The Doctrine of Actual Possession as Constructive Notice comes under section 3 of the Transfer of Property Act, 1882. Section 3 of the Act explains that the concerned person has the knowledge of the facts of the property and its entitlement either through Actual Notice or through Constructive Notice. In the case of Actual Notice there is actual knowledge and definite information with respect to the concerned property and the concerned parties. In the case of Constructive Notice, it is assumed that a reasonable prudent individual would know the necessary facts of the case while purchasing a property.
Constructive notice is imputed via- Wilful Abstention; Gross Negligence; Registration of Document; Actual Possession; Notice to the Agent.
[This article specifically provides information about Actual Possession]
As per explanation II of section 3 of the TPA, 1882, any person who acquires any immovable property or its share or interest, shall be deemed to have the notice of the title and knowledge of who for the time being is in the actual possession of the concerned property.
Whenever a buyer seeks to purchase an immovable property, it is his duty to inquire and check what rights a person in possession, if any, has and what rights the buyer will have after the purchase. This is considered to be an extremely crucial step in order to know that the property is free from any encumbrances and the purchaser shall solely have all the rights towards the property.
In the case of Ram Niwas v. Bano, 2000 and H.N. Narayanaswamy Naidu v. Deveeramma, 1981, the subsequent purchaser had no idea about the prior purchase of shop and right of Reconveyance document respectively. In the case the Supreme Court held that the subsequent purchaser should have enquired about the rights of the person having actual possession, he therefore may have notice of it. Following this case, C’s rights over the property shall be subordinate to B’s right.
In the rule laid down in the English courts in the case Daniel v. Davison, explains the importance of the doctrine of actual possession, wherein a new buyer should inquire about the person having the actual possession of the property. Even though a property having multiple tenants shall not be applicable to this doctrine, a normal property of a house having only a single tenant should be applicable under the doctrine.
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