CONCEPT OF NOTICE

UNDER PROPERTY LAW AND LAW OF CONTACTS

SUBMITTED TO:

DR. KIRAN KORI

Faculty, Transfer of Property

SUBMITTED BY:

RAHUL MANDAVI

B.A. LL.B. (Hons.)

Semester IV, Section A

Roll no. 125

Date of submission: 23th October 2017

HIDAYATULLAH NATIONAL LAW UNIVERSITY, RAIPUR

DECLARATION

I, Rahul Mandavi,
hereby declare that
the project work

entitled Concept Of
Notice Under
Property Law And
Law Of Contacts
submitted to
Hidayatullah National
Law University,
Raipur is a record of
original work done by
me under the able
guidance of Dr. Kiran
Kori (faculty, Transfer
of Property) Of HNLU,
Raipur.

RahulMandavi
Roll No. 125

Semester -IV, Section A

B.A. L.L.B (Hons.)

ii
ACKNOWLEDGEMENTS

I feel highly elated to work on the topic Concept Of Notice Under Property Law And
Law Of Contacts because of its relevance in the understanding the present scenario of
environmental law in India in particular and in the world in general..

I express my deepest regard and gratitude for our Faculty of Transfer of Property, Dr.
Kiran Kori for her consistent supervision, constant inspiration and invaluable
guidance, which have been of immense help in understanding and carrying out the
importance of the project report.

I would like to thank my family and friends without whose support and
encouragement, this project would not have been a reality.

I take this opportunity to also thank the University and the Vice Chancellor for
providing extensive database resources in the Library and through Internet.

Rahul Mandavi

Section A (Political Science Major)

B.A. L.L.B (Hons.)

iii
TABLE OF CONTENTS

Acknowledgement. iii

Introduction v

Objective vi

Research Methodology.. vi

Actual Notice...... 1

o Introduction o Essentials o Case Laws

Constructive Notice.... 4

o Introduction

o Essentials and difference o Case Laws

Notice through Agent..... 7

o Essentials o Exceptions

Conclusion... 10

Bibliography 11
iv
INTRODUCTION

Notice is the legal concept in

which a party is made aware of
a legal process affecting their
rights, obligations or duties.
There are several types of
notice: public notice (or legal
notice), actual notice,
constructive notice, and implied
notice. At common law, notice
is the fundamental principle in
service of process. In this case,
the service of process puts the
defendant "on notice" of the
allegations contained within a
criminal defendant to be
notified of the charges and their
grounds.

If a court bases personal

jurisdiction over an out-of-state
or foreign defendant on a long-
arm statute, the court must
carefully select a means of
notifying the defendant to comply
with the notice requirement of
due process. Sometimes this is
done by serving agents of the
defendant located within the
state. Because out-of-state
defendants can't always be
located easily, some state or
local laws may allow for
selication. An example of this
would be printing a notice of the
lawsuit in a newspaper published
where the defendant is believed
to reside. Because the failure of
a defendant to appear in court
results in a default judgment
against him, such measures
must be sufficiently calculated to
give actual notice to the
defendant to satisfy due process.

In the core case setting forth

constitutional notice
requirements, the U.S.
Supreme Court held that notice
must be "reasonably
calculated, under all the
circumstances, to apprise
interested parties of the
pendency of the action and
afford them an opportunity to
present their objections."
Moreover, defendants must be
notified by the "best practical
means" available.

The Transfer of Property Act

contemplates three kinds of
notices. They are:-

Actual notice.

Constructive or implied notice.

Notice to agent or imputed

notice.
v
OBJECTIVE

To analyze the concept of notice under property law.

To have an understanding of the difference between actual and constructive notice.

To study the various classes of constructive delivery.

RESEARCH METHODOLOGY

The method of research adopted for the project is analytical methodology. For the
present project relevant data and information has been received and collected from
secondary sources and there has been use of authentic books and websites that
provided reliable information and data.
vi
ACTUAL NOTICE

Actual notice is a legal term, used most frequently in civil procedure. It is notice (usually to a
defendant in a civil proceeding) delivered in such a way as to give legally sufficient assurance that
actual knowledge of the matter has been conveyed to the recipient. It can be supported by
examples such as personal service, that is, physically handing something to an individual, as it is
usually considered the least-disputable method of giving actual notice. Actual notice may be
contrasted with constructive notice, which is a way of giving notice that may not immediately bring
the matter to the attention of the individual that is intended to receive the notice.

Actual notice, for having a binding force, must be definitive information given by a person
interested in the thing in respect of which the notice is issued. As it is a settled rule that a
person is not bound to attend to vague rumors or statements by strangers, an the notice is
1
to be binding must proceed from some person interested in the thing. A mere casual
conversation in which knowledge of certain thing is imparted, does not mean 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.

The aforementioned principle as applied in the case was taken from a common law
2
precedent as furnished in the case of Barnhart v. Green-Shields , where it was held that

An actual notice to constitute a binding notice, must be definite information given by a parson
interested in the thing in respect of which the notice is issued; for it is a settled rule that a person is
not bound to attend to vague rumors or statements by mere strangers, and that a notice to be
binding must proceed from some persons interested in the thing
Ashiq v. Chaturbhuj, AIR 1928 All 159

(1854) 9 Moore's P.G. 18

1
Vague information provided randomly is considered not to fall under the definition of actual
notice as the most essential requisite being clarity of the information, given to an interested
party. The question of whether registration falls under the purview of actual notice is long
3
under a debate. In the case of Hewitt v. Loosemore , the Privy Council held

That constructive notice is knowledge which the Court imputes to a person, from the
circumstances of the case upon a legal presumption so strongly that it cannot be allowed
to be rebutted, that the knowledge must exist though it may not have been formally
communicated. Different High Courts have held different views as to whether registration
amounts to notice. Our own Court while answering the question affirmatively does not lay
down any inflexible rule

Providing a clear stance that no court is willing to develop a strict rule as per the concept of
registration. Following the common law judgment, the Allahabad High Court bench in the case of

4
Janki Prasad v. Kissen Dutt , observed and held as follows:

We do not decide that registration is of itself notice to the entire world. All we do decide is
where it is the duty of a person to search, or where a reasonably prudent man would in his
own interest make a search, then the fact that the search, if made would have disclosed a
document affecting the property, affects that man with notice of such a document and puts
on him the necessity of further enquiry.

5
The same principle was further elaborately explained in the case of Lloyd v. Bank as- In
other words, the party alleging 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. On analysis of the two judgments, it is evident
that the courts have tried to escape the burden to make registration, a prima facie notice, and
has made it a duty on the part of the seeker of the knowledge to find such registrations as they
lie in public domain so openly at any individuals disposal.
(1851) 9 Hare 449

(1894) 16 All. 478

LR 3 CH 488

2
Taking the ratio further ahead, the responsibility has further more imposed upon the
6
individuals in a more comprehensive manner. In the case of Govinda Chunder v. Doorga ,
the Honble court held that-

If a person knows that another has or claims an interest in the property for which he is
negotiating, he is bound to enquire 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 third requisite for any information to fall under the definition of actual notice is that it must
be provided in the course of same transaction and not in respect of any ordinary day-to-day
7
conversation. The principle was re-iterated in the case of Warrick v. Warrick, as -

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.

Thus on the above principle a notice to a purchaser by his title papers in one transaction
will not be deemed to be a notice to him in an independent subsequent transaction in
which the instruments containing recitals are not necessary to his title. He is charged with
notice constructively, merely of that which affects the purchase of the property in the chain
of title of, which the paper forms the necessary link.
32 WR 248

3 ATCK 294

3
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 re-butted that knowledge must have
8
been communicated.

The doctrine of constructive notice depends upon two considerations. These are:-

That certain things existing in relation of or the conduct of the 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

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 that he may keep himself ignorant and yet all the while, let
9
the agent know, and himself, perhaps, profit by that knowledge.

The broad principle underlining the doctrine of constructive notice is that a person who is
bound to make an enquiry 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 enquiry. Where, on the other
hand, a person is not bound to make an enquiry, he cannot be charged with constructive
notice of the fact that might have been ascertained on such enquiry. Again, where a fact, of
which a person has notice, would not put him on enquiry as to the matters in question, it
cannot be a constructive notice of such matter.

A note of caution for Indian courts- the courts in India should be very careful in applying
the English decisions, on constructive notice, to this country and it should do so only when
the circumstances are really similar.
Bepin v. Priyaharata, AIR 1921 Cal 730

Kennedy v Green, (1834) 40 ER 1380, Hewitt v. Poosemore, 21 LJ CH 69

4
 10 11
The cases of Daniels v Davisons and Barnhart v. Greenshields , as well as other cases
are freely quoted and applied by Indian courts, and the result is that the doctrine of
constructive notice is carried to unwarranted great lengths.

When the Indian courts apply the principle that a man has notice because if he had made reasonable
enquires, he would have ascertained the facts and if he has not ascertained the facts, he has been
guilty of gross negligence the court must carefully regard all the circumstances of the case and of the
12
people to whom the courts are going to apply the principle.

There are some classes of constructive notice. They are:-

Willful abstention from search which one ought to make:

Even in the absence of actual notice, a person may constructively and in the eye of law, be
affected with notice of fact, when he has willfully abstained from an enquiry or search,
which he ought to have made as a prudent person.

13
In Kausalsi Ammal v. Shankarmthiar, it was held that the use of the word wilful in the
definition shows that the abstention from injury should be designed and due to a desire to
avoid an enquiry which would lead him to ultimate knowledge. It mans such abstention
from inquiry as would show want of bona fide.

14
In Bank of Bombay v. Sulaiman , S lefty his house and land to his sons by his first wife and
appointed them the executors of his will. By the will, he bequeathed Rs.30,000 to the sons by
his second wife charging it to the property given to the sosn by the first wife. The first wifes
son borrowed from the bank by delivering the title deed. The bank didnt make any enquiry
about the title. They were, therefore, fixed with constructive notice of the charge which
accordingly prevailed over the mortgage to the bank.
16 Ves 249

(1885) 9 mooPC 18

Kalyani v Krishnan, AIR 1932 Mad 305

AIR 1941 Mad. 707

33 Bom 1(PC)

5
Gross Negligence

Negligence may be stated to be the omission to do something, which a reasonable man,

guided by those considerations, which ordinarily regulate the conduct of human affairs, would
do, or doing something, which a prudent and reasonable man would not do. It means absence
of such care, skill and diligence, as it is the duty of the person to bring to the performance of
the work, which he is not to have performed.

15
In Tilak Dhari v. Khedan Lal, the court held that omitting to search the registers kept in
registrars office is gross negligence and knowledge of everything that would have come in
notice would be construed to be true.

Actual Possesion

16
In order to operate as constructive notice, possession must be actual possession.

Constructive possession is not notice, and the possession of a tenant is not notice of the
title of the lessor unless the purchaser had learnt that the rent was in fact paid to him in a
manner inconsistent with the title of the seller.

17
In Chinnaswami Mudliar v. Raja Lakshmi Ammal, the court held that the proof of
possession should be sufficient notice of the title of the plaintiff under which he held the
possession.
AIR 1921 PC 112

Gunamoni v. Busunt, (1890) 16 Cal. 416

(1970) 1 MLJ 195

6
THE NOTICE THROUGH AGENT

The Notice through agent is also known as Imputed Notice. Notice through agency is
defined in Explanation III to section 4 of the Transfer of Property Act. For such notice to
arise the following circumstances should be present :

(1) Notice should have been received in his capacity as agent-

18
i.e. while acting on behalf of the principal, In Re David Payne and Co. , a company borrowed
within its borrowing powers but for a purpose not authorized by memorandum of its
association. The security in the hands of the lending company in such a case would be invalid
only if it had knowledge or notice of the fact that the money would be applied for improper use.

The question was whether lending company had knowledge of the fact before the
borrowing company had applied the loan. It was because the director did not then profess
to act on behalf of the lending company.

(2) Notice must have been given in the course of agency business-

Notice should have been received in the course of this agency business. In Chabildas v. Dayal
19
Mawzi , property was sold under a power of sale in English mortgage. A depreciatory
condition was introduced in the contact of sale. After the sale was completed, purchaser
instructed a solicitor to act for him in the preparation of the conveyance. The solicitor knew that
title was good and that the depreciatory condition was not justified.

The Bombay High Court held that the purchaser was affected with constructive notice of
the true state of the title. Reversing the decision Sir Arthur Wilson delivering the judgment
of the Privy Court observed:
(1904) 2 Ch 608

3 Bom. 566 (PC)

7
Till the contact of the sale was signed, the attorney was not acting for the purchaser. The
only thing in which he did so act was the subsequent preparation of the conveyance. The
view of the Court of Appeal imputes to the principal the knowledge of an agent not
acquired in the matter for which he was against and used it to upset a transaction of a
date before the agency commenced. This is an extension of the doctrine of constructive
notice in which their Lordships concur.

(3) Notice must be of a fact, which is material to the agency business-

20
The notice should be of a matter material to the agency business. In Wyllis v. Polien , an
assignment of a mortgage was effected through the mortgagees solicitor. The solicitor
knew that there was another encumbrance on the property. The fact not being material to
the transaction of assignment, no notice could be imputed to the assignee of the
mortgagee. Subsequent advances made by him to the mortgagor were, therefore, held to
be unaffected by notice to the intermediate mortgage.

(4) Fraud by an agent-

In English law, where an agent is guilty of fraud and has an interest in concealing the
knowledge from the principal and does so conceal it, the general rule that notice to agent
is notice to principal does not apply and the principal is not to be imputed with notice of
fraud. This exception will apply with greater force where the party seeking the benefit of
the doctrine of the constructive notice is a party to or is cognizant of the fraud.

21
In Sharpe v. Foy S, advanced moneys on a mortgage executed in his favor by F, the
transaction being negotiated by C, a solicitors clerk who acted for both the parties. It appeared
that there was a previous settlement affecting the land comprised in the mortgage and F had
communicated that fact to C. C, however, told F that he would not communicate it to S, as it
would make him nervous and cause him to hesitate about advancing money.
46 ER 797

117 WR(Eng) 65

8
It was held that when C refused to communicate the fact to S, it was the duty of F himself to
communicate to S, it was the duty of F himself to communicate it to S, that by his failure to do so F
must be considered to be a party to what amounted to be a fraud committed by C upon his client,
S and that If it were to be held that notice given under these circumstances was binding upon the
principal it would amount to robbing the person who advanced the money.

22
A similar view was taken in Cave v. Cave ,

In introducing the proviso to Explanation III, by Amending Act XX of 1929, the legislature seems to
have departed to some extent from the English Law as stated above under the proviso, notice
even to an agent who fraudulently conceals his knowledge form the principal, will be notice to the
principal except against a person who is a party to or otherwise cognizant of the fraud.
22
28 WR(Eng) 793

9
CONCLUSION

Notice is the legal concept in which a party is made aware of a legal process affecting their
rights, obligations or duties. There are several types of notice: public notice (or legal notice),
actual notice, constructive notice, and implied notice. Actual notice is a legal term, used most
frequently in civil procedure. It is notice (usually to a defendant in a civil proceeding) delivered
in such a way as to give legally sufficient assurance that actual knowledge of the matter has
been conveyed to the recipient. It can be supported by examples such as personal service,
that is, physically handing something to an individual, as it is usually considered the least-
disputable method of giving actual notice. Actual notice may be contrasted with constructive
notice, which is a way of giving notice that may not immediately bring the matter to the
attention of the individual that is intended to receive the 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 re-butted that knowledge must have
been communicated. Due to lack of Indian judgments on the concept of constructive
delivery, much reliance have been placed upon common law judgments. However, A note
of caution for Indian courts- the courts in India should be very careful in applying the
English decisions, on constructive notice, to this country and it should do so only when the
circumstances are really similar.
10
BIBLIOGRAPHY

BOOKS:

nd
Dr. G.P. Tripathi, The Transfer Of Property Act (2 Ed. Central Law
Publications 2012)

th
Avatar Singh, Transfer of Property Act (5 Ed. LExis Nexis Publications (2013)

CASES REFERRED:

Barnhart v. Green-Shields (1851) 9 Hare 449

o Barnhart v. Greenshields 33 Bom 1(PC) o Bepin v. Priyaharata, AIR 1921 Cal

730 o Daniels v Davisons AIR 1941 Mad. 707 o Govinda Chunder v. Doorga 16
Ves 249 o Govinda Chunder v. Doorga 3 ATCK 294 o Gunamoni v. Busunt,
(1890) 16 Cal. 416 o Hewitt v. Loosemore (1894) 16 All. 478 o Janki Prasad v.
Kissen Dutt LR 3 CH 488 o Kalyani v Krishnan, AIR 1932 Mad 305

o Kennedy v Green, (1834) 40 ER 1380, Hewitt v. Poosemore, 21 LJ CH 69

o Lloyd v. Bank 32 WR 248

o Warrick v. Warrick (1885) 9 moo PC 18

11