Civil appeal concerning the nature of a property document executed in 1985 by a father in favour of his daughter. The core issue is whether the document is a gift deed, a settlement, or a will, as this classification determines its revocability and the validity of subsequent transactions. The court examines the definitions and legal characteristics of gifts, settlements, and wills under Indian law, noting their distinctions regarding consideration, present transfer of interest, and revocability. Ultimately, the judgment affirms the High Court’s decision that the document is a gift by settlement, concluding that it effected an immediate transfer of interest to the daughter despite the father retaining a life interest, and therefore, its unilateral cancellation was invalid.
(A) Transfer of Property Act, 1882, Section 11, 122, 126 to 128 – Indian Succession Act, 1925, Section 2(h), 59, 61 to 63, 70, 89 -Indian Stamp Act, 1899, Section 2(q); Article 33 – Kerala Stamp Act, 1959, Section 2(q); Article 31 – Registration Act, 1908, Section 17 – Specific Relief Act, 1963, Section 2(b) – Gift – Settlement – Whether the document of the year 1985 is a gift or Settlement or Will? and whether the requirements under law or conditions in the deed have been satisfied to vest a legal right? – Held that there is consideration, conveyance, imposition of conditions and reservation of life interest by the executant, Defendant No. 1/father satisfying the requirements to classify the document as a “settlement” – The conditions to construct a house, to reside in the house, retention of life interest, the right of mortgage up to a sum of Rs.2,000/- and avail loan on that basis, cannot alter the gift, by which in unequivocal terms, the property stood vested in the plaintiff by earlier part – The condition, creating a life interest in favour of father and mother and the restriction regarding mortgage, would further imply that Defendant No. 1 had ceased to be the absolute owner – The postponement of delivery by creation of life interest is not an anathema to absolute conveyance in praesenti – Defendant No.1 has not only expressed that the property is being conveyed on account of love and affection, by vesting the rights in the property in praesenti in favour of the plaintiff, but also enabled the plaintiff to construct the house from then on and no outer time has been fixed for the construction of the house – Since the life interest was reserved in favour of Defendant No.1 and his wife, Defendant No.1 was only holding an ostensible possession and ownership as contemplated under Section 41, while the true owner being the plaintiff, after the clear conveyance by earlier clause – Held that the instrument of 1985 is a gift by settlement – Delivery of possession is not sine qua non to validate a gift or settlement – Not in dispute that the plaintiff has registered the instrument – Such registration by the plaintiff is possible only if the document was handed over by Defendant No.1 – The factum of acceptance can be derived from the conduct of the parties – Once the document is declared as “gift”, Defendant No. 1 had no right to cancel the same unilaterally and the Sub Registrar had no right to register the cancellation deed – Once the document is categorized as a gift, in the absence of any clause or reservation to cancel, the executant has no right to cancel the same – The reasons for cancellation or revocation of gift have to be proved in a court of law – Therefore, according to us, the unilateral cancellation of the document is void and as a natural corollary, the sale deed dated 19.10.1993 executed by Defendant No. 1 / father also, is invalid – Trial Court as well as the First Appellate Court had erroneously come to the conclusion that Ext.A1 document was a Will, without appreciating the law – High Court rightly set aside the concurrent judgments of the Courts below by treating the document as settlement in the judgment impugned herein.
(Para 15.1, 16, 18 to 20)
(B) Transfer of Property Act, 1882, Section 122 – Transfer of Property – Interplay between Gift and Settlement – Held that primary difference between the Gift and the Settlement is the existence of consideration in the settlement – Consideration is nothing but the quid pro quo, that each party to a contract is to perform or render a part of their obligation under the contract – In view of the fact that a gift is a voluntary disposition, it is essentially not an agreement and hence, the element of consideration is taken away from it – Settlement on the other hand is always coupled with consideration as it is mostly executed in favour of a family member – The gift or settlement of an immovable property has to be registered as per Section 17 of the Registration Act – The conditions regarding acceptance, reservation of life interest and restriction on revocation are applicable to both “gift and settlement” – The vesting of the right also takes place in praesenti in both the cases – Therefore, there is an element of gift in every settlement.
(Para 11.3)
(C) Transfer of Property – Interplay between Gift and Will – Held that a will is the declaration of the intention of the testator to give away his property – Such Will comes into force after the death of the testator. The most important requirement for a valid will is that it must again be a voluntary disposition in sound mind, which must be explicit from the instrument itself. Therefore, it can be concluded that every will also has an element of gift, with the difference being the disposition deferred until the death of the testator. Insofar as the revocation is concerned, the testator is at liberty to revoke or alter the will any number of times until his demise, but it is essential that he remains of sound mind while doing so.
(Para 11.4)
(D) Transfer of Property – Interplay between Gift, Settlement and Will – Held that the element of voluntary disposition is common to all the three deeds. – The element of gift is traceable to both “settlement” and “will” – As settled in law, the nomenclature of an instrument is immaterial and the nature of the document is to be derived from its contents – While so, a voluntary disposition can transfer the interest in praesenti and in future, in the same document – In such a case, the document would have the elements of both the settlement and will – Such document, then has to be registered and by operation of the doctrine of severability, becomes a composite document and has to be treated as both, a settlement and will and the respective rights will flow with regard to each disposition from the same document – Reservation of life interest or any condition in the instrument, even if it postpones the physical delivery of possession to the donee/settlee, cannot be treated as a will, as the property had already been vested with the donee/settlee.
(Para 11.5)
(E) Transfer of Property – Interplay between Gift, Settlement and Will – There must be a transfer of interest in praesenti for a gift or a settlement and in case of postponement of such transfer until the death of the testator, the document is to be treated as a will – The fact that a document is registered, cannot be the sole ground to discard the contents and to treat the document as a gift, just because the law does not require a will to be registered – The act and effect of registration depends upon the nature of the document, which is to be ascertained from a wholesome reading of the recitals – The nomenclature given to the document is irrelevant – The contents of the document have to be read as a whole and understood, while keeping in mind the object and intent of the testator – In case of a gift, it is a gratuitous grant by the owner to another person; in case of a settlement, the consideration is the mutual love, care, affection and satisfaction, independent and resulting out of the preceding factors; in case of a will, it is declaration of the intention of the testator in disposition of his property in a particular manner – Therefore, even when there is any ambiguity in understanding the nature of the documents from its contents the subsequent conduct of the executant must also be considered to take a decision – It is possible that in a single document, there could be multiple directions in different clauses though seemingly repugnant but in reality, it could only be ancillary or a qualification of the earlier clause – Therefore, the document must be harmoniously read to not only understand the true intent and purport, but also to give effect to each and every word and direction.
(Para 14.1)
N.P. Saseendran V. N.P. Ponnamma & Ors.
Supreme Court: 2025 INSC 388: (DoJ 24-03-2025)
