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Sec.122 and 123 of T.P. Act – whether there is any conflict in two earlier decisions Naramadaben Maganlal Thakker v. Pranjivandas Maganlal Thakker & Ors. (1997) 2 SCC 255 and K. Balakrishnan v. K. Kamalam & Ors. (2004) 1 SCC 581 – Apex court held – No – held that the former judgment – clearly rests on the facts of that case. If the gift was conditional and there was no acceptance of the donee it could not operate as a gift. Absolute transfer of ownership in the gifted property in favour of the donee was absent in that case which led this Court to hold that the gift was conditional and had to become operative only after the death of the donee. The judgment is in that view clearly distinguishable and cannot be read to be an authority for the proposition that delivery of possession is an essential requirement for making a valid gift. – and further held thatIn the case at hand as already noticed by us, the execution of registered gift deed and its attestation by two witnesses is not in dispute. It has also been concurrently held by all the three courts below that the donee had accepted the 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. and further held thatThe High Court was in that view perfectly justified in refusing to interfere with the decree passed in favour of the donee. This appeal accordingly fails and is hereby dismissed but in the circumstances without any orders as to costs.= CIVIL APPEAL NO. 4195 OF 2008 RENIKUNTLA RAJAMMA (D) BY LRS.. Appellant (s) VERSUS K.SARWANAMMA Respondent (s) = 2014 – July. Part – http://judis.nic.in/supremecourt/filename=41773

Sec.122 and 123 of T.P. Act – whether there is any conflict in two earlier decisions Naramadaben Maganlal Thakker v. Pranjivandas  Maganlal  Thakker & Ors. (1997) 2 SCC 255  and K. Balakrishnan  v.  K.  Kamalam  & Ors. (2004) 1 SCC 581 – Apex court held – No – held that the former judgment –  clearly rests on the facts of  that  case.  If  the gift was conditional and there was no acceptance of the donee it  could  not operate as a gift. Absolute transfer of ownership in the gifted property  in favour of the donee was absent in that case which led  this  Court  to  hold

that the gift was conditional and had to become  operative  only  after  the death of the donee.    The judgment is in that view clearly  distinguishable and cannot be read to be an authority for the proposition that  delivery  of possession is an essential requirement for making a valid gift. – and further held thatIn the case at hand  as  already  noticed  by  us,  the  execution  of registered gift deed  and  its  attestation  by  two  witnesses  is  not  in dispute.  It has also been concurrently held by all the three  courts  below that the donee had accepted the 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.

and further held thatThe High Court was in that view perfectly  justified  in  refusing  to interfere with the decree  passed  in  favour  of  the  donee.  This  appeal accordingly fails and is hereby dismissed but in the  circumstances  without any orders as to costs.=

An apparent conflict between two earlier decisions  rendered  by  this

Court 

one in Naramadaben Maganlal Thakker v. Pranjivandas  Maganlal  Thakker

& Ors. (1997) 2 SCC 255 

(“7. It would thus be clear that the execution of  a  registered  gift  deed,

acceptance of the gift and delivery of the property, together make the  gift

complete. Thereafter, the donor is divested  of  his  title  and  the  donee

becomes the absolute owner of the property.  The  question  is  whether  the

gift in question had become complete under Section 123 of the TP Act? It  is

seen from the recitals of the gift deed  that  Motilal  Gopalji  gifted  the

property to the respondent. In other  words,  it  was  a  conditional  gift.

There is no recital of acceptance nor is there  any  evidence  in  proof  of

acceptance. Similarly, he had specifically stated that  the  property  would

remain in his possession till he was alive. Thereafter, the gifted  property

would become his property and he was entitled to collect  mesne  profits  in

respect of the existing rooms throughout his life. The gift  deed  conferred

only limited right  upon  the  respondent-donee.  The  gift  was  to  become

operative after the death of the donor and he was to  be  entitled  to  have

the right to transfer the property absolutely by way of gift or he would  be

entitled to collect the mesne profits. It would thus be seen that the  donor

had executed a  conditional  gift  deed  and  retained  the  possession  and

enjoyment of the property during his lifetime…..”)

and

the other in K. Balakrishnan  v.  K.  Kamalam  & Ors. (2004) 1 SCC 581 

(“10. We have critically examined the contents of the gift deed.  To  us,  it

appears that the donor had very clearly transferred to the donees  ownership

and title in respect of her 1/8th share in properties. It was  open  to  the

donor to transfer by gift title and ownership in the  property  and  at  the

same time reserve  its  possession  and  enjoyment  to  herself  during  her

lifetime. There is no prohibition  in  law  that  ownership  in  a  property

cannot be gifted without  its  possession  and  right  of  enjoyment.  Under

Section 6 of the Transfer of Property Act  “property  of  any  kind  may  be

transferred” except those mentioned in clauses (a)  to  (i).  Section  6  in

relevant part reads thus:

“6. What may be  transferred.—Property  of  any  kind  may  be  transferred,

except as otherwise provided by this Act or by any other law  for  the  time

being in force.

(a)   *     *    *

(b) A mere right to re-entry for breach of a condition subsequent cannot  be

transferred to anyone except the owner of the property affected thereby.

(c)   *     *    *

(d) An interest in  property  restricted  in  its  enjoyment  to  the  owner

personally cannot be transferred by him.

(e) A mere right to sue cannot be transferred.”

11. Clause (d) of Section 6 is not attracted on the terms of the  gift  deed

herein because it was not a property, the enjoyment of which was  restricted

to the owner personally. She was absolute owner of the property  gifted  and

it was not restricted in its enjoyment to  herself.  She  had  inherited  it

from her maternal father as a full owner. The  High  Court  was,  therefore,

apparently wrong in  coming  to  the  conclusion  that  the  gift  deed  was

ineffectual merely because the donor had reserved to herself the  possession

and enjoyment of the property gifted.”)

has led to this reference 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 O.S. No.979 of 1989  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.=

Defendants  plea

the gift deed executed in  favour  of  the

plaintiff was vitiated by fraud,  mis-representation  and  undue  influence.

Trial court findings

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,

mis-representation 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.

Fist appellant court 

The defendant’s case that she had apprehended grabbing  of  the

property by Sankaraiah forcing her to make a sham gift  deed  was  held  not

established

especially when Sankaraiah had died three  years  prior  to  the

execution of the revocation deed by the defendant.

If  the  gift  deed  was

executed by the donor to  save  the  property  from  the  covetous  eyes  of

Sankaraiah, as alleged by  the  defendant,

there  was  no  reason  why  the

defendant should have waited for three years after the death  of  Sankaraiah before revoking the same reasoned the  Court.

The  first  Appellate  Court

also affirmed the finding of the trial Court that  the  donee  had  accepted the gift made in his favour.

The  High Court,

however,  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.

Before the Apex court

whether retention of possession  of  the  gifted

property for enjoyment by the donor during her life time and  the  right  to

receive the rents of the property in any way affected the  validity  of  the

gift.  

That a gift deed was indeed executed by the donor in  favour  of  the

donee and that the donee had accepted the gift was not  challenged  and  the

finding to that effect has not been assailed even before  us.

A  conditional  gift  was  not

envisaged by the provisions of the Transfer  of  Property  Act,  argued  the

learned counsel of the appellant.

Inasmuch  as  the  gift  deed  failed  to

transfer, title, possession and the right  to  deal  with  the  property  in

absolute terms in favour of the donee the same was no gift in  the  eyes  of

law, contended learned counsel for the appellant.

Reliance  in  support  of

that submission was placed by the learned counsel upon the decision of  this

Court

in Naramadaben Maganlal Thakker v. Pranjivandas Maganlal  Thakker  and Ors. (1997) 2 SCC 255.

On behalf of the  respondents  it  was  per  contra  argued  that  the

validity of the gift having been  upheld  by  the  Courts  below,  the  only

question that remains to be examined was whether a  gift  which  reserved  a

life interest for the donor could be said to be invalid. That question  was,

according to the  learned  counsel,  squarely  answered  in  favour  of  the

respondents by the decisions of this Court

in K. Balakrishnan v. K.  Kamalam & Ors. (2004) 1 SCC 581.

conclusion

Naramadaben Maganlal Thakker v. Pranjivandas Maganlal  Thakker  and Ors. (1997) 2 SCC 255.

The above decision clearly rests on the facts of  that  case.  If  the

gift was conditional and there was no acceptance of the donee it  could  not

operate as a gift. Absolute transfer of ownership in the gifted property  in

favour of the donee was absent in that case which led  this  Court  to  hold

that the gift was conditional and had to become  operative  only  after  the

death of the donee.    The judgment is in that view clearly  distinguishable

and cannot be read to be an authority for the proposition that  delivery  of

possession is an essential requirement for making a valid gift.

2014 – July. Part – http://judis.nic.in/supremecourt/filename=41773

T.S. THAKUR, V. GOPALA GOWDA, C. NAGAPPAN

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