TITLE PAGE

1. INTRODUCTION 2
i. STATEMENT OF PROBLEM
ii. OBJECTIVES OF RESEARCH
iii. HYPOTHESIS
iv. RESEARCH QUESTION
v. RESEARCH METHODOLGY
vi. REVIEW OF LITERATURE
2. [CHAPTER – 1] BONA FIDE TRANSFER 4

3. [CHAPTER – 2] IMPROVEMENTS MADE BY BONA FIDE TITLE 6

5. [CHAPTER – 4] EXCEPTIONS TO DOCTRINE OF FRADULENT 9

7. CONCLUSION 11

TABLE OF CONTENTS

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INTRODUCTION:

Whenever a living human transfers property under the Indian Property Law when it is
performed towards one or more other people who are alive, or to oneself and one or more
other living persons and himself., this act is referred to as Transfer of Property under the
Indian Property Law. The Transfer of Property Act of 1882 governs the procedures, methods,
and approval of property transfers or conveyances of title for immovable property in India,
with the exception of Chapter II of the Act, which governs both the type of property that is
mentioned under the Indian property law that is both movable and immovable property which
is from Sections 5 to 37. The TP Act covers bona fide purchasers or transferees in all parts
relating to bona fide purchasers or transferees. The TP Act also provides for certain
exceptions. which does not allow for the defence of a genuine buyer's rights. A purchaser
who is also considered or know as the bonafide transferee is the individual who buys a
property without analysing or knowing about another person's claim to the property's title but
this person also buys it for a reasonable price. Section 41 of the TPA is a primary right that
protects the interest of a bona fide transferee who makes a transfer for value without notice.
Fraudulent transfer is briefly explained in the section 53 of the transfer of property act 1882.
Each owner of a property has the right, as he wants, to transfer his property. But with a
bonafide motive, the move must be made.
If the transfer is made for a deceptive reason, it is intended to defeat the interest of the
creditor or any possible transferor. Where the transfer is made with a dishonest motive, the
motivation behind the transfer, while it is legitimate in law, will be awful according to the
concept of equity and justice. The main motive or the object of the fraudulent transfer which
is made by the respected person from one to another is to ensure the protection of creditor
and resulting transferee. Fraudulent transfer is voidable at the choice of creditor and
transferee. Section 53 comprises of two sections. The initial segment is in regard of transfer
of immovable property made with aim to overcome or defer the creditors of the transferor
and second part is in regard of transfer with plan to defraud a resulting transferee. The
principle of section 53 depends on the standard of justice, good conscience and equity. The
section specifies deceitful transfer that is the fraudulent transfer. A transfer made with goal to
defeat any privilege of the transferee or of some other individual intrigued in that is called
deceitful transfer of property which is also called fraudulent transfer of property. Such
transfer isn't void yet voidable at the choice of individual named. A transfer is described in
the Act as “act by which a living person conveys property, in present or in future, to one or
more living person or to himself and one or more other living persons” 1.The person who
transfers the property or the land to another person is called as the "transferor", and the
"transferee" is the person who is in the place to receive the property or the land. The term
"living human" encompasses not only individuals but also legal entities such as corporations,
associations, and groups of people. regardless of whether they are incorporated or not, and
without regard to any laws governing the transfer of property within these classes.2 A person
who is of legal age, of sound mind, and is not otherwise excluded by any law has the ability
to contract.3 Both bona fide transfer and the fraudulent transfer are different from each other
1
Section 5, The Transfer of Property Act, 1882.
2
Section 7, The Transfer of Property Act, 1882.
3
Section 11, The Indian Contract Act, 1872.

2
on good terms. The concept of fraudulent transfer and the doctrine of part performance are
very closely related to each other but not one and the same.
STATEMENT OF PROBLEM:
Both bona fide transfer and the fraudulent transfer are different from each other on good
terms. The concept of fraudulent transfer and the doctrine of part performance are very
closely related to each other but not one and the same. There are several requirements and
certain differences between them which plays a major role between them. Understanding and
knowing the major differences and the requirements between them will make a proper impact
while transferring the property. There is also burden of proof because there is no proper
proof and also the existence of fraud will not be presumed by the court it has to be proved but
this is different in the case of bona fide transfer. There is also a common problem that occur
in the courts that is whether the transfer was one intended to defeat and delay the creditor in
the case of fraudulent transfer.
OBJECTIVES OF THE RESEARCH:
 To understand the differences and the various factors between bona fide transfer and
fraudulent transfers.
 To understand, analyse and the concept of bona fide transfer and fraudulent transfer of
property
 To compare and differentiate between the concept of fraudulent transfer and bona fide
transfer and the rights that the person have.
HYPOTHESIS:
A bona fide a legal transfer and approval is made by a person who has no knowledge of the
real title, but it is subject to the rules outlined in Section 52. Section 52, which states that no
one may move contested property when a legal action or suit is pending, is also a concept
enumerated for the security of the public interest and as a matter of public policy. Many of
the above-mentioned rights are exceptions to the rule "nemo qoud dat non habet," but they
are justified under the law based on the concepts of justice, equality, and estoppels.
Therefore, the above methods by which bona fide buyers can be covered are provided. But in
the case of fraudulent transfer the situation of the person involved in the transfer changes
because there are many complications involved in this case.
RESEARCH QUESTION:
1. How is bona fide transfer and fraudulent transfer different from each other?
2. What remedies can a bona fide title holder who has made improvements in a defective
title hold?
RESEARCH METHODOLOGY:
For this project, secondary methodology will be employed which involves collecting
information from the writings related to this topic of various other distinguished authors. This
methodology allows us to collect, analyse and compare the available existing literature.

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REVIEW OF LITERATURE:
 Good Faith and Fraudulent Conveyances by Harvard law review, this journal
paper explains and differentiates between the bona fide transfers and fraudulent
transfers and gives a clearer idea about these two concepts.
 Fraudulent and Voluntary Conveyances of Property by M. V. Ramaswamy Iyer,
this article mainly focuses on the fraudulent transfers and the other concepts which is
involved in the transfer of property. It also briefly explains about the voluntary
conveyances of property and the important factors regarding this concept.
 Equitable Subordination, Fraudulent Transfer, and Sovereign Debt by Adam
Feibelman, this book discusses and explains and deeply concentrates on the different
concepts involved in the transfer of property. It briefly explains the fraudulent transfer
and the difference between other concepts and difficulties involved in the transfer of
property. It gives a wider idea on this topic from both English and Indian perspective.

CHAPTER – 1
BONA FIDE TRANSFER
In English, the Latin word "bona fides" literally means "good faith." A Bona Fide
Transferee or Purchaser in Property Law is an innocent party who buys a property for a fair
price without knowing about another person's claim to the property's title. A bona fide
transfer for value without notice is another term for such a transaction. The Transfer of
Property Act establishes privileges for such genuine transferees to satisfy them and protect
them from loss resulting from the transferor's misrepresentation or dishonest behaviour. The
TPA's Section 41 is a primary right that safeguards the interests of a bona fide transferee who
makes a value transfer without warning. It specifies that This section includes the statutory
application of the Estoppels Principle. In the case of Cairncross v Lorimer 4, the principle was
first proposed.  In effect, it forbids or it tries to prevent the person or the individual who is
involved in the process from contesting the legitimacy of an act to which he has consented
and others have carried out the act based on that consent or a presumption of permission
based on acts that they could not have carried out without that consent.
In the case of Sarat Chunder v Gopal Chunder, 5 this hypothesis is revered in Section
115 of the Indian Evidence Act, 1872 for this situation it has been held so that it applies to the
areas which is available at this point. The Theory of Equity, as expressed on account of
Ramcoomar v. Macintosh sovereign6, offers such a security. This guideline expresses that if
an individual has allowed another to hold himself out as the proprietor of a domain and an
outsider buys it for an expense from the clear proprietor, trusting him to be the genuine
proprietor in accordance with some basic honesty, the real proprietor who has permitted
another to hold himself out would not be permitted to recover his title. Just when an
individual can demonstrate that the buyer had immediate or positive information on the
genuine title or may have added to its revelation will such a case be allowed. The Bona fide
Purchasers who buy the property with a faulty title have certain rights. These rights are
4
Cairncross v Lorimer, (1860) 3 Macq 827, p 829.
5
Sarat Chunder v Gopal Chunder, (1893) ILR 20 Cal 296: 19 IA 203.
6
Ramcoomar v Mac-queen, (1872) 11 Beng LR 46, p 52,.

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granted by the TPA and can be contained in several different parts of the TP Act, despite not
having a separate chapter or section covering or describing them. These rights are granted by
the TPA and can be contained in several different parts of the TP Act, despite not having a
separate chapter or section covering or describing them.
CONSENT OF REAL OWNER:
If the temporary or the apparent ownership over the property of the transferor was
created by him, the real owner of a property is not held responsible. This condition arises not
only when the owner expresses his or her ownership through express words of agreement, but
also when it is inferred through actions. As a result, if the owner of the property who is
supposedly the real owner is aware that another person is misrepresenting his property as his
own and he knowingly accepts it, his inaction or silence will be interpreted as approval. 7 This
is discovered on the theory that "if one of two innocent persons must suffer as a result of a
third's fraud, he shall suffer who, through his indiscretion, has allowed such third person to
commit the fraud."8

OSTENSIBLE OWNER:
“Transfer by Ostensible Owner- where an individual is the ostensible owner of
immovable property and transfers it for consideration with the consent, express or implied, of
the persons involved in immovable property, the transfer shall not be voidable on the ground
that the transferor was not allowed to make it; provided that the transferee, has acted in good
faith after taking due care to ensure that the transferor has the authority to make the transfer.”
The classification of ostensible owners is one of the most critical factors for gaining security
under this provision. Binapani Paul v. Pratima Ghosh was decided by the Supreme Court. 9
“One who has all the indicia of ownership without being the real owner” has been described
as an ostensible individual. Such a person has all the rights according to the law to represent
himself as the owner of the property. A number of cases have established which positions,
such as those of boss, professed agent, menial servant, or trustee of an idol, do not constitute
ostensible ownership.
NOTICE:
“An individual is said to have notice of a fact when he actually knows the fact, or
when he would have known it but for wilful abstention from an enquiry or search which he
ought to have made, or gross negligence,” according to Section 3 of the TPA. This section
envisages two forms of notice: direct and constructive. Having a full knowledge about the
property and the rights that the transferor has towards the property and the intention that the
transferor have is indicated by the term “clear note”. The explanation or the guidelines when
"wilful abstention from an investigation/search or gross negligence." is dealt in the next part
that is the secondary part of the description which has led the transferee to believe that the
person who does the transfer who is also considered as the transferor is the true owner, then
the transferee is given constructive notice of the transferor's lack of good title. As a
consequence, in order for a transferee to gain under Section 41, he or she must have taken all
7
Sara Chunder v Gopal Chunder, (1893) ILR 20 Cal 296
8
Baidya Nath v Alef Jan, (1922) 36 Cal LJ 9
9
Binapani Paul v Pratima Ghosh, AIR 2008 SC 543

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appropriate steps to validate the transferee's legal title, such as reviewing title deeds and
papers which confirms the registration. This proof of inquiry is necessary in order to be
eligible for security under this provision.10 Without that, positive note would be assumed,
making this section ineffective. Such transferees would be barred from receiving relief under
this Section if they wilfully ignore existing lines of inquiry.11 Furthermore, adequate and
crucial steps must be taken to explain and establish about the transferor’s ownership towards
the property. It's likely that verifying that the property was registered under the transferor's
name in the revenue or municipal records isn't enough.12 Similarly, a cursory examination of
neighbours or tenants does not constitute sufficient investigation.
GOOD FAITH AND RESONABLE CARE:
For a bona fide transferee to be covered under this Section, as explained in Kashmir
Singh v. Panchayat Samiti13, he must have acted in good faith and after taking due care to
ensure that the transferor has the authority to make the transfer. A transferee who wilfully
ignores the move and accepts it without question is not safe. The amount of proper treatment
has not been defined; however, the Bombay High Court has indicated that it will be decided
on a case-by-case basis based on the facts and circumstances. As a consequence, this clause
can only be used as a refuge when a transferee has knowingly, in good conscience, bought a
property for consideration without knowledge of the real title from someone who isn't the real
owner. This section preserves the rights of uninformed buyers who act honestly and with
good intentions when purchasing real estate.
CHAPTER – 2
IMPROVEMENTS MADE BY BONA FIDE TITLE HOLDERS UNDER DEFECTIVE
TITLE
All potential transactions between a transferor and a transferee are protected by the
Convey of Property Act of 1882. In the same way, Section 51 of the Property Act states that
"if the transferee of immovable property makes some progress on the property, believing in
good faith that he is completely entitled thereto, and if the transferee is subsequently evicted
from the property by someone with a better title, the transferee has the right to demand that
the individual who caused the eviction either estimate the value of the improvement and
compensate or secure it to the transferee, or sell his interest in the property to the transferee at
the then market value, regardless of the value of the improvement. The approximate value of
the change at the time of the eviction shall be the sum to be compensated or secured in
respect of it. When the transferee has planted or sown crops on the property that are growing
when he is evicted from it, he is entitled to those crops and to free ingress and egress to
gather and bring them under the circumstances aforesaid.” As a result, the transferee who,
despite being unaware of the rights, makes any changes in good faith should be paid. For
example, A is the owner of a movable asset. He leases it to B, who proceeds to pay him rent,
oblivious to the fact that A has mortgaged his house to C, and C, as the mortgagee, is now
entitled to the rent. B will no longer be paid. As a result, a tenant who pays rent in advance to
10
Sheogobind v Anwar Ali, (1929) Pat 305.
11
Sheotahal v Lal Narain, (1930) AIR 422
12
C Sundarammal v Arunachala, AIR 1927 Mad 1138
13
Kashmir Singh v Panchayat Samiti, (2004) 6 SCC 207: AIR 2004 SC 2438

6
someone who is no longer entitled to receive it will not be charged with the rent again, while
any advance paid as a loan amount will not be insured. Section 51 incorporates a right
founded on the maxim the sense of "he who wants equity must do equity" is self-evident. As
a result, no one should be able to enrich himself at the expense of another. It means that if
you buy a property from a benamidar in good faith and with a good intention, you are free to
make whatever changes you want in that home. If anyone wishes to retake ownership of a
home based on his title, he can only do so by paying off the costs of renovations. As a result,
an individual who requires equity must also provide equity to others by paying compensation
equal to the current market value of the improvements. If the bona fide purchaser follows the
following requirements, he can be entitled to compensation for the improvements:
i. He must have held possession under the colour of title;
ii. He must have held possession in the honest belief that he has secured good title from
the true owner.
iii. He must be under the honest belief that he has secured good title to the property in
question and is the owner thereof.
As a result, the above-mentioned conditions must be met in order to invoke the right
enumerated in section 51. As a result, where the defendant had made changes in good faith as
a bona fide occupant of the land and in the assumption that the land is his own, the principle
underlying these provisions of law is that no man should enrich himself at the expense of
another. The applicant, who profits from the investment that raises the value of the land,
should compensate the defendant for the costs incurred. So, if an individual is under the
mistaken belief, he is entitled to the protection of section 51. The court held in the case of
American Bapatist Foreign Mission Society v. Pattabhiramaya that good faith must be
demonstrated.
Improvements by faulty title holders do not imply cosmetic or operational
improvements to an existing house. Changes that increase the property's value as a
marketable topic are referred to as improvements. As a result, the value of improvements is
not determined solely by the amount of money spent by the individual making the
improvements to the land. The value of the improvements made by the individual must be
determined at the time of eviction, even though the amount of money spent on the
improvements is not a determining factor in the market value of the property to be sold.

There are simple illustrations that help to understand this more such as,
 X leased his house to Y for a certain amount per month. He later mortgaged it to Z,
but Y was unaware of this and continued to pay X's rent. Since X behaved in good
faith and is covered by this doctrine, he cannot be required to pay the rent to Z again.
 A is the legal guardian of B, who is under the age of 18. A enslaved B's land in favour
of C, and he believed himself to be the sole owner, made changes to it. When B won
the vote, he demanded C's eviction. C may take advantage of this doctrine's defence
and claim either compensation or a stake in the property from the real owner.
 A purchased a home at a court auction and restored it completely, raising its market
value. Later, he was presented with an eviction notice and refused compensation on

7
 the grounds that he was aware of the risks. It is impossible to deny compensation to
an individual in this case.
 After 10 years of being barren and bare, X established a colony on top of it without
permission. The government requested that X be evicted because he had trespassed. In
these cases, X is unable to profit from this doctrine.

CHAPTER – 3
FRAUDULENT TRANSFER
Section 25 of the Indian Penal Code describes the word "fraudulently." It states that
when a person does something with the intent to defraud someone, he is said to have done it
fraudulently. In Dr. Vimla V. Delhi Administration 14, the word defraud has been stated and
explained by the supreme court. According to, the word "defraud" includes two elements:
deception and harm to the individual deceived. This harm isn't limited to monetary loss. It can
also be described as the taking of someone's property or assets, as well as harming someone's
body, mind, or reputation. Transfers that are made with the intent to defraud are referred to as
fraudulent transfers in general. The TPA Act deals with fraudulent transfers under Section 53:
“Fraudulent Transfers– Any transfer of immovable property made with the intent to
defeat or postpone the transferor's creditors shall be voidable at the discretion of any such
defeated or delayed creditor. Nothing in this section affects the rights of a transferee who acts
in good faith and for a good reason. At the discretion of the transferee, any transfer of
immovable property made without regard with the intent to defraud a subsequent transferee
shall be voidable.”
All cases of such fraudulent transfers are voidable at the option of the party
defrauded, according to the statute (the creditors or the subsequent transferee). In order to
avoid the defeat of valid claims of creditors or transferees, the Section combines the common
law concepts of equity, justice, and good faith. Since the Act makes all such cases voidable at
the option of creditors/transferees, the creditors bear the initial responsibility of proving such
fraudulent conduct or motive. Once the facts have been established to demonstrate prima
facie that the debtor intended to defraud or obstruct the creditors, the debtor must present his
case and clarify the facts.
SCOPE OF CREDITORS:
A creditor is a person who owes a debt to another person. In everyday language, it
refers to someone who has borrowed money or sold goods and has not been paid back.
Furthermore, the section uses the term "creditors" rather than "creditor." This complexity is
critical to grasp in order to show that a move is fraudulent. A fraudulent transfer must have
the intent of delaying or defeating all creditors, in general, i.e., it must be an attempt to avoid
repayment in general, rather than merely favouring one creditor over another. As a result, any
litigation brought under Section 53 of the TPA would favour the transferor’s creditors by
benefiting them. In the judgement of Mina Kumari v. Bijoy Singh,15 “A debtor may pay his
debts in any order he pleases and may prefer any creditor he chooses,” it has been kept.
14
Dr. Vimla v. Delhi Administration 1963 AIR 1572
15
Mina Kumari v Bijoy Singh, (1916) ILR 44 Cal 662

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Furthermore, the Supreme Court has held that the mere presence of a debtor's preference for a
particular creditor is insufficient to imply an attempt to defraud or defeat all creditors.
BURDEN OF PROOF:
The burden of proof in demonstrating whether the transfer was made with the intent of
delaying or defeating the creditors [ or the persons to whom has transferred the property or
one who is said to be the transferor owes the financial responsibility or the liability] is on the
transferor. The burden of proof falls on those to whom the transferor owes a financial
obligation for those who owe money, i.e. the person who gets the credits., the delay and the
loss that they have gone through can only be shown to others by the transfer which was made
with the intention to cause them can only be explained by the creditors. In the case of
Chandradip v. Board of Revenue16 the person who made the allegation was given the
presumption of proof for proving the fraud. The burden of proof for having an intention that
could cause injury or damage to the person who receives the property, in such cases it can be
suggested that to analyse and look into the background and the situations that are involved in
each cases. This means that proving the transferor's purpose does not have a one-size-fits-all
formula.
ESSENTIALS OF THE DOCTRINE OF FRADULENT TRANSFER:
 Property transfer 
 Property must be immovable in nature
 Transfer of the respective property must have been undertaken with the intention of
delaying or defeating the plan or scheme
 The borrower must bear the consequences of such a delay or loss
 The move may be revoked.
 The transfer must be for the purpose of consideration.

CHAPTER – 4
EXCEPTIONS TO DOCTRINE OF FRADULENT TRANSFER
Section 53 of the Transfer of Property Act of 1882 recognises two totem exceptions.
The fraudulent transfer doctrine does not apply to,
i. The person to whom the transfer is made performs the whole transaction in good faith
and for a fee.
ii. Any legislation relating to insolvency that is in effect at the time will be applied.
iii. The person to whom the move is rendered performs the whole act in good faith and
for a fee.
A person is legally protected if that person during the transfer of the property received
that property in good faith and if the paid the exact or the precise market value of that
property. When a person purchase that is the person who is considered to be the transferee in
the transaction purchases a property that is immovable in nature and at the time of the
purchase if that person during the time of the transfer was in good faith and paid the fair

16
Chandradip v. Board of Revenue, A.I.R. 1978 Pat 148

9
amount which is considered to be the sufficient consideration, such a person cannot take
advantage of Section 53 of the Act. In the event that the beneficiary of the transfer has no
information, i.e. has no constructive or real warning of the transferor's fraudulent intent, the
creditors [ that is the people who are considered or the people to whom the person
transferring the property owing any financial liability ] under Section 53 of the Act, you can't
attempt to assert the property or find the transfer invalid. However, during the time of the
transfer if the person receiving or purchasing the property from the person who is considered
to be the transferor knows about the illegal or the nefarious plans that the transferor had then
it will not be considered as the transfer that has been made with the good faith. So that person
will not be able to use the laws nor he will be protected by the exemption.
In the case of Vinayak v. Kaniram 17 the situation was found to be that the person who
sold the property had the ill intention to sell his immovable property to someone who would
purchase the land and give immediate cash in return and also he had the intention to keep the
cash away from the person he owed the financial liability.it was found out that the situation
was much worser than they thought because the person who purchased that is the person to
whom the property was transferred was fully aware of all the plans and the intentions that the
transferor had from the beginning . Since the person who bought the property that is the buyer
was aware of the transferor's bad intentions, the learned court determined that he was indeed
a party to the fraud because of his knowledge. The agreement which was put during the time
of the sale of the property was observed to be voidable, which implies that the injured party,
in this case the overdue or defeated creditors, can choose whether or not to declare the deal
void.
In the case of Kapini Goundan v. Sarangapani 18 person who was a male member of
the group had assumed financial responsibility for a large sum of money.  Since he was
clever and felt he was above the rules, he passed his property to his offspring of his
previous marriage that is his first in order to maintain it out of the hands of those to whom he
owed debt responsibilities. The educated Madras court, in this case with an interesting factual
matrix, the process that the person implemented was so clever that there was no proof of
malice which would be really helpful for proving the liability that the person had with the
other person to whom he owed debts. However, according to the judge, the learned court
erred in its decision, and it would be prudent to treat this case as an outlier rather than a rule.
Any legislation relating to insolvency that is in effect at the time will be applied. The
application of the Doctrine of Fraudulent Transfer has zero effects to the individual to whom
the transfer of the property was made, which derive from any law relating to insolvency that
is in effect at the time that is Sec 53, even though the individual transferring the property had
the intent to serve the interests of the people to whom he owed some sort of financial
responsibility in order to postpone or defeat it.
The major point of the insolvency laws is that the assets held by an insolvent
individual are distributed equally among those to whom he owes some kind of financial
responsibility. If, on the other hand, any one person to whom he owed any kind of financial
obligation is preferred, in some way, over the other, the transfer is deemed to be fraudulent
by default under such clause. When the person transferring the property is declared insolvent

17
Vinayak v. Kaniram, A.I.R. 1926 Nag. 293
18
Kapini Goundan v. Sarangapani, (1916) Mad. W. N. 288

10
and, as a result, sells his property, the transfer of the property that he owns cannot be stopped
by anyone that is even by those persons that he owns some kind of liability.
RESEARCH QUESTION:
1. How is bona fide transfer and fraudulent transfer different from each other?
In Latin, bona fide means "in good faith." It emphasises the absence of fraud or deceit as
applied to business transactions and the like. A genuine securities sale is a fully transparent
operation. A genuine commitment is one that the individual intends to follow through on. A
bona fide transfer means a transfer of property from one person to another person without
knowing the exact rights that the person who transfers have towards the property. In this type
of property, the transfer is often made wit the faith that the person has towards another
person. But this does not mean that there won’t be any misguiding or any deceiving intent. In
many cases there is a huge loss faced by the person who purchases. So, to control and to
compensate such losses faced by the innocent parties there are laws that have been enacted.
But in the concept of fraudulent transfer it is exactly opposite to that of bonafide transfers
because these types of transfers are made with the intention to create loss not only to the
property or the economic loss but in some cases there is also harm caused to the body and the
conscience of the person. So eventually the main difference that is between these two types of
the transfer of property is that the intention behind the transfer. If the intention is to defraud
or to cheat the person who purchases the property to create loss and cause injury to him it is
fraudulent transfer whereas in the case of bonafide transfer the party purchases the property
without knowing the claim that the transferor has towards the property, here he purchases it
for a valid consideration and also there is no illegal intention behind the transfer. Here the
transfer is made only by the good faith.
2. What remedies can a bona fide title holder who has made improvements in a
defective title hold?
A person who transferred the property in good faith and improvements to the property
thinking that he has the right to make those changes can get compensation for the amount of
money that he has spent in developing the property or the money that he has invested in that
property that he thought he is entitled to. In some cases, he may get the interest in the subject
property for the loss that he has faced. For the bona fide purchaser to get compensation he
must satisfy the conditions that are put forth by the law. In a faulty title, modifications made
by bona fide title holders are an important recourse available to the transferee who has made
improvements to the property in good faith. As previously noted, the statute offers safeguards
under this doctrine in order to provide justice to the grieved title holder. As a result, Section
51 of the Transfer of Property Act of 1882 is yet another equitable doctrine.

CONCLUSION:
This paper analyses the two types of transfers that are bonafide transfer and fraudulent
transfer. It tries to explain about both these types of transfers which comes under the transfer
of property act 1882. It tries to compare and differentiate between both these types of
transfers for better understanding of the provisions which is relating to both the types of
transfers. In my opinion the laws relating to the fraudulent transfers must be made stricter

11
such as penalising the person who committed the transfer so that there will a decrease in these
types of frauds.

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