Renikuntha Rajamma (D) by LRS vs. AIR 2014 SC 2906
A reference was made to a larger bench for an authoritative pronouncement as to the true and correct interpretation of sections 122 and 123 of The Transfer of Property Act, 1882. The Plaintiff-Respondent in this appeal filed for a declaration to the effect that revocation deed dated 5th March, 1986 executed by the Defendant-Appellant purporting to revoke a gift deed earlier executed by her was null and void.
The Plaintiff’s case as set out in the plaint was that the gift deed executed by the Defendant- Appellant was valid in the eyes of law and had been accepted by the Plaintiff when the donee-Defendant had reserved to herself during for life, the right to enjoy the benefits arising from the suit property. The purported revocation of the gift in favour of the Plaintiff-Respondent in terms of the revocation deed was, on that basis, assailed and a declaration about its being invalid and void ab initio prayed for.
The suit was contested by the Defendant-Appellant herein on several grounds including the ground that the gift deed executed in favour of the Plaintiff was vitiated by fraud, misrepresentation and undue influence. The parties led evidence and went through the trial with the Trial Court eventually holding that the deed purporting to revoke the gift in favour of the Plaintiff was null and void. The Trial Court found that the Defendant had failed to prove that the gift deed set up by the Plaintiff was vitiated by fraud or undue influence or that it was a sham or nominal document. The gift, according to Trial Court, had been validly made and accepted by the Plaintiff, hence, irrevocable in nature. It was also held that since the donor had taken no steps to assail the gift made by her for more than 12 years, the same was voluntary in nature and free from any undue influence, misrepresentation or suspicion. The fact that the donor had reserved the right to enjoy the property during her life time did not affect the validity of the deed, opined the Trial Court.
The First Appellate Court also held that the gift deed was not a sham document, as alleged by the Defendant and that its purported cancellation/revocation was totally ineffective.
The first Appellate Court also affirmed the finding of the Trial Court that the donee had accepted the gift made in his favour. The appeal filed by the Defendant (Appellant herein) was dismissed.
The High Court declined to interfere with the judgments and orders impugned before it and dismissed the second appeal of the Appellant, holding that the case set up by the Defendant that the gift was vitiated by undue influence or fraud had been thoroughly disproved at the trial.
The Court observed that Chapter VII of the Transfer of Property Act, 1882 deals with gifts generally and, inter alia, provides for the mode of making gifts. Section 122 of the Act defines ‘gift’ as a transfer of certain existing movable or immovable property made voluntarily and without consideration by one person called the donor to another called the donee and accepted by or on behalf of the donee. In order to constitute a valid gift, acceptance must, according to this provision, be made during the life time of the donor and while he is still capable of giving the gift. It stipulates that a gift is void if the donee dies before acceptance.
Section 123 regulates mode of making a gift and, inter alia, provides that a gift of immovable property must be effected by a registered instrument signed by or on behalf of the donor and attested by at least two witnesses. In the case of movable property, transfer either by a registered instrument signed as aforesaid or by delivery is valid u/s. 123.
When read with section 122 of the Act, a gift made by a registered instrument duly signed by or on behalf of the donor and attested by at least two witnesses is valid, if the same is accepted by or on behalf of the donee. That such acceptance must be given during the life time of the donor and while he is still capable of giving is evident from a plain reading of section 122 of the Act. A conjoint reading of sections 122 and 123 of the Act makes it abundantly clear that “transfer of possession” of the property covered by the registered instrument of the gift duly signed by the donor and attested as required is not a sine qua non for the making of a valid gift under the provisions of Transfer of Property Act, 1882. Judicial pronouncements as to the true and correct interpretation of section 123 of the T.P. Act have for a fairly long period held that section 123 of the Act supersedes the rule of Hindu Law if it contained any stipulation in making delivery of possession an essential condition for the completion of a valid gift.
Section 123 of the T.P. Act is in two parts. The first part deals with gifts of immovable property while the second part deals with gifts of movable property. Insofar as the gifts of immovable property are concerned, section 123 makes transfer by a registered instrument mandatory. This is evident from the words “transfer must be effected” used by the Parliament insofar as immovable property is concerned. In contradistinction to that requirement the second part of section 123 dealing with gifts of movable property, simply requires that gift of movable property may be effected either by a registered instrument signed as aforesaid or “by delivery.” The difference in the two provisions lies in the fact that insofar as the transfer of movable property by way of gift is concerned, the same can be effected by a registered instrument or by delivery. In the case of immovable property no doubt requires a registered instrument, but the provision does not make delivery of possession of the immovable property gifted as an additional requirement for the gift to be valid and effective.
There is indeed no provision in law that ownership in property cannot be gifted without transfer of possession of such property. As noticed earlier, section 123 does not make the delivery of possession of the gifted property essential for validity of a gift.
The recitals in the gift deed also prove transfer of absolute title in the gifted property from the donor to the donee. What is retained is only the right to use the property during the lifetime of the donor which does not in any way affect the transfer of ownership in favour of the donee by the donor.
