As per section 41 of the Transfer of Property Act the transfer of the ostensible owner, “Where, with the consent, express or implied, of the persons interested in immovable property, a person is the ostensible owner of such property and transfers the same for consideration, the transfer shall not be voidable on the ground that the transferor was not authorized to make it: provided that the transferee, after taking reasonable care to ascertain that the transferor had the power to make the transfer, has acted in good faith.” The ostensible means the one that seems real but is not really in the reality. So here the ostensible owner seems like he is the owner of the property but in reality, he is not. In this, the person authorizes the ostensible owner to act as the real owner of the property. Here there must be consent from the third party and if the owner is the minor. In that case, the ostensible owner cannot be appointed with the consent as the minors are not in the capacity to give the consent. The consent can be expressed and implied. The transferor shall take reasonable care of the property and shall always act in the good faith regarding the property. The transfer shall be of the immovable property. Also here the consideration is very important as discussed under the Contracts Act so, therefore, this property cannot be disposed of as a gift. Section 41 states that the transferee must have taken reasonable care before entering into the transaction and must have assumed that the transferor had the right to transfer. The test of proper care is the amount of care a prudent man usually takes.https://legalpaathshala.com/transfer-by-ostensible-owner/
The case of the Ram Coomar v MacQueen is leading case law. In this case, it was stated that “It is the principle of natural equity which must be applied that where one man allows another to hold himself as the owner of an estate and a third person purchases it, for value, from the apparent owner in the belief that he is the real owner shall not be permitted to recover upon a secrete title unless he can overthrow that of notice, or something which amounts to constructive which ought to have put him upon an inquiry, that if prosecuted would have led to a discovery of it.”https://lawcorner.in/transfer-by-ostensible-owner-under-transfer-of-property-act/
But the Benami Transaction Act clearly prohibits the transfer of the property in the name of the ostensible owner. A Benami transaction means any transaction in which property is transferred to one person for a consideration paid by another person. This act provides where a property is transferred Benami, the person in whose name the property is held shall become the real owner. In itself, a Benami transaction is not illegal.https://www.academia.edu/10010241/Ostensible_Ownership_The_Bone_of_Contention_between_Two_Existing_LawsSection 3 (3) Benami Transaction Act, 1988 says that whoever buys the property in name of another would be punished.
There are 2 exceptions (Section 3, Benami Transaction Act, 1988)to the prohibition on Benami Transaction: If one buys the property in name of his wife, or If one buys the property for the unmarried daughter.https://www.legalbites.in/ostensible-owner/
