Question

PRINCIPLE: When a person fraudently 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.
FACTS: 'A', a Hindu who has separated from his father, 'B' sells to 'C' three fields, 'X', 'Y' and 'Z', representing that 'A' is authorized to transfer the same. Of these fields, 'Z' does not belong to 'A', it having been retained by 'B' on the partition, but on 'B's dying 'A' as successor obtains 'Z', and at that time 'C' had not cancelled the contract of sale.

• A. 'A' can sell 'Z' to a third party
• B. 'A' is not required to deliver' Z' to 'C'
• C. 'A' is required to deliver' Z' to 'C'
• D. None of the above

Answer 1

The correct option is C 'A' is required to deliver' Z' to 'C'

The principle in simple terms says that When a person fraudulently transfer a property, then transferor is bound to give any interest that he has or subsequently gets or gains in the property which is the subject matter of the contract till the time the contract subsists.

If you apply the principle to the facts, the transferor is A and the transferee is C. Now since C has not canceled the contract of sale, therefore, his right in the property Z still exists even though it was fraudulently transferred by A as he did not have the authority or entitlement to transfer the property. But since he subsequently gained after B's death. Now since here the transferor or A has gained interest over the property Z he is bound by the principle to deliver the property Z to C.