Introduction

Notice means information or knowledge of a fact. When a person has knowledge about a fact or under the existing circumstances it can be proved that he must have knowledge about a fact, it is said that he has notice of such fact.

What is Doctrine of Notice?

• The concept of Notice for the purpose of The Transfer of Property is given under Section 3 of Transfer of Property Act, 1882 (TPA).
• According to the Transfer of Property Act, 1882, “a person is said to have notice of a fact:
  • When he actually knows that fact i.e., Actual Notice; or
  • When but for-
    • Willful abstention from an inquiry or search which he ought to have made, or
    • Gross negligence
  • he would have known it i.e., Constructive Notice.

What are the Types of Notices?

• Notice may be of following types:
  • Under Section 3 of TPA Notice can be; “Actual or Express Notice” or “Constructive Notice or Implied Notice “.
• Actual or Express Notice
  • Actual notice means when a person actually knows about the existence of a fact.
  • The fact must be a definite information given in the course of negotiation by a person interested in the property. The information of fact should not be a rumour or hearsay.
• Constructive or implied Notice
  • According to Section 3 of TPA, a person is said to have notice of a fact, which he would have known, but for his “gross negligence” or “willful abstention from making an enquiry or search” does not know.
    • However, Constructive Notice is the equity which treats a man who ought to have known a fact as if he actually does know it.
  • In other words, constructive notice of facts are those facts which a person ought to have known, but because of gross negligence or willful abstention does not know it.
  • Illustration: A sells the house by a registered document to B. He later enters into a contract with C to sell him the same house. Law imposes a duty upon C to inspect the registers at the Registrar’s office, and if he does that, he would come to know about the sale in favour of B. A failure to inspect the register will be detrimental to the interests of C, as he would be imputed with constructive notice of the registered transaction.
• The legal presumption of constructive notice arises from the following circumstances:
  • Willful Abstention from Enquiry or Search
    • The words willful abstention from an inquiry or search under Section 3 of TPA means an abstention from inquiry or search as would show want of bonafides and a mere omission to make inquiries cannot be regarded as sufficient to constitute constructive notice within the meaning of the section.
  • Gross Negligence
    • Gross negligence does not mean mere carelessness, it is a degree of negligence so gross in nature that a court of law may treat it as a proof of fraud. If there exists mental indifference to obvious risks then it is a gross carelessness or negligence. What would be gross negligence in one case would not be so in another. It all depends on the man’s knowledge and the means of information which lay to his hand.
    • The main difference between willful abstention and gross negligence is that in latter the intention is not wrong or fraudulent.
      • Illustration: X purchases a property within the municipality. X did not check whether any municipal taxes pertaining to the property were in arrears. As X failed to check before purchasing it amount to gross negligence.
• Registration As Notice
  • Registration is considered as constructive notice when the document is compulsorily registrable. The amending act of 1929 of TPA made it clear that registration of an instrument relating to immovable property amounts to notice of the instrument from the date of registration.
  • Registration is a notice only in the following circumstances:
    • When the instrument is required by law to be registered.
    • Registration is notice to a subsequent transferee. Prior transferee is not affected by notice of subsequent transactions from the registration of the same.
    • The instrument must have been registered in the manner prescribed by the Registration Act, 1908.
• Possession As Notice
  • If someone possesses an immovable property, then the purchaser must know that someone is exercising right to possession and enjoyment on that property. In other words, the person dealing with any immovable property shall be deemed to have notice of the title of any person who, temporarily, is in actual possession thereof. Only actual possession acts as notice.
  • Illustration: A sells his property to B and then A requested B to let him live in the property as long as A finds a new place to live. Registration was not done. A sell the same property to C. As B’s possession is not actual so it is not a constructive notice to C.
• Notice To Agent
  • The general principle is that a person has notice of fact when information of the fact is given to or obtained by his agent. The knowledge of the agent is regarded as the knowledge of the principal. This general principle has certain limitations.
  • Notice to agent is notice to principal in the following circumstances:
    • The agent must have actual knowledge of a fact.
    • The agent must have obtained the knowledge during tenure of agency.
    • The agent must have been appointed for a particular transaction or business.
    • The knowledge of fact must be material to that particular transaction or business.
    • The agent must obtain the knowledge in a good faith as a reasonable prudent man.

What are the Exceptions to this doctrine?

1. If the agent fraudulently conceals knowledge of fact with wrongful intention, then his knowledge will not amount to principal’s knowledge.
2. If there is a third party who is involved with agent in the fraud and the third party knows that agent is concealing the fact with wrongful intention, then agent’s knowledge will not amount to principal’s knowledge.