INTRODUCTION
Today, I will discuss the Doctrine of Constructive
Notice in the context of a latest judicial pronouncement by the Hon’ble Supreme
Court, namely, Salim D. Agboatwala & Others v. Shamalji Oddhavji
Thakkar & Others, Civil Appeal No. 5641 of 2021.
TYPES OF NOTICES
But before adverting any further, let us
understand the types of notices that are prevalent in the Indian Jurisprudence.
In the case of Collector (LA) v. J. Sivaprakasam, (2011) 1 SCC
330, the Court explained that there are three types of notices, actual, implied
and constructive. Let us discuss them.
a. Actual Notice – When notice is directly
served upon a party in a formal manner or when it is received personally by
him, there is actual notice.
b. Implied Notice – If from the facts it
can be inferred that a party knew about the subject-matter of the notice,
knowledge is imputed by implied notice.
c. Constructive Notice – Notice arising by
presumption of law from the existence of certain specified facts and
circumstances is constructive or deemed notice.
DICTIONARY MEANING
Now, let us understand the dictionary meaning of ‘constructive
notice.’ Black’s Law Dictionary, Eighth Edition, defines ‘constructive
notice’ as: -
“Notice presumed by law to have been
acquired by a person and thus imputed to that person.”
Thus, in simple terms, constructive notice is a
presumption that a person has a duty to take notice of certain facts.
LEGAL PROVISION
In order to gain further clarity, let us also
peruse, let us also peruse the relevant excerpt of Section 3 of the Transfer of
Property Act, 1881. It states that: -
“A person is said to have notice of a fact
when he actually knows that fact, or when, but for wilful abstention from an
enquiry or search which he ought to have made, or gross negligence, he would
have known it.
Explanation II — Any person acquiring any
immoveable property or any share or interest in any such property shall be
deemed to have notice of the title, if any, of any person who is for the time
being in actual possession thereof.”
Thus, we see that a person is said to have notice
of a fact: -
a. When he actually knows that fact.
b. When he ought to have known that fact but could
not know or do so on account of his wilful abstention or gross negligence.
WILFUL ABSTENTION AND GROSS NEGLIGENCE
Now, what is ‘wilful abstention’ and gross
negligence? It has been explained in the case of Ahmedabad Municipal
Corpn. v. Haji Abdulgafur Haji Hussenbhai, (1971) 1 SCC 757, wherein it
was noted that “wilful abstention suggests conscious or deliberate
abstention and gross negligence is indicative of a higher degree of neglect.
Negligence is ordinarily understood as an omission to take such reasonable care
as under the circumstances is the duty of a person of ordinary prudence to
take. In other words it is an omission to do something which a reasonable man
guided by considerations which normally regulate the conduct of human affairs
would do or doing something which normally a prudent and reasonable man would
not do.”
RELEVANT CASE LAWS
Further, the Hon’ble Supreme Court has discussed
the Doctrine of Constructive Notice in plethora of case laws. Some of the
pertinent ones are: -
1. Ram Niwas v. Bano, (2000) 6 SCC
685, wherein it was observed that “a statutory presumption of “notice”
arises against any person who acquires any immovable property or any share or
interest therein of the title.” Thus, if a person is purchasing a
property and he knows that a tenant is in possession of that property, then he
ought to inquire about the terms of possession of that tenant.
2. The next case is Mohd. Noorul Hoda v.
Bibi Raifunnisa, (1996) 7 SCC 767, wherein it was opined that “constructive
notice in equity treats a man who ought to have known a fact, as if he actually
knows it. Generally speaking, constructive notice may not be inferred unless
some specific circumstances can be shown as a starting point of enquiry which
if pursued would have led to the discovery of the fact.”
3. Further, in the case of ONGC Ltd. v.
Nippon Steel Corpn. Ltd., (2007) 2 SCC 382, the Court cautioned that “the
doctrine of constructive notice cannot be extended to acts that are performed
at the instance of a third party.”
4. Now, in the case of Rajasthan Housing
Board v. New Pink City Nirman Sahkari Samiti Ltd., (2015) 7 SCC 601, it
was observed that “constructive notice means a man ought to have known a
fact” and it “is a notice inferred by law, as distinguished from actual or
formal notice.”
5. And lastly, in the case that I mentioned in the
beginning, Salim D. Agboatwala & Others v. Shamalji Oddhavji Thakkar
& Others, the Court noted that when ‘a person is said to have
notice’, is a matter of fact that is to be established through evidence.
Therefore, if a party is claiming that he did not have notice of certain fact
and the opposite party is alleging otherwise, then such claim about notice could
only be established by way of evidence.
CONCLUSION
Thus, in conclusion, Doctrine of Constructive
Notice could be summed up as: -
a. It is a presumption under law that a person has
a duty to take notice of certain facts.
b. Wilful abstention or gross negligence cannot be
taken as exceptions to this doctrine.
c. when ‘a person is said to have notice’,
is a matter of fact to be established through evidence.
d. It cannot be extended to acts of third parties.
Therefore, I hope that the nature and the meaning
of Doctrine of Constructive Notice is clear by now.
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