The concept of Notice for the purpose of The Transfer of Property is given under Section 3 of Transfer of Property Act, 1882 (TPA). Notice means to have knowledge of something i.e. to know something. In law, it means knowledge of a fact. It is used to decide on conflicting claims of two parties. In law, the Notice or Knowledge of a fact affects one’s legal rights and liabilities.
Under Section 3 of TPA Notice can be; “Actual or express Notice” or “Constructive Notice”, or it may be imputed to the transferee when information of the fact has been obtained by his Agent.
It is based on the law of presumption or it is presumed that in certain circumstances that the person knows the fact. He cannot afterwards say against it. This type of notice can be divided into five.
- Notice imputed by wilful abstention from enquiry
- Notice from gross negligence
- Notice by registration
- Notice by possession
- Notice by agent
Actual notice.- Actual notice, to constitute a binding force, must be definite information given by a person interested in the thing in respect of which the notice is issued, as it is settled rule that a person is not bound to attend to vague rumours or statements by mere strangers, and that a notice to be binding must proceed from some person interested in the thing. A mere casual conversation in which knowledge of a certain thing is imparted, is not notice of it, unless the mind of a person has, in some way been brought to an intelligent apprehension of the nature of the thing, so that a reasonable man or any normal man of business would act upon the information, and would regulate his conduct accordingly. In other words, the party imputing notice must show that the other party had knowledge which would operate upon the mind of any rational man, or man of business, and make him act with reference to the knowledge he has so acquired. A vague or general report or the mere existence of suspicious circumstances is not in itself notice of the matter to which it relates. A general claim is not sufficient to affect a purchaser with notice of a deed of which he does not appear to have knowledge. If a person knows that another has or claims an interest in property for which he is negotiating he is bound to inquire what his interest is, and if he omits to do so, he will be bound, although the notice was inaccurate as to the particulars to the extent of such interest.
The notice must be given in the same transaction. A person is not bound by notice given in a previous transaction which he may have forgotten. Notice to a purchaser by his title papers in one transaction will not be notice to him in an independent subsequent transaction in which the instruments containing recitals are not necessary to his title, but he is charged constructively with notice merely of that which affects the purchase of the property in the chain of title of which the payer forms the necessary link.
Constructive notice.- Constructive notice is the knowledge which the Courts impute to a party upon a presumption so strong that it cannot be allowed to be rebutted, that knowledge must have been communicated. “The doctrine of constructive notice” said Lord Brougham in Kennedy v. Green, depends upon two considerations first that certain things existing in relation or the conduct of parties, or in the case between them, begets a presumption so strong of actual knowledge that the law holds the knowledge to exist because it is highly improbable it should not, and next, that policy and safety of the public forbids a person to deny knowledge while he is so dealing as to keep himself ignorant or so as that he may keep himself ignorant, and yet all the while let his agent know, and himself perhaps, profit by that knowledge. The broad principle underlying the doctrine of constructive notice is that a person who is bound to make an inquiry and fails to do it should be held to have notice of all facts which would have come to his knowledge had he made the inquiry. Where, on the other hand, a person is not bound to make an inquiry he cannot be charged with constructive notice of the facts that might havebeen ascertained on such inquiry. Again, where a fact, of which a person has notice, would not put him on inquiry as to the matters in question, it cannot be constructive notice of such matter.
Classes of constructive notice
(1) Wilful abstention from search which one ought to make.
(2) Gross negligence.
(3) Registration as a notice.
(4) Possession as notice.
(5) Notice to agent
(5.1)Notice should have been received in his capacity as agent.
(5.2)Notice must have been given in the course of agency business.
(5.3)Notice must be of a fact which is material to the Agency Business.
(5.4)Fraud by an agent.
Thus it can be said that Constructive notice is a manifestation of the rule of Caveat Emptor. This is because according to Constructive notice, a person ought to have known a fact as if he actually does know it. It presupposed that in property translation a transferee ought to ascertain and verify certain facts for safeguarding his own interest. Thus he must be aware of the nature of the transaction. These facts may relate to property or the transferor, like whether the property is free of any charge or encumbrances or whether the transferor is competent to transfer the property or not.
If the property is encumbered, then the exact nature of the encumbrance ought to be ascertained by the transferee. Law puts it as the duty of the transferee, as a reasonably prudent person to be reasonably vigilant and diligent to ascertain the facts, inspect the documents relating to property in possession of the transferor, inspecting concerned persons, even with relevant statutory authorities, if required. Failure to do this would result in the imposition of Constructive notice.
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