Facts of the case
A made a representation to B stating that he was the owner of a particular residential house. Believing this statement to be true, B purchased the property from A.
However, at the time of sale, A was not the owner of the property. After the transaction, A inherited the property from his father and thereby became the actual owner.
A now attempts to claim that he was not the owner at the time of sale and therefore cannot be bound by the transaction.
Issues in the case
- Whether A can deny his earlier statement about ownership after B acted upon it.
- Whether A is legally prevented from contradicting the representation he made to B at the time of sale.
- Whether the principle of estoppel under the Indian Evidence Act applies to this situation.
Legal principles covered
Doctrine of Estoppel – Section 115 of the Indian Evidence Act, 1872
Section 115 states that:
When a person by his declaration, act, or omission causes another to believe something as true and the other person acts upon such belief, the former cannot deny the truth of that thing in any legal proceeding.
In this case:
- A made a clear statement to B that he was the owner of the house.
- B relied on this representation and purchased the property.
- A benefited from the transaction and induced B to alter his position.
- A is therefore estopped from denying his ownership at the time of sale.
Ownership acquired later also binds the representor
Judicial understanding under estoppel principles holds that even if the person was not the owner at the time of transaction, but later acquires title, such title automatically passes to the purchaser because the seller is barred from denying the earlier representation.
Related case principles
Courts have repeatedly held that:
- Estoppel is a rule of equity that prevents fraud.
- One cannot “blow hot and cold” or take contradictory positions to defeat the rights of another party who relied on earlier statements.
Possible judgement
The court is likely to hold that:
- A is estopped under Section 115 of the Indian Evidence Act from denying his ownership, because he represented himself as the owner and B relied on this representation in good faith.
- Even though A was not the owner at the time of sale, his subsequent inheritance of the property automatically transfers the title to B, because A is barred from denying the sale transaction.
- The sale will be considered valid and binding, and A cannot use his previous lack of title as a defence.
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