest in him at the time of transfer. The decree was challenged by certain
1105
Id.,at Para. 11, Page. 344
1106
AIR 1955 All 288
1107
Id.,at Para. 16
1108
Id.,at Para. 16
1109
(2003) 10 SCC 200
1110
Id.,at Para. 12, Page. 210
205
members of family who were not party to earlier suit. The donor‘s title to gifted
property was affirmed by final decree. The court held that the transfer was supported
by the doctrine of feeding estoppel by grant. 1111 Justice Lahoti, while delivering
judgement for Division Bench, observed:
In Jharu Ram Roy v. Kamjit Roy,1115 Supreme Court reiterated that the principle
of feeding estoppel by grant has no application where transferee had colluded with
transferor, and knew that transferor had no title at the time of transfer. In this case,
sale deed was executed by one son of the owner in favour of appellant during life time
of owner. In deeds of sale, transferor made stipulation regarding death of his father
(owner of property). After death of owner, another son filed suit for title, possession
and setting aside sale deeds. There was finding of first appellant Court, that the
appellant was party to the fraud, being aware of the fact that owner of the property
was alive at the time of execution of sale deed. Three Judge Bench of the Supreme
1111
Ibid.
1112
Ibid.
1113
(1990) 4 SCC 309
1114
Id.,at Para. 10, Page. 317
1115
(2009) 4 SCC 60
206
Court, dismissing the appeal of transferee, held that being aware of the fact that actual
owner was alive the appellant was party to the fraud and not victim thereof. Since
fraud vitiates all solemn acts, Section 43 of the Transfer of Property Act, 1882 will
not apply. 1116
1116
Id.,at Para. 11, Page. 63
1117
(2006) 4 SCC 214
1118
Id.,at Para. 48, Page. 226
1119
Ibid.
1120
(1985) 3 SCC 350
207
daughter. In this circumstances, the Division Bench of the Apex Court Speaking
through Justice R.B Mishra, held that appellant ―transferees would be entitled to
protection of Section 43 of the Transfer of Property Act which substantially amounts
to satisfying the principle of feeding the grant by estoppel‖ 1121
1121
Id., at Para. 13 Page 358
1122
(2015) 5 SCC 691
1123
Id.,at Para. 4, Page. 697
1124
Ibid.
208
The question whether it is necessary for transferee to expressly exercise the
option in order to estop transferee was considered by Kerala High Court in Gomathy
Ammal v. Rukmani Amma,1125 wherein, the Court held that when the other ingredients
prescribed under Section 43 of the Transfer of Property Act, 1882 are found to exist,
upon the acquisition by the transferor of any interest in the property professed to be
transferred,s there springs into existence an ―option‖ for the transferee to have the
transfer operate on such newly acquired interest.1126 The option accrues to the
transferee from terms of the section and not by anything that he has to do. Being an
option, it is open for the transferee, not to claim the benefit. However, there is no
specific form in which the option is required to be exercised and manifestation of will
by the transferee to have the transfer so operate may be deemed to be an exercise of
the option.1127
Thus, the researcher is of the view that the doctrine of feeding grant by
estoppel, as codified in Section 43 of the Transfer of Property Act, 1882, is a
significant doctrine of property law in India. This section enables transferee to whom
transfer is made on fraudulent or erroneous representation to lay hold at his option of
any interest which the transferor may subsequently acquire in the property, provided,
by doing so he does not adversely affect the right of any subsequent purchaser without
notice. 1128 Intention of transferor at the time of making the transfer is not material for
the application of this doctrine. However, it is necessary that transferee was misled by
the representation of transferor and there is no collusion between the transferor and
transferee. The courts in India, have applied ―general principle of feeding estoppel by
grant, in cases where section 43 of the Transfer of Property Act, 1882 is not in its
terms applicable.1129 Since the object of the doctrine is to protect bonafide transferees,
the doctrine has been held inapplicable in cases where there is fraud and collusion
between transferor and transferee. The doctrine of feeding estoppel has also not been
applied where the transfer was invalid for being in violation of law or for some reason
other than the fraud or misrepresentation of Transferor. The rights of bona fide
1130
transferees for considerations are not affected by application of the doctrine. The
1125
AIR 1967 Ker 58
1126
Id.,at 59
1127
Ibid.
1128
Ram Bhawan Singh v. Jagdish, (1990) 4 SCC 309 at Para. 10, Page. 314
1129
Renu Devi v. Mahendra Singh, (2003) 10 SCC 200
1130
Brahmvart Sanatan Dharam Mandal v. Prem Kumar,(1985) 3 SCC 350
209
doctrine of feeding estoppel by grant does not apply if the transaction was in violation
of express statutory provision or otherwise invalid. The doctrine is not applicable
where transferor, in fact, never got the title of property during his lifetime. Section 43
of the Transfer of Property, 1882 is broader in its effect than Section 115 of the Indian
Evidence Act, 1882 as it has the effect of vesting title in bona fide transferee for
value.
Generally, Courts have taken a very liberal and broad view of the validity of
the family settlement and have always tried to uphold and maintain it. The central
idea in the approach made by the court is that if by consent of parties a matter has
been settled, it should not be allowed to be re-opened by the parties to the agreement
on frivolous or untenable grounds. 1133 The doctrine of estoppel by deed is pressed into
service by courts for the purpose of upholding family arrangements even where such
family arrangements suffer from a legal lacuna or a formal defect. 1134
Privy Council in the case of Ram Gauda Annagauda v. Bhausahib, 1135 held that
a reversioner who was a party to a transaction which amounts to a family settlement,
and has taken benefit under the same, will be estopped from challenging the said
1131
Laws of England; Vol. 17, third edition at pp. 215-216 quoted with approval in Kale v Dy.
Director of Consolidation, (1976) 3 SCC 119 at Para. 9, Page. 126
1132
Id.,at 127
1133
Kale v Dy. Director of Consolidation, (1976) 3 SCC 119 at Para. 19, Page. 30
1134
Id., at Para. 9, Page. 126
1135
AIR 1927 PC 227
210
transaction. 1136 In this case, a Hindu died in 1846, leaving a widow who survived until
1912, and a daughter. On the death of the widow A was heir to the estate. In 1868 the
widow had alienated nearly the whole property by three deeds executed and registered
on the same day. By the first deed she gave a property to her brother, and by a
different deed she sold half of another property to A and by the third deed she sold
another half of that property to her Son-in-Law. The signatures of each of the deed
were attested by two other transferees. A, who survived the widow for six years, did
not seek to set aside any of the alienations. After his death, his son and grandsons
brought a suit to recover the whole property. Their Lordship of Privy Council,
speaking through Lord Sinha, reached at a conclusion that the three deeds formed part
of same transaction aimed at proper disposition of the property of the deceased Hindu.
The appellant reversioner, who took advantage of the transaction, ―may either singly
or as a body is precluded from exercising their right to avoid it either by express
ratification or by acts which treat it as svalid or binding.‖1137
Supreme Court of India has generally taken the same view, as that of Privy
Council, regarding sanctity of family settlements. In Ram Charan Das v. Girija
Nandini Devi,1138 the Apex Court applied the doctrine of estoppel by deed to hold that
family settlements are binding and a person who takes benefit under such arrangement
cannot challenge the same. The question to be decided by the court in this case was
whether compromise between parties in a previous suit was family settlement and was
binding on them. Justice Mudholkar, speaking for the Bench comprising three Judges,
observed that Courts give effect to a family settlement upon the broad and general
ground that its object is to settle existing or future disputes regarding property among
1139
members of a family. The Court further observed, that consideration for a family
settlement is the expectation that such a settlement will result in establishing or
ensuring amity and goodwill among the relations. That consideration having passed
by each of the disputants, the settlement consisting of recognition of the right asserted
by each other cannot be impeached thereafter. It was, therefore, held that the
compromise entered into by the parties to the previous suit and embodied in a decree
1136
Id.,at 229
1137
Id.,at 230
1138
AIR 1966 SC 323
1139
Id.,at Para. 10, Page. 329
211
was in substance a family arrangement and, therefore, binding on all the parties to it.
1140
The Apex Court has given broad meaning to the word ―family‖ for the
purpose of giving effect to the deed containing family settlement, and, has held the
deed containing family settlement valid even if it was not entered into between
immediate relations. In Krishna Bihari Lal v. Gulab Chand,1141 Supreme Court
considered the question whether an agreement of family settlement can be entered
into with persons who are near relations, though not members of same family. The
Division Bench of the Supreme Court, speaking through Justice Hegde, held the
impugned family settlement was quite legal as the widow had entered into agreement
with presumptive reversioners, not with strangers and, therefore, it was not a case of
1142
widow enlarging her own right by entering into compromise. It was further held,
that to consider a settlement as a family arrangement it is not necessary that parties
should all belong to one family. The word family in the context of a family
arrangement is not to be understood in a narrow sense of being a group of persons
who are recognised in law as having a right of succession or having a claim to a share
in the property in dispute. If the dispute is settled between near relations then the
settlement of such disputes can be considered as a family settlement. Such family
settlement is binding on the parties. 1143
1140
Id.,at Para. 9, Page. 327
1141
(1971) 1 SCC 837
1142
Id.,at Para. 4, Page. 841
1143
Id.,at Para. 7, Page. 843
1144
AIR 1992 Kerala 397
212
consideration; the immediate obtaining of certain properties towards his share will
estop him from claiming any share over rest of mother‘s properties. 1145
The party to a family settlement, who himself has acted in violation of the
terms of the deed, has not been allowed by Courts to estop other party to the
agreement constituting family settlement. In P.G Hariharan v. Padaril,1146 one
Gopalan, in earlier suit, entered into compromise in a suit of partition filed by him
wherein a clause restricted rights of alienation of the parties. The plaintiff, in present
suit, was assignee of the estate of Gopalan and stranger to the family. He filed a suit
for partition against other parties to the compromise in earlier suit. The defendants,
inter alia, raised the plea of estoppel and contended that Gopalan having taken benefit
under the compromise was estopped to violate the restrictive clause, defendant being
his assignee could not claim partition. The court reached upon the conclusion that the
compromise was family arrangement but also took notice of subsequent events
wherein defendants had also made alienations of their property in violation of
restrictive clause. 1147The court, rejecting the plea of estoppel, observed:
The court will not accept such a plea of estoppel put forward in defence
by a party who has himself gone against the same provisions which he
wants the court to enforce strictly against the other party. If Gopalan
and his successors in interest, have, violated the provisions in clause 10
of the Ext. A-I, defendants have also violated such provisions equally
or more frequently and as such it may be a case where the well-known
principle propounded by Lord Coke, namely, that ‗estoppel against
estoppel sets the matter at large ‗can legitimately be applied to free the
parties from the restrictions they or their predecessors in interest have
imposed as per the restrictive provisions in question on the absolute
proprietary right the parties to the family arrangements had at the
relevant time in the subject matter of the arrangement. 1148
The researcher submits, that above analysis case law makes it clear that the
deeds containing family settlements have been upheld by the courts and special
1145
Id.,at Para. 12, Page. 401
1146
AIR 1994 Kerala 36
1147
Id.,at Para. 31, Page 48
1148
Id.,at Para. 32, Page. 48
213
sanctity is given to such deeds by the courts. The courts have consistently maintained,
in series of cases, that a person taking advantage of deeds containing family
settlements will not be allowed to challenge the same. In this context, the courts have
given wide meaning to family, and arrangements between distant relatives have been
upheld by the courts. It is also settled that the doctrine of estoppel by deed cannot be
invoked by party to family settlement who himself has acted in violation of the terms
of the deed as in such a case the principle, that there can be no estoppel against
estoppel, will apply.
Chapter XIII of the Negotiable Instruments Act, 1881, which provides for
special rules of evidence relating to negotiable instruments, contains rules of estoppel
as applicable to makers and indorsees of negotiable instruments. Section 1201152
provides that no maker of promissory note or drawer of bill of exchange shall in a suit
1153
thereon by a holder in due course, be permitted to deny the validity of the
1149
Available at : https://en.wikipedia.org/wiki/Negotiable_instrument (last accessed on 16 July,
2016)
1150
Law Commission of India, 11th Report on Negotiable Instruments Act, 1881 (September, 1958) at
Para. 1
1151
Negotiable Instruments Act, 1881, Section 13(1)
1152
―Section 120. Estoppel against denying original validity of instrument—No maker of a
promissory note, and no drawer of a bill of Exchange or cheque, and no acceptor of a bill of
exchange for the honour of the drawer shall , on proof of the protest, presume the fact of dishonor,
unless and until validity of the instrument as originally made or drawn.‖
1153
Section 9 of the Negotiable Instruments Act, 1881 defines ―Holder in due course‖ as follows:
―Holder in due course ―means a person who for consideration became the possessor of a
promissory note, bill of exchange or cheque if payable to bearer, or the payee or indorsee thereof,
214
instrument as originally made or drawn. Section 121 1154 of the Act provides that
maker of promissory note and accepter of bill of exchange will not be permitted to
deny the payee‘s capacity, at the date of note or bill, to endorse the same. Section
1221155lays down the rule of estoppel against indorser of negotiable instrument and
provides that no indorser of a negotiable instrument shall, in a suit thereon by
subsequent holder be permitted to deny the signature or capacity to contract or any
prior party to the instrument. The rule of estoppel laid down under Section 120 of the
Negotiable Instruments Act, 1881 shall apply only when holder of such instrument
holds it in due course.
The rule of estoppel by deed cannot be invoked by holder in due course if the
instrument is illegal on the face of it. In V.C.T.N Chidambaram v. Ayaswami,1156 one
of the question referred to High Court by the District Judge was whether holder of
promissory note payable to bearer could make the debtor under such promissory note
liable for the debt despite the fact that such promissory notes are made illegal by
express Statutory provision. The lender, inter alia, sought to raise plea of estoppel
against debtor under Section 120 of the Negotiable Instruments Act, 1881. Justice
Krishnan, while rejecting the plea, in his separate Judgement, that the suit is by the
payee on a note which is on the face of it is illegal and not therefore by any ‗holder in
due course‘.1157
1158
In Karuppa Goundan v. T.R Narayanaswami, Wadsworth, J of Madras
High Court held that Section 120 of the Negotiable Instruments Act, 1881 only
prevents the maker of the note from denying the validity of the instrument as
originally made or drawn. It does not bar any defence which is independent of a plea
if payable to order….‖ Section 8 of the Act defines ―Holder‖ of promissory note, bill of exchange
or cheque as ―any person entitled in his own name to the possession thereof and to receive the
amount due thereon from the parties thereto. Where the note, bill or cheque is destroyed, its
holder is the person so entitled at the time of such loss or destruction.‖
1154
―Section 121.Estoppel against denying capacity of payee of indorse.—No maker of a promissory
note and no acceptor of a bill of exchange payable to order shall, in a suit thereon by a holder in
due course, be permitted to deny the payee‘s capacity, at the rate of the note or bill, to indorse the
same.‖
1155
―Section 122.Estoppel against denying signature or capacity of prior party. ---No indorser of a
negotiable instrument shall, in a suit thereon by a subsequent holder, be permitted to deny the
signature or capacity to contract of any prior party to the instrument.‖
1156
ILR (1917) 40 Mad 585
1157
Id.,at 589
1158
(1941) 2 MLJ 808
215
that the instrument as originally made or drawn was invalid. In this case maker of
promissory note challenged a part of amount promised on the ground that it was
interest towards earlier mortgage and not in fact paid to the promisor and as such is
prohibited under Act IV of 1938. The Court held that such a plea is not barred by
Section 120 of the Negotiable Instrument Act, 1881 as it does not challenge the
validity of the instrument as originally made or drawn. 1159
1159
Id., at 809
1160
ILR 2005 Karnatka 2911
1161
Under Section 120 the transferor of inchoate instrument is presumed to authorise the holder in due
course to fill up the instrument. Under Section 118 certain presumptions in favour of Holder in
due Course of negotiable Instrument are raised.
1162
Sartarsab v. B. Alliah, ILR 2005 Karnataka 2911 at Para. 9, Page. 2913
216
preclude the drawer of the bill of exchange or the maker of the note
from the setting up in a suit by the holder in due course, the plea that he
never made or drew the instrument and that his name to it has been
forged or the plea that the note executed by him was not for a simple
unconditional loan but, on certain conditions previously agreed upon
and that those conditions have not been fulfilled. 1163
Thus, the researcher submits that it is settled that maker of promissory note
and drawer of bill or exchange will be estopped to assert that the document as
originally drawn made or drawn by them was not valid. However, they are not
estopped to deny their liability on any other ground e.g. the holder was not a holder in
due course or that there was no consideration for promissory note and the same was
drawn as inchoate instrument as security for other loans. The estoppel only extends to
the denial of capacity of payee to indorse the instrument or capacity of contract of any
1163
Ibid.
1164
AIR 1992 Ker 141
1165
Id.,at Para. 7
1166
Id.,at Para. 8
217
prior party. The instrument is open to challenge on any other ground not stated in the
statutory provisions such as fraud or misrepresentation etc.1167
Estoppel by deed is a rule of evidence, founded upon the principle that solemn
and unambiguous statement or engagement in a deed must be considered as binding
between parties and privies and, therefore, as not admitting any contrary proof. It is
important to observe that this is a rule of common law. Under common law, the
exception arises only when the deed is fraudulent or illegal. 1168 The position, in
equity, is different in this respect. In equity, where there are proper grounds of
rectifying the deed e.g. it is based on common mistake of fact, then, to the extent of
rectification there can plainly be no estoppel based on the original form of the
instrument.1169 In equity, a party to an instrument could not set up estoppel in reliance
on a deed wherein untrue recital is induced by his own representation, whether
innocent or otherwise, to the other party. 1170
No person can contradict his own deed by stating that he had wrongful and
fraudulent intention at the time of executing the deed. In Re Tarun Kumar Ghose,1171
a father opened a bank account in the name of his minor son and deposited money in
the account. Unfortunately, the son died while he was still minor. The father, got
exemption from duty payable under Court Fees Act, 1870 in respect of letter of
administration he got from the registrar of High Court by stating that he was trustee
for his son. The collector, however, challenged the fact of his being trustee. In his
evidence father stated that the money in the account of his son, in fact, belonged to
him, and he had deposited the money in order to prevent tax. Thus, the question
before the court was the intention of the father, and whether he can be heard to allege
an intention contrary to his conduct or which involves an assertion that he intended to
act dishonestly. Remfry, J. held that no person can for his benefit be allowed to say
that he acted illegally and in violation of rules. The court will, despite his assertion
1167
Saftarsab v. B. Alliah, ILR 2005 Karnatka 2911
1168
Greer v. Kettle,[1988] HL 156 at 171
1169
Ibid.
1170
Ibid.
1171
In Re Tarun Kumar Ghose, AIR 1935 Calcutta 509
218
that he had honest intention at the time of opening the account, will not believe him
and he will be liable to pay the duty. 1172 The Court observed:
In Madan Lal Kapur v. Subhash Lal Kapur and others,1176 Delhi High Court
held that principles of estoppel by deed apply only between parties to a document and
their privies, not with other people. In this case, there was a Construction agreement
between the plaintiff and Defendant No. 1 wherein Defendants No. 2 to 4 were not
parties. It was, therefore, held that Defendant No. 2 to 4 are not precluded by rule of
estoppel to assert that property was held benami by plaintiff as per family settlement
1172
Id.,at 511
1173
Id.,at 511
1174
(1995) Supp (4) SCC 100
1175
Id.,at Para. 6 ,Page. 103
1176
(2003) 71 DRJ 732
219
contrary to the assertions in the agreement between Plaintiff and Defendant No. 1.1177
The Court, speaking through Justice Vikramajit Sen, observed:
One of requirement for a person to enter into a legally binding contract is that
he must have attained the age of majority according to law to which he is subject.
Indian Contract Act, 1872, under Section 11, also provides that only major person will
be competent to enter into a contract.1179 The question whether a minor, who falsely
misrepresents his age, and thereby makes the other party to enter into a contract, will
be estopped from alleging his minority under the law of contract has come before the
courts in a large number of cases. In Mohori Bibi v. Dharmodas Ghose,1180 Priviy
Council held that that minor‘s contract was void and not merely voidable because the
question whether contract is void or voidable presupposes the existence of contract
within meaning of Indian Contract Act, 1872 and such contract cannot arise in case of
minor.1181 In this case, plaintiff was a minor at the time he entered into contract of
mortgage and the lower courts found that mortgagee was aware of the fact of minority
at the time of execution of mortgage deed. Although the plea of estoppel against
1177
Id.,at Para. 23
1178
Id.,at Para. 24
1179
―11. Who are competent to contract? -----Every Person is competent to contract who is of the age
of majority according to the law to which he is subject, and who is of sound mind and is not
disqualified from contracting by any law to which he is subject.‖
1180
[1903] Indian Appeals 114
1181
Id., at 124.
220
plaintiff was raised against the plaintiff the court left the question open and found it
unnecessary to deal with the question of estoppel as is the present case, because, truth
was known to both parties and no party was misled.1182
In Sadiq Ali Khan v. Jai Kishori,1183 once again, the question before the
Judicial Committee of Privy Council was whether minority could be pleaded by the
persons executing the mortgage deed. Two Lower Courts differed on the question of
the fact of minority. Their Lordship of Privy Council, agreeing with the trial Court
held that the mortgagors were proved to be minors and mortgage deed executed by
them was nullity.
In Khan Gul v. Lakha singh,1185 one of the question formulated for decision by
full bench of Lahore High Court was whether a minor, who, by falsely representing
himself to be a major, has induced a person to enter into a contract, is estopped from
pleading the minority to avoid the contract. Sir Shadi Lal, in his judgement, observed
that despite the fact that the word ―person‖, as used in Section 115 of the Indian
Evidence Act, 1872 includes minor as well major, a minor cannot be estopped
because the Law of Contract as contained in Indian Contract Act, 1872 specifically
says that minor does not have capacity to contract. The general Law of estoppel
cannot defeat the provision of particular legislation i.e. Contract Act, 1872.1186In the
words of Justice Sir Shadi Lal:
1182
Id.,at 122
1183
AIR 1928 P.C 152
1184
Id.,at Para. 17
1185
AIR 1928 Lah 609
1186
Id.,at 613
221
Now, when the law of Contract lays down that a minor is not to be
liable upon a contract entered into by him, he should not be made liable
upon the same contract by virtue of the general rule of estoppel. 1187
1187
Id., at 614
1188
AIR 1931 Bom 561(FB)
1189
Id.,at 567
1190
Id.,at 569
1191
(1973) 2 SCC 312
1192
Id.,at Para. 16, Page. 320
222
view seems to be that estoppel cannot override a plain statutory provision of law. In
other words, Section 11 of the Indian Contract Act, 1872, being a matter of
substantive law, it must prevail over Section 115 of Indian Evidence Act, 1872 which
is merely a matter of procedure.1193
The Law Commission further observed that rule of estoppel laid down in
Section 115 of the Evidence Act, 1872 may apply in ―other cases.‖ Such cases are
―where the cause of action is not in contract or transfer of property, and is one not
barred by a specific statutory provision. 1194 The question of application of doctrine of
estoppel as laid down in section 115 of the Indian Evidence Act, 1872 on Minors was
once again discussed by law Commission in its 185th report.1195
1193
Law Commission of India, 69th Report on Indian Evidence Act, 1872(May 1977) at Para. 57.15
1194
Id.,at Para. 57.16
1195
Law Commission of India,185th Report on Indian Evidence Act, 1872(March 2003) at 280
1196
Id.,at 276
223
Mutual mistake is another exception to the application of the doctrine of
estoppel by deed. In Wilson v Wilson,1197 Chancery Division, held that estoppel by
deed will not arise if the document is rectifiable due to mutual mistake of both the
parties. 1198 In this case, plaintiff joined defendant, who was his brother, in a purchase
of house with the intention of helping him to satisfying the condition of lending
society. The purchase price was paid by the defendant and it was established that the
intention of parties was that defendant should be sole owner of the house. It was also
established that the solicitor who prepared the purchase deed created beneficial
interest in favour of plaintiff brother by mistake. The plaintiff on the basis of such
beneficial interest claimed half share in the property, defendant filed application for
rectification of the deed and declaration that the provision of beneficial interest was
inserted by mutual mistake of all the parties. Justice Buckley observed while allowing
the application for rectification of the deed in accordance with true intention of the
parties observed that even if no such rectification was done, he could ―treat the deed
as not constituting such an estoppel as to preclude me from looking behind it to
discover what the intentions of the parties were, because as between the parties to his
action the deed is one which clearly ought to be rectified, so that the parties cannot
rely upon it except in the form in which it ought to be rectified either for its direct
legal effect or for its effect as an estoppel.‖ 1199
1197
[1969] WLR 1470
1198
Id.,at 1474, quoting with approval observations of Lord Maugham in Greer v. Kettle,[1938] AC
156,171
1199
Ibid.
1200
AIR 1964 Cal 439
1201
Id.,at Para. 9, Page. 442
224
It has, however, been held that there can be no estoppel when the truth appears
from the same instrument unless clear intention is expressed in the deed to disregard
the rule. Where a person knows the circumstances in which the deed has been
executed, whether he has acquired such knowledge personally or through an agent,
cannot setup estoppel in his own favour, if the circumstances were such as to make
the deed invalid between the parties. 1202 It is, thus, well settled that mutual mistake by
parties, if established in court upon facts of the case, will defeat the plea of estoppel
by deed.
Thus, researcher submits that the equitable doctrine of estoppel by deed has
been applied in diverse situation in India by Legislature and Courts. The doctrine
protects the interest of transferee in good faith against fraudulent or erroneous
representation of transferor. Estoppel by deed, as a result of language set out in the
document, bars the enforcement of claim against a party who acted upon the reliance
of those written terms. 1203 The doctrine of estoppel by after Acquired title, as
contained in Section 43 of the Transfer of Property Act, 1882 is strong enough to
grant title to bonafide transferee. It is well settled that for the application of the
doctrine of feeding grant by estoppel to apply, the intention or knowledge of
transferee is material and not that of transferor. The above analysis, in the opinion of
researcher, also shows that the courts have successfully used the doctrine of estoppel
by deed to protect the sanctity of family settlements by giving full effect to the
instruments containing family settlements. The doctrine, when applied to Negotiable
Instruments, provides certainty to day to day commercial transactions and provide
security and certainty in financial transaction. There are some exceptions such as
fraud, mutual mistake which are general in nature and apply to estoppel by deed in
general.
1202
Seth Parmanand v. Champa Lal, (1956) All LJ 1at Para. 13, Page. 3
1203
Essel Propack v. Essel Kitchenware, (2016) SCC Online Bom 937 at Para. 40
225