Due Diligence in Land Transactions

In a case, person X purchased LR No.293/III/MN (later 294/III/MN) from Mr. Y, the original allottee. Claiming good faith, X entered into a sale agreement, paid valuable consideration, and secured all necessary consents and approvals, believing the title to be defect-free. They argued that any faults by the original allottee or the allocating authority should not invalidate the grant to an innocent purchaser, particularly given that the process was sanctioned by the Directors of Survey and the Commissioner of Lands.

However, the court found that the suit property was already earmarked for governmental use and thus could not be privately allocated. Consequently, the court declared that neither X nor Y could be shielded under the innocent purchaser doctrine, and this doctrine could not legitimize a void title.

Despite Clear mandates emphasizing the necessity of rigorous due diligence in property transactions, litigants still grapple with the boundaries of the innocent purchaser for value doctrine ever since the Dina management and Torino cases.