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Wednesday, July 30, 2014

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 that The 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

ITEM No. 1A            Court No. 3                SECTION XIIA
(For Judgment)


            S U P R E M E   C O U R T   O F   I N D I A
                          RECORD OF PROCEEDINGS


 CIVIL APPEAL NO.  4195 OF 2008


RENIKUNTLA RAJAMMA (D) BY LRS..                   Appellant (s)

                              VERSUS

K.SARWANAMMA                                            Respondent (s)



Date : 17.07.2014  This  Petition was called on for judgment
            today.


  For Appellant (s)          Mr. Nitin S.Tambwekar, Adv.
                             Mr. B.S.Sai, Adv.
                             Mr. K.Rajeev, Adv.


  For Respondent(s)    Mr. V.R.Anumolu, Adv.


            Hon'ble Mr. Justice   T.S.Thakur  pronounced   Judgment  of  the
Bench comprising His Lordship and Hon'ble Mr.  Justice  V.Gopala  Gowda  and
Hon'ble Mr. Justice C.Naggapan
               The appeal is  dismissed  in terms of the signed
      judgment.  There shall be no order as to costs.

          (Shashi Sareen)                 (Veena Khera)
            Court Master                       Court Master

              Signed Reportable judgment is placed on the file.
                                                  REPORTABLE
                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION
                       CIVIL APPEAL NO. 4195  OF 2008


Renikuntla Rajamma (d) by LRs.               …Appellants

Versus
K. Sarwanamma                                …Respondent

                               J U D G M E N T
T.S. THAKUR, J.
1.    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 and the other in K. Balakrishnan  v.  K.  Kamalam  &
Ors. (2004) 1 SCC 581 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.  Before we  deal
with the precise area in which the two decisions take  divergent  views,  we
may briefly set out the factual matrix in which the controversy arises.

2.    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. 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.

3.    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,  mis-representation  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,
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.

4.    In the first appeal preferred against the said  judgment  and  decree,
the first Additional District Judge, Warangal affirmed  the  view  taken  by
the trial Court and held that the plaintiff had  satisfactorily  proved  the
execution of a valid gift in  his  favour  and  that  the  revocation  of  a
validly made gift deed was legally impermissible. 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 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 appeal filed by  the  defendant  (appellant
herein) was on those findings dismissed.

5.    Concurrent findings of facts recorded by  the  Courts  below  did  not
deter the appellants from preferring Civil Second Appeal No.809 of  2003  in
which the appellants made an attempt to assail the said findings.  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.  The  present
appeal is the last ditch attempt by the defendants to  assail  the  findings
recorded against them.

6.    When the special  leave  petition  came  up  for  preliminary  hearing
before a Division bench of this Court, the only question which was urged  on
behalf of the appellant was 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.  So  also  the
challenge to the gift on the ground of fraud,  misrepresentation  and  undue
influence, having been repelled by the Courts below, the gift stands  proved
in all  material  respects.   All  that  was  contended  on  behalf  of  the
appellant was that since the donor had retained to herself the right to  use
the property and to receive rents during her life time, such  a  reservation
or  retention  rendered  the  gift  invalid.  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.

7.    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.

8.    Reliance was also placed by the learned counsel upon Bhagwan Prasad  &
Anr. v. Harisingh  AIR 1925 Nagpur 199, Revappa  v.  Madhava  Rao  AIR  1960
Mysore 97 and Tirath Singh v. Manmohan AIR  1981  Punj.  &  Haryana  174  in
support of the submission that transfer of possession was a condition  under
the Hindu Law for a valid gift which Rule of Hindu Law stood  superseded  by
Section 123 of The Transfer of Property Act.

9.    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. It stipulates that a gift  is  void  if
the donee dies before acceptance.

10.   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  under  Section  123.
Section 123 may at this stage be gainfully extracted:



“123. Transfer how effected –  For  the  making  of  a  gift  of  immoveable
property, the transfer must be effected by a  registered  instrument  signed
by or on behalf of the donor, and attested by at least two witnesses.

      For the purpose of making a gift of moveable  property,  the  transfer
may be effected either by a registered instrument signed as aforesaid or  by
delivery.

      Such delivery may be made in  the  same  way  as  goods  sold  may  be
delivered.”





11.   Sections 124 to 129 which are the remaining provisions  that  comprise
Chapter VII deal with matters like gift of  existing  and  future  property,
gift made to several persons of whom one does  not  accept,  suspension  and
revocation of a gift, and onerous gifts including effect  of  non-acceptance
by the donee of any obligation arising thereunder. These provisions  do  not
concern us for the present.  All that is important for the disposal  of  the
case at hand is a careful reading of Section 123  (supra)  which  leaves  no
manner of doubt that  a  gift  of  immovable  property  can  be  made  by  a
registered instrument singed by or on behalf of the donor  and  attested  by
at least two witnesses. 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  there  was  any  making
delivery of possession an essential condition for the completion of a  valid
gift. A full bench comprising five Hon’ble  Judges  of  the  High  Court  of
Allahabad has in Lallu Singh v. Gur  Narain  and  Ors.  AIR  1922  All.  467
referred to several such decisions in which the provisions  of  Section  123
have been  interpreted  to  be  overruling  the  Hindu  Law  requirement  of
delivery of possession as a condition for making of a valid gift.   This  is
evident from the following passage from the above decision  where  the  High
Court repelled in no uncertain terms the contention that Section 123 of  the
T.P. Act merely added one more requirement of  law  namely  attestation  and
registration of a gift deed to what was already enjoined by  the  Hindu  Law
and that Section 123  did  not  mean  that  where  there  was  a  registered
instrument duly signed and attested, other requirements of Hindu  Law  stood
dispensed with:

“7. Dr. Katju, on behalf of the appellant, has strongly  contended  that  by
Section 123 it was merely intended to  add  one  more  requirement  of  law,
namely, that of attestation and  registration,  to  those  enjoined  by  the
Hindu Law, and that the  Section  did  not  mean  that  where  there  was  a
registered document duly signed and attested, all the other requirements  of
Hindu Law were dispensed with. Section 123 has,  however,  been  interpreted
by all the High Courts continuously for a vary long period in the way  first
indicated, and there is now a uniform consensus of opinion that  the  effect
of Section 123 is to supersede the rule of Hindu Law, if there was any,  for
making the delivery of possession absolutely essential  for  the  completion
of the gift. We may only refer to a few cases for  the  sake  of  reference,
Dharmodas v. Nistarini Dasi  (1887)  14  Cal.  446,  Ballbhadra  v.  Bhowani
(1907) 34 Cal. 853, Alabi Koya v. Mussa Koya (1901) 24 Mad. 513, Mudhav  Rao
Moreshvar v. Kashi Bai (1909) 34 Bom. 287,  Manbhari  v.  Naunidh  (1881)  4
All. 40, Balmakund v. Bhagwandas  (1894)  16  All.  185,  and  Phulchand  v.
Lakkhu (1903) 25 All. 358. Where the terms of a  Statute  or  Ordinance  are
clear, then even a long and uniform course of judicial interpretation of  it
may be overruled, if it is contrary to the clear meaning  of  the  enactment
but where such is  not  the  case,  then  it  is  our  duty  to  accept  the
interpretation so often and so long put upon the Statute by the Courts,  and
not to  disturb  those  decisions,  vide  the  remarks  of  their  Lordships
decisions, of the Privy Council in the case of Tricomdas Cooverji  Bhoja  v.
Sri Sri Gopinath Thakur AIR 1916 P.C. 182. We  are,  therefore,  clearly  of
opinion that it must now be accepted that the provisions of Section  123  do
away with the necessity for the delivery  of  possession,  even  if  it  was
required by the strict Hindu Law.”



12.   The logic for the above view flowed from the language of  Section  129
of the T.P. Act which as on the date of the decision rendered  by  the  High
Court of Allahabad used the words “save as provided by Section  123  of  the
Act”. Section 129 of the T.P. Act was, before  its  amendment  in  the  year
1929, as under:

“129. Saving of donations mortis causa and Muhammadan Law.-Nothing  in  this
Chapter relates to gifts of  moveable  property  made  in  contemplation  of
death, or shall be deemed to affect any rule of Muhammadan law or,  save  as
provided by section 123, any rule of Hindu or Buddhist law”.





13.   A plain reading of the above made  it  manifest  that  the  “rules  of
Hindu law” and “Buddhist Law” were  to  remain  unaffected  by  Chapter  VII
except to the extent such rules were in conflict with  Section  123  of  the
Transfer of Property Act.  This clearly implied  that  Section  123  had  an
overriding effect on the rules of Hindu Law  pertaining  to  gift  including
the rule that required possession of the property gifted to be given to  the
donee. The  decisions  of  the  High  Courts  referred  to  in  the  passage
extracted  above  have  consistently  taken  the  view  that   Section   123
supersedes the rules of Hindu  law  which  may  have  required  delivery  of
possession as an essential condition for  the  completion  of  a  gift.  The
correctness of that statement of law cannot  be  questioned.   The  language
employed in Section 129 before  its  amendment  was  clear  enough  to  give
Section 123 an overriding effect vis-a-vis rules of Hindu Law.  Section  129
was amended by Act No. 20 of 1929 whereby the words “or,  save  as  provided
by Section 123, any rule of  Hindu  or  Buddhist  Law”  have  been  deleted.
Section 129 of the T.P. Act today reads as under:



“129. Saving of donations mortis causa and Muhammadan Law – Nothing in  this
Chapter relates to gifts of  moveable  property  made  in  contemplation  of
death,  or  shall  be  deemed  to  affect  any  rule  of  Muhammadan   law.”




14.   The above leaves no doubt that the law today protects  only  rules  of
Muhammadan Law from the rigors  of  Chapter  VII  relating  to  gifts.  This
implies that the provisions of  Hindu  Law  and  Buddhist  Law  saved  under
Section 129 (which saving did not extend  to  saving  such  rules  from  the
provisions of Section 123 of the T.P. Act) prior to  its  amendment  are  no
longer saved from the overriding effect of Chapter VII.  The  amendment  has
made the position more explicit by bringing all other  rules  of  Hindu  and
Buddhist Law also under the Chapter VII and removing the protection  earlier
available to such rules from the operation of  Chapter  VII.   Decisions  of
the High Court of Mysore in Revappa v. Madhava Rao and Anr. AIR 1960  Mysore
97 and High Court of Punjab and Haryana in  Tirath  v.  Manmohan  Singh  and
Ors. AIR 1981 Punjab and Haryana 174, in our  opinion,  correctly  take  the
view that Section 123 supersedes the rules of  Hindu  Law  insofar  as  such
rules required delivery of possession to the donee.

15.   The matter can be viewed from yet another angle.  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  use
of word “transfer must  be  effected”  used  by  Parliament  in  so  far  as
immovable property is concerned. In contradiction 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 in so far  as  the  transfer  of
movable property by way of gift is concerned the same can be effected  by  a
registered instrument  or  by  delivery.   Such  transfer  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.
 If the intention of the legislature was to make delivery of  possession  of
the property gifted also as a condition precedent  for  a  valid  gift,  the
provision could and indeed would have specifically said so.  Absence of  any
such requirement can only  lead  us  to  the  conclusion  that  delivery  of
possession is not an essential prerequisite for the making of a  valid  gift
in the case of immovable property.

16.   That brings us to the decisions of this Court which have led  to  this
reference. In K. Balakrishnan’s case (supra) the donor executed a gift  deed
of a specified share of the property inherited  by  her  from  her  maternal
grandfather in favour of her minor son who was  the  donee-appellant  before
the Court and her four year old daughter. The  property  gifted  included  a
school building. The gift deed stipulated that the  responsibility  to  sign
in regard to the said school and the right  to  income  would  be  with  the
donor during her lifetime and thereafter  would  be  vested  in  the  donee.
After the execution of the gift deed the donor cancelled the same  and  made
a will bequeathing the property in favour  of  her  daughter  whereupon  the
donee-appellant filed a suit for  declaration  of  his  title  to  the  suit
property on the basis of the gift and a further  declaration  for  annulment
of the cancellation deed and the will  executed  by  the  donor.  The  Trial
Court dismissed the suit while the First Appellate Court decreed  the  same.
The High Court restored the view taken by the  Trial  Court  and  held  that
when the donor had reserved to herself the right to  sign  the  papers  with
respect to management of the school and the right to take usufruct from  the
property where the school was situated, no property  was  transferred  under
the deed. In appeal before this Court, the view taken by the High Court  was
reversed and that taken by the First Appellate Court restored.   This  Court
held:


“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.”

                                                         (emphasis supplied)


17.   We are in respectful agreement with the statement of law contained  in
the above passage. 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.  It is true  that  the
attention of this Court does not appear to have been drawn  to  the  earlier
decision rendered in Naramadaben Maganlal Thakker (supra) where  this  Court
had on a reading of the recital of the gift deed and the  cancellation  deed
held that the gift was not complete. This Court had in that case found  that
the donee had not accepted the gift  thereby  making  the  gift  incomplete.
This Court, further, held that the donor cancelled the gift within  a  month
of the gift and subsequently executed a Will in favour of the  appellant  on
a proper construction of the deed and the  deed  cancelling  the  same  this
Court held that the gift in favour of the donee  was  conditional  and  that
there was no acceptance of the same by the donee. The  gift  deed  conferred
limited right upon the donee and was to become operative after the death  of
the donee. This  is  evident  from  the  following  passage  from  the  said
judgment:


“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…..”


18.   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.
19.   In 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.
20.   The 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.

                                                        ………………………………….…..…J.
                                         (T.S. THAKUR)





                                                        ………………………………….…..…J.
                                         (V. GOPALA GOWDA)



                                                        ………………………………….…..…J.
New Delhi,                    (C. NAGAPPAN)
July 17, 2014

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