2025 INSC 388
SUPREME COURT OF INDIA
(HON’BLE J.B. PARDIWALA, J. AND
HON’BLE R. MAHADEVAN, JJ.)
N.P. SASEENDRAN
Appellant
VERSUS
N.P. PONNAMMA &
ORS.
Respondent
Civil Appeal No. 4312 OF 2025
(Arising out of SLP (C) No. 698 of 2023)-Decided on 24-03-2025
Civil, Transfer of Property
(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)
JUDGMENT
R. Mahadevan, J. :- Leave granted.
2. This appeal has been filed
against the final judgment and decree dated 10.06.2019 passed by the High Court
of Kerala at Ernakulam[Hereinafter
referred to as "the High Court"] in R.S.A. No. 1338 of 2004,
whereby the High Court allowed the said Regular Second Appeal and set aside the
concurrent findings of the Courts below, besides granting a decree in favour of
the plaintiff/ Respondent No.1 declaring her right, title and interest over the
suit schedule property by virtue of Ext.Al settlement deed dated 26.06.1985.
The High Court also declared that cancellation deed (Ext.A2) dated 19.10.1993
and sale deed (Ext.A3) dated 19.10.1993 both executed by Defendant No. 1 would not bind the plaintiff as
far as her right, title and interest over the suit schedule property is
concerned.
3. The Respondent No.1 was the
plaintiff (daughter) in O.S.No.27 of 1994 filed before the Sub Court, Cherthala[Hereinafter referred to as "the trial
Court"] and the appellant was Defendant No.2 (son) in the said suit.
Alleging that the suit schedule property was gifted by her father, who was
Defendant No.1 in the suit, vide registered deed dated 26.06.1985, the
Respondent No.1 / plaintiff filed the said suit for declaration of right, title
and interest over the suit schedule property and also for a declaration that
the cancellation deed and sale deed dated 19.10.1993 executed by the Defendant
No. 1 / father in favour of the appellant / Defendant No.2 are null and void
and for consequential injunction. During the pendency of the suit, the
Defendant No.1 / father died on 06.01.1995 and his legal heirs viz., Respondent
Nos.2 and 3 herein were impleaded as Defendant Nos.3 and 4 therein. The trial
Court, after due contest by the parties, accepted the defence put forth by the
appellant / Defendant No.2 that the deed executed in 1985 was only a Will and
not a gift, and dismissed the suit by judgment dated 28.05.2001. Challenging
the same, the Respondent No.1 / plaintiff preferred an appeal being A.S.No. 109
of 2001 before the Additional District Court, Fast Track Court No.II, Alappuzha[Hereinafter referred to as "the First
Appellate Court"]. The First Appellate Court vide judgment dated
20.12.2003, affirmed the findings of the trial Court and dismissed the appeal
suit. Aggrieved by the same, the Respondent
No.1 / plaintiff preferred a Regular Second Appeal being R.S.A. No. 1338 of
2004 before the High Court. By judgment dated 10.06.2019, the High Court upset
the concurrent findings of the Courts below and granted a declaratory decree in
favour of the Respondent No. 1 / plaintiff, by construing the document of 1985
as a gift deed. Aggrieved by the judgment passed by the High Court, the
appellant / Defendant No.2 is before us with the present appeal.
4. During the pendency of this
appeal, the Respondent No.2 died and her legal heirs were brought on record.
Taking note of the same, the name of Respondent No.2 was deleted from the array
of parties, vide order dated 24.11.2023 and cause title was accordingly,
amended.
5. The learned counsel for the
appellant contended that the document executed by the Defendant No.1 / father
in 1985 was only a Will and not a gift deed, since there was no immediate
transfer of ownership; possession of the suit schedule property was retained by
the Defendant No.1 / father and was never handed over to the Respondent No. 1 /
plaintiff (daughter).
5.1. Adding further, it is
submitted that the main test to find out whether the document constitutes a
Will or a gift is to see whether the disposition of interest in the property is
in praesenti in favour of the settlee or whether the disposition is to take
effect on the death of the executant. If the disposition is to take effect on
the death of the executant, it would be a Will. But, if the executant divests
his interest in the property and vests his interest in praesenti on the
settlee, the document will be a settlement [Refer: Ramaswami Naidu and another
v. Gopalakrishna Naidu and others[AIR
1978 Madras 54] as confirmed by this Court in P.K.Mohan Ram v. B.N.
Ananthachary and Others[(2010) 4 SCC 161]].
In the instant case, the Defendant No.1 / father never intended to transfer the
ownership of the suit schedule property while executing the document of 1985
and hence, the same can only be construed as a Will and not a gift deed as
claimed by the Respondent No. 1 / plaintiff and thus, he had the right to
revoke his will and consequently, convey the suit schedule property in favour
of the appellant / Defendant No.2 by way of a sale deed without any impediment.
5.2. According to the learned counsel,
it is borne out by the evidence that the Defendant No. 1 / father had sent a
legal notice to the Respondent No. 1 / plaintiff (daughter) demanding / calling
her to return the Will executed on 26.06.1985, which clearly shows that the
Respondent No. 1 / plaintiff (daughter) was holding the Will against the wishes
of the testator i.e., Defendant No. 1/father. Even assuming that the document
in question was a gift deed, the same was never accepted by the Respondent No.1
/ plaintiff during the lifetime of the Defendant No. 1/ father and therefore,
the gift was not acted upon.
5.3. Referring to the decision of
this Court in Baby Ammal v. Raj an Asari[1997
(2) SCC 636], it is submitted that going by the recitals in the document of
1985, the Defendant No.1 / father had retained the title to the enjoyment of
the property during his lifetime as full owner with all rights. That apart, the
Respondent No. 1 / plaintiff failed
to prove that she had accepted the alleged gift. On the other hand, the
appellant / Defendant No.2 took possession of the suit schedule property,
effected mutation and paid necessary taxes, pursuant to the sale deed dated
19.10.1993 executed in his favour and that he has been in possession and
enjoyment of the same since then. Taking note of all these factors, the trial
Court and the First Appellate Court had rightly dismissed the suit filed by the
Respondent No. 1 / plaintiff. However, the High Court set aside the concurrent
judgments of the Courts below and granted the declaratory decree in favour of
the plaintiff, by the judgment impugned herein, which has to be set aside, as
the same is contrary to law, facts of the case and evidence on record.
6. To begin with, the learned
counsel for the Respondent No.1 / plaintiff submitted that there is no
substantial question of law involved in this case. According to the learned
counsel, the suit schedule property belongs to the Respondent No.1 as per the
gift deed dated 26.06.1985 bearing Document No.3148 of 1985 executed by
Defendant No.1 / father. It was stated in the said gift deed that the right to
take income was reserved in favour of the settlor (father) and also during the
lifetime of mother of Respondent No.1; and that the settlor was having the
right to mortgage the property upto a sum of Rs.2,000/-, but possession of the
property was transferred to Respondent No.1. However, claiming that he
continued to be the owner of the property, Defendant No. 1 / father on
19.10.1993, executed a cancellation deed of the gift deed vide Document No.4233
of 1993 as well as a sale deed bearing Document No.4234 of 1993 in favour of
the appellant / Defendant No.2. The suit filed by the Respondent No. 1/
plaintiff came to be dismissed by the trial Court as affirmed by the First
Appellate Court. Yet, the High Court correctly set aside the judgments of the
Courts below and granted the declaratory reliefs in favour of the Respondent
No. 1 / plaintiff.
6.1. Elaborating further, the
learned counsel submitted that the ownership of the existing property has been
transferred voluntarily to Respondent No. 1 (donee) without any consideration
and the same was also accepted by Respondent No.1 during the lifetime of
Defendant No. 1 by presenting the deed for registration, vide Document No.3148
of 1985, on the file of SRO, Cherthala and hence, all the requirements in
accordance with section 122 of the Transfer of Property Act have been
satisfied.
6.2. The learned counsel also
submitted that the tone and tenor of the document will clearly show that it was
a gift deed, as the recitals of the deed indicate that only limited rights were
reserved to the settlor i.e., right to take income during the lifetime of the
father and mother of Respondent No. 1 and a provision, which enabled the
settlor to mortgage the property upto a sum of Rs.2,000/-. Apart from the said
two conditions, there was no restriction placed on the absolute ownership and
enjoyment of the property by Respondent No.1. Therefore, upon valid execution
of the gift deed, the same was also duly presented by the Respondent No.1 for
registration, which itself amounts to acceptance of gift.
6.3. Referring to the decision of
this Court in Reninkuntala Rajamma (Dead) v. K.Sarwanamma[(2014) 9 SCC 445], the learned counsel submitted that transfer of
possession of property is not necessary for the acceptance of a valid gift
deed.
6.4. The learned counsel further
submitted that Ext.A1 deed was accepted in 1985 and the same was acted upon by
the Respondent No.1. After the period of 7 years, the Defendant No. 1 / father
executed a cancellation deed of the said gift deed and a sale deed in respect
of the subject property, without any notice to the Respondent No.1. According
to the learned counsel, Ext.A1 is a gift deed and it cannot be unilaterally
revoked as per section 126 of the Transfer of Property Act. In this regard,
reliance was placed on the decision of this court in K. Balakrishnan v. K.
Kamalam and others[(2004) 1 SCC 581].
6.5. It is also submitted that
the Respondent Nos.2 and 3 (Defendant Nos.3 and 4 in the suit) supported the
case of the Respondent No.1 and they stated in their written statement that the
Defendant No.1 never had any right to cancel the document and the appellant /
Defendant No.2 had no right over the suit schedule property.
6.6. Regarding the appellant's
contention that after execution of the sale deed, revenue record was mutated
and he has been in possession of the suit property since then, the learned
counsel submitted that mutation of the property in the revenue record does not
create or extinguish title nor has it any presumptive value on title, and it
only enables the person in whose favour mutation is ordered to pay the land
revenue in question. In this regard, reference was made to the decision of this
Court in Sawarni v. Inder Kaur[(1996) 6
SCC 223] and P.Kishore Kumar v. Vittal K. Patkar[Civil Appeal No.7210 of 2011]. Therefore, such contention of the
appellant is incorrect and deserves to the rejected by this court.
6.7. Pointing out the above
submissions, the learned counsel prayed for dismissal of this appeal filed by
the appellant / Defendant No. 2.
7. We have considered the rival
submissions made by the learned counsel and perused the materials available on
record, more particularly, Ext.A1 dated 26.06.1985.
8. Primarily, the learned counsel
for Respondent No.1 has contended that there is no substantial question of law
to entertain this appeal. We do not agree with the same because the right to
appeal under Section 100 or 109 of the Code of Civil Procedure and Article 133
of the Constitution of India can basically be on the same premise of existence
of a substantial question of law and if the question raised before us is not
substantial, the High Court could not have interfered with the concurrent
findings without substantial question of law. A substantial question of law is
always of general importance. That apart, we are invigorated with the authority
under Article 142 of the Constitution to do complete justice, though bridled
with a responsibility to be exercised in appropriate cases. Hence, we proceed
to decide the question of law raised in the facts of the present case.
9. The relationship between the
parties is not in dispute. Seemingly, the father of the appellant originally
executed a document in 1985 titled as "Dhananischayaadharam" in
respect of the suit schedule property, in favour of Respondent No.1 (daughter).
Subsequently, he cancelled the said document and executed a sale deed for valid
consideration on 19.10.1993 in favour of the appellant (son). Claiming that the
document of 1985 was a gift deed, Respondent No. 1 instituted a suit for
declaration and consequential injunction. Pending the suit, Defendant No.1/
father died on 06.01.1995; and the suit was dismissed by the trial Court as
affirmed by the First Appellate Court by construing the document of 1985 as
Will. But the High Court set aside the concurrent judgments of the Courts below
and granted the declaratory reliefs to Respondent No.1, interpreting the said
document as settlement. Therefore, this appeal came to be filed by the
appellant before us.
10. The question to be decided
herein is twin fold, 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?
11. Before proceeding further, it
is necessary to analyze the nature, scope and provisions dealing with the above
document in brief. Section 122 of the Transfer of Property Act, 1882 defines
"Gift". Article 33 of the Indian Stamp Act, 1899 and Article 31 of
the Kerala Stamp Act, 1959, defines "Gift" as an instrument of, not
being settlement, will or transfer. Therefore, a valid Gift, as defined would
refer to an instrument by which there is voluntary disposition of one's
existing property either movable or immovable, without consideration to
another, the acceptance of which should be made during the lifetime of the
donor, implying imminent vesting of the right upon acceptance. Section 123
states, how a gift is to be made. It has two parts. The earlier part deals with
immovable property and the later, with movable property. Insofar as an
immovable property is concerned, registration is mandatory, which is in tune
with Section 17 of the Registration Act. Whereas, it is not only mandatory to
register a gift of a movable property, it also can be effected by delivery.
Section 126 states, as to when a gift can be suspended or revoked. This section
bars unilateral revocation. Section 127 enables the donor to impose any
condition in the deed, which has to be accepted for the gift to take effect or
in other words, the donee without accepting the obligation, cannot be said to
have accepted the gift. Section 128 deals with the liability of the donee for
the debts of the donor to the extent of the property comprised therein. A
conspicuous reading of the provisions would disclose that for a gift of an
immovable property to be valid, it has to be registered, universal cancellation
of the gift is impermissible and delivery of possession is not a condition sine
qua non to validate the gift.
11.1. Insofar as a settlement
deed is concerned, Section 2(b) of the Specific Relief Act, 1963, defines the
same to be a non-testamentary instrument whereby, there is a disposition or an
agreement to dispose of any movable or immovable property to a destination or
devolution of successive interest. "Settlement" under the Indian
Stamp Act and the Kerala Stamp Act under Section 2(q) refers to a
non-testamentary disposition of any movable or immovable property in writing,
in consideration of marriage or for the purpose of distributing the property of
the settlor among his family or to those to whom he desires to provide or for
the purpose of providing for some person dependent on him or for any religious
or charitable purpose and includes an agreement in writing to make such a
disposition. However, insofar as immovable properties, the registration is
mandatory under Section 17 of the Registration Act. From the above definitions,
it can be discerned that a settlement would mean a disposition of one's
property to another directly or to vest in any such person after successive
devolution of rights on other(s). Further, the circumstances and reasons that
led to the execution of such a settlement deed are described as its
consideration, which need not necessarily be of any monetary value. More often
than not, it consists of love, care, affection, duty, moral obligation, or
satisfaction, as such deed are typically executed in favour of a family member.
Also, a settlor is entitled to reserve a life interest either upon himself or
upon others and impose any condition. The person in whose favour, a life
interest is created, is permitted to use and enjoy the income arising out of
such property during his life time, but has no right of alienation as the
property had already vested in the settlee. The breach of any condition in the
settlement, would then render the settlement void. However, there are
restrictions under the Transfer of Property Act, 1882 on the conditions that
can be imposed. Section 11 of the Transfer of Property Act, 1882 states that
when by virtue of a transfer, absolute right and interest has been vested in a
party, any condition restricting or directing that the property must be enjoyed
in a particular manner would be void as it is repugnant to the original grant.
Similarly, any condition restraining or limiting the transferee from enjoying
the property is also void to that extent. Though under both the situations, the
conditions are void, the interest vested already can be enjoyed absolutely as
per the will of the transferee.
11.2. Will is a testamentary
document dealt under the Indian Succession Act, 1925. Part VI of the Act deals
with the Testamentary Succession. We will consider only the relevant provisions
applicable to this case. Will is defined under Section 2(h) as a legal
declaration of the intention of the testator to be given effect after his
death. Such declaration is with respect to his property and must be certain. As
per Section 59, every person of sound mind, not being a minor, may dispose of
his property by executing a Will. Section 61 states the circumstances under
which a Will is void. Section 62 enables a person to revoke or alter a Will at
any time while he is competent to dispose of his property by will. Needless to
say, since the Will comes into effect only after his life time, he is at full
liberty to revoke or alter his earlier Will any number of times as long as he
is in sound state of mind and not hit by the circumstances enumerated under
Section 62. Section 63 deals with execution of the Will. As per this section, a
Will must be signed by the testator or have his mark affixed by him, or by any
other person in his presence and under his direction. It must also be attested
by at least two witnesses in the presence of the testator, either by actually
witnessing the execution of the Will by the testator or by receiving an
acknowledgment from the testator that he or a person authorized by him has
signed or affixed his mark. It is not necessary for the witnesses to attest at
the same time. Section 70 speaks about the revocation of unprivileged will
which can be revoked by marriage or by execution of another will or codicil or
by writing in some other instrument clearly expressing his intention to revoke
the will or by destroying the will by burning or tearing or in some other form
by the testator or by his authorised person in his presence with the intention
to revoke the same. Chapter VI of Part VI deals with construction of wills. The
provisions consider the various rules regarding the construction of wills to
determine the true intention of the testator and to ensure that object of such
testament is achieved. The rules prescribe the remedy to deal with certain
errors and circumstances like misdescription, misnomer and the need for causes
omisus. They also lay down that the meaning is to be discerned from the
contents of the entire will and every attempt must be made to give effect to
every clause. Section 89 states that the later clause will prevail in case of the
two conflicting clauses of gifts in the will, if they are irreconcilable.
Interplay between Gift and
Settlement
11.3. As we have already seen,
the 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. At this juncture, it will be useful to refer to the recent judgment
of this court in Ramachandra Reddy (dead) through LRs and others v. Ramulu
Ammal through LRs[2024 SCC Online SC
3304], in determining, what a "consideration" is or can be, qua a
"settlement deed" in the following paragraphs:
"15.
Since the point which the High Court in its wisdom found to be the determining
factor qua the nature of the deed is the element of consideration and its
adequateness, let us consider the same.
15.1 It
shall be useful to refer to certain provisions of the Indian Contract Act, 18
72. The relevant part of the interpretation clause thereof says -
"2...
(d)
When, at the desire of the promisor, the promisee or any other person has done
or abstained from doing, or does or abstains from doing, or promises to do or
to abstain from doing, something, such act or abstinence or promise is called a
consideration for the promise;
(e)
Every promise and every set of promises, forming the consideration for each
other, is an agreement;
(f)
Promises which form the consideration or part of the consideration for each
other are called reciprocal promises;... "
15.2
The discussion regarding the meaning of the word 'consideration' made in CITv.
Ahmedabad Urban Development Authority,5 is relevant for our purposes here:
"165.
The term "consideration" however is broader. The plain meaning is a
monetary payment, for something obtained, in the form of goods, or services. In
CCE v. Fiat India (P) Ltd. [CCE v. Fiat India (P) Ltd., (2012) 9 SCC 332 :
(2012) 12 SCR 975] this Court explained the meaning of that term : (SCC pp.
360-61, paras 68-73)
"68.
... Consideration means something which is of value in the eye of the law,
moving from the plaintiff, either of benefit to the plaintiff or of detriment
to the defendant. In other words, it may consist either in some right,
interest, profit or benefit accruing to the one party, or some forbearance,
detriment, loss or responsibility, given, suffered or undertaken by the other,
as observed in Currie v. Misa [Currie v. Misa, [L.R.] 10 Exch. 153].
69.
Webster's Third New International Dictionary (unabridged) defines,
"consideration " thus:
'Something
that is legally regarded as the equivalent or return given or suffered by one
for the act or promise of another.'
70. In
Vol. 17 of Corpus Juris Secundum (pp. 420-21 and 425) the import of
"consideration " has been described thus:
'Various
definitions of the meaning of "consideration" are to be found in the
textbooks and judicial opinions. A sufficient one, as stated in Corpus Juris
and which has been quoted and cited with approval is "a benefit to the
party promising or a loss or detriment to the party to whom the promise is
made...."
At
common law every contract not under seal requires a consideration to support
it, that is, as shown in the definition above, some benefit to the promisor, or
some detriment to the promisee.'
71. In
Salmond on Jurisprudence, the word "consideration" has been explained
in the following words:
A
consideration in its widest sense is the reason, motive or inducement, by which
a man is moved to bind himself by an agreement. It is for nothing that he
consents to impose an obligation upon himself, or to abandon or transfer a
right. It is in consideration of such and such a fact that he agrees
to bear
new burdens or to forego the benefits which the law already allows him.'
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73.
From a conspectus of decisions and dictionary meaning, the inescapable
conclusion that follows is that "consideration " means a reasonable
equivalent or other valuable benefit passed on by the promisor to the promisee
or by the transferor to the transferee. Similarly, when the word
"consideration" is qualified by the word "sole ", it makes
consideration stronger so as to make it sufficient and valuable having regard
to the facts, circumstances and necessities of the case. "
(Emphasis
supplied)
15.3
Chidambara Iyer v. P.S. Renga Iyer which cites similar authorities is also
important for our consideration.
15.4
What flows from the above-cited judgments as also provisions of law, is that
'consideration' need not always be in monetary terms. It can be in other forms
as well. In the present case, it is seen that the transfer of property in
favour of Govindammal was in recognition of the fact that she had been taking
care of the transferors and would continue to do so while also using the same
to carry out charitable work. Although the deed stands reproduced supra, for
immediate recollection the relevant extract is once again reproduced herein below:
"
...execute this Settlement deed that you are the only daughter ofBagi Reddi and
that we do not have any wife or children or legal heirs and you happened to be
the daughter of our elder brother Chenga Reddi and that since we do not have
any wife or children and you happened to have looked after us very well till
now and that herein after you will look after our food and shelter needs and in
the belief that you would do all the charitable work. "
15.5 In
that view of the matter, the High Court has erred in taking such a constricted
view of 'consideration', especially taking note of the fact that this
settlement was between the members of a family. "
Further, in both the cases,
unilateral revocation is not permitted as evident from Section 126 of the
Transfer of Property Act, 1882. There can be a clause permitting such
revocation in the deed. Similarly, the creation of a life interest would not
affect the grant and change the character of the document. Similarly, the
delivery of possession is not mandatory as in both cases. In case of a gift or settlement,
it is sufficient if the donee/settlee had accepted the same during the life
time of the executor of the document and such acceptance can be either express
or implied, but must be visible from the conduct of the parties. Putting the
donee/settlee into possession or handing over the document to the recipient can
also be recognised as valid acceptance. The registration of the gift by the
donee and the possession of such document will also amount to valid acceptance.
At this point it will be useful to refer to the following judgements of this
court:
(i) K.
Balakrishnan v. K. Kamalam[(2004) 1 SCC
581 : 2003 SCC OnLine SC 1428]
"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.
31. In
our considered opinion, therefore, the trial court and the High Court were
wrong in coming to the conclusion that there was no valid acceptance of the
gift by the minor donee. Consequently, conclusion has to follow that the gift
having been duly accepted in law and thus being complete, it was irrevocable
under Section 126 of the Transfer of Property Act. Section 126 prohibits
revocation of a validly executed gift except in circumstances mentioned
therein. The gift was executed in 1945. It remained in force for about 25 years
during which time the donee had attained majority and had not repudiated the
same. It was, therefore, not competent for the donor to have cancelled the gift
and executed a Will in relation to the property."
(ii) RenikuntlaRajamma v. K.
Sarwanamma[(2014) 9 SCC 445 : (2014) 5
SCC (Civ) 1 : 2014 SCC OnLine SC 565]
"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 lifetime 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 the 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 purpose of making a gift of immovable 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 movable 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 signed 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 lifetime 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 the Transfer of Property
Act, 1882.
12.
Judicial pronouncements as to the true and correct interpretation of Section
123 of the TP 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.
16. The
matter can be viewed from yet another angle. Section 123 of the TP 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 insofar 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 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. 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.
18. We
are in respectful agreement with the statement of law contained in the above
passage in K. Balakrishnan case [(2004) 1 SCC 581]. 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 [(1997) 2 SCC
255] 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 a 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: (Naramadaben
Maganlal Thakker case [(1997) 2 SCC 255], SCC p. 258, para 7)
"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. "
20. 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.
"
(iii) Daulat Singh v. State of
Rajasthan[(2021) 3 SCC 459 : (2021) 2 SCC
(Civ) 197 : 2020 SCC OnLine SC 1004]
"24.
At the outset, it ought to be noted that Section 122 of the Transfer of
Property Act, 1882 neither defines acceptance, nor does it prescribe any
particular mode for accepting the gift. The word "acceptance" is
defined as "is the receipt of a thing offered by another with an intention
to retain it, as acceptance of a gift". (See Ramanatha P. Aiyar: The Law
Lexicon, 2ndEdn., p. 19.)
25. The
aforesaid fact can be ascertained from the surrounding circumstances such as
taking into possession the property by the donee or by being in the possession
of the gift deed itself. The only requirement stipulated here is that, the
acceptance of the gift must be effectuated within the lifetime of the donor
itself.
26.
Hence, being an act of receiving willingly, acceptance can be inferred by the
implied conduct of the donee. The aforesaid position has been reiterated by
this Court inAsokan v. Lakshmikutty [Asokan v. Lakshmikutty, (2007) 13 SCC 210]
: (SCCpp. 215-16, para 14)
"14.
Gifts do not contemplate payment of any consideration or compensation. It is,
however, beyond any doubt or dispute that in order to constitute a valid gift
acceptance thereof is essential. We must, however, notice that the Transfer of
Property Act does not prescribe any particular mode of acceptance. It is the
circumstances attending to the transaction which may be relevant for
determining the question. There may be various means to prove acceptance of a
gift. The document may be handed over to a donee, which in a given situation
may also amount to a valid acceptance. The fact that possession had been given
to the donee also raises a presumption of acceptance. "
(emphasis
supplied) "
(iv) In Satya Pal Anand v. State
ofM.P. [(2016) 10 SCC 767 : (2017) 1 SCC
(Civ) 1 : 2016 SCC OnLine SC 1202], this court after considering the scope
of the Registration Act, held that even if fraud is pleaded or claimed, the
authorities under the Registration Act cannot unilaterally cancel the document
and the parties should only approach the jurisdictional Civil Court, in the
following words:
"36.
If the document is required to be compulsorily registered, but while doing so
some irregularity creeps in, that, by itself, cannot result in a fraudulent
action of the State Authority. Non-presence of the other party to the
extinguishment deed presented by the Society before the Registering Officer by
no standard can be said to be a fraudulent action per se. The fact whether that
was done deceitfully to cause loss and harm to the other party to the deed, is
a question of fact which must be pleaded and proved by the party making such
allegation. That fact cannot be presumed. Suffice it to observe that since the
provisions in the 1908 Act enables the Registering Officer to register the
documents presented for registration by one party and execution thereof to be
admitted or denied by the other party thereafter, it is unfathomable as to how
the registration of the document by following procedure specified in the 1908
Act can be said to be fraudulent. As aforementioned, some irregularity in the
procedure committed during the registration process would not lead to a
fraudulent execution and registration of the document, but a case of mere
irregularity. In either case, the party aggrieved by such registration of
document is free to challenge its validity before the civil court."
Interplay between Gift and Will
11.4. As we have seen, 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.
Interplay between Gift,
Settlement and Will
11.5. 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. It is pertinent to mention here that the
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.
12. At this juncture, it will be
useful to refer to a few judgements on the subject: (i) In Navneet Lal @ Rangi
v. Gokul and others[[1976] 1 SCC 630],
after analysing the entire case laws on the subject, this Court highlighted the
essential principles that should guide the courts in interpreting Wills,
distinguishing from other types of documents, as follows:
(i) The
fundamental rule is to ascertain the intention of the testator from the words
used, the surrounding circumstances for the purpose of finding out the intended
meaning of the words which have been employed;
(ii)
The court, in doing so is entitled to put itself into the armchair of the
testator and is bound to bear in mind also other matters than merely the words
used and the probability that the testator had/would have used the words in a
particular sense, in order to arrive at a right construction of the Will and
ascertain the meaning of the language used;
(iii)
The true intention of the testator has to be gathered not by attaching
importance to isolated expression but by reading the Will as a whole, with all
its provisions and ignoring none of them, as redundant or contradictory, giving
such construction as would give to every expression some effect rather than
that which would render any of the expressions inoperative;
(iv)
Where apparently conflicting dispositions can be reconciled by giving full
effect to every word used in a document, such a construction should be accepted
instead of a construction which would have the effect of cutting down the clear
meaning of the words used by the testator;
(v) It
is one of the cardinal principles of construction of Wills that to the extent
that it is legally possible effect should be given to every disposition
contained in the Will, unless the law prevents effect being given to it. If
even there appear to be two repugnant provisions conferring successive
interests and the first interest created is valid the subsequent interest
cannot take effect, the court will proceed to the farthest extent to avoid
repugnancy, so that effect could be given as far as possible, to every
testamentary intention contained in the Will. "
12.1. The aforesaid principles
were reiterated in the decisions subsequently rendered by this Court [Refer:
Arunkumar & another v. Shriniwas & another[AIR 2003 SC 2528], and Bajrang Factory Ltd. & another v.
University of Calcutta & others[Civil
Appeal No. 3374/2006].
13. This Court in P.K. Mohan Ram
v. B.N. Ananthachary[(2010) 4 SCC 161 :
(2010) 2 SCC (Civ) 78 : 2010 SCC OnLine SC 361 at page 172], referred to
the broad tests or characteristics as to what constitutes a will and what
constitutes a settlement. The relevant paragraphs of the said decisions are
reproduced below for ready reference:
"13.
Having noticed the distinction between vested interest and contingent interest,
we shall now consider whether Ext. A-2 was a settlement deed or a will.
Although, no straitjacket formula has been evolved for construction of such
instruments, the consistent view of this Court and various High Courts is that
while interpreting an instrument to find out whether it is of a testamentary
character, which will take effect after the lifetime of the executant or it is an
instrument creating a vested interest inprćsenti in favour of a person, the
Court has to very carefully examine the document as a whole, look into the
substance thereof, the treatment of the subject by the settlor/executant, the
intention appearing both by the expressed language employed in the instrument
and by necessary implication and the prohibition, if any, contained against
revocation thereof. It has also been held that form or nomenclature of the
instrument is not conclusive and the court is required to look into the
substance thereof.
14.
Before proceeding further, we may notice the judgments on which reliance was
placed by learned counsel for the parties. In Gangaraju v. Pendyala Somanna
(supra), the learned Single Judge was called upon to construe deed dated 2
7.2.1917 executed by one Kristnamma. The learned Single Judge referred to the
contents of the document and observed:
"The
document on the face of it is of a non-testamentary character. It was so
stamped and so registered. It is called a dakal dastaveju, which means a
conveyance or settlement deed. It is true that a document which is not a Will
in form, may yet be a Will in substance and effect; but as was held in Mahadeva
Iyer v. Sankarasubramania Iyer, if an instrument is a deed inform, in order to
hold that it is testamentary or in the nature of a Will, there must be
something very special in the case; and unless there are circumstances which
compel the Court to treat an instrument in the form of a deed as a Will, the
Court will not do so. The leading argument of the appellant is that the
document created no estate in praesenti. A more literal translation of the
fourth sentence in para 2 of the document is:
Therefore,
on account of my affection for you, I have arranged that after my death the
property shall belong to you.
It is
certainly very difficult to derive from these words any immediate interest
created in favour of the plaintiff. But the line between a Will and a
conveyance reserving a life estate is a fine one, and it would be hard to
define in some cases where the document has been held to be non-testamentary,
wherein the personal interest which was transferred consists. A more easily
applied test is that of revocability. There is nothing in the suit document to
show that Kristnamma reserved the right to revoke it. On the contrary there is
an undertaking not to alienate any part of the property during his lifetime. I
consider that this is equivalent to a promise not to revoke the instrument,
because if the executant intended to reserve that right he could not
consistently have parted with the right to alienate. The same intention to give
finality to the deposition is suggested by Ex.3, which is a conveyance of a
portion of the property executed jointly by Kristnamma and the plaintiff. The
fact that the plaintiff was required to join is significant, and in the
schedule the property is described as that which was conveyed by Kristnamma to
him. This document seems also to lend some colour to the view that an immediate
conveyance of interest was intended in Ex.F. I think that Kristnamma had the
intention not to revoke the conveyance and this has always been regarded as one
of the most important tests. "
(emphasis
supplied)
16. In
Ramaswami Naidu v. Gopalakrishna Naidu (supra), the High Court laid down the
following broad test for construction of document:
"The
broad tests or characteristics as to what constitutes a will and what
constitutes a settlement have been noticed in a number of decisions. But the
main test to find out whether the document constitutes a will or a gift is to
see whether the disposition of the interest in the property is inpraesenti in
favour of the settlees or whether the disposition is to take effect on the
death of the executant. If the disposition is to take effect on the death of
the executant, it would be a will. But if the executant divests his interest in
the property and vests his interest in praesenti in the settlee, the document
will be a settlement. The general principle also is that the document should be
read as a whole and it is the substance of the document that matters and not
the form or the nomenclature the parties have adopted. The various clauses in
the document are only a guide to find out whether there was an immediate
divestiture of the interest of the executant or whether the disposition was to
take effect on the death of the executant. "
"If
the clause relating to the disposition is clear and unambiguous, most of the
other clauses will be ineffective and explainable and could not change the
character of the disposition itself. For instance, the clause prohibiting a
revocation of the deed on any ground would not change the nature of the
document itself, if under the document there was no disposition in
praesenti."
20. In
Vynior's case (supra) Lord Coke said "if I make my testament and last will
irrevocable, yet I may revoke it, for my act or my words cannot alter the
judgment of the law to make that irrevocable which is of its own nature
revocable." This statement of law was relied upon by the Division Bench of
Calcutta High Court in Sagar Chandra Mandal v. Digamber Mandal and others
(supra). In that case, the court was called upon to consider the true character
of the instrument which was described as a Will. After noticing the contents of
the documents, the Division Bench referred to Vynior's case and observed:
"As
to the true character of the instrument propounded by the appellant, we think
there can be no reasonable doubt that it is a will. A will is defined in
section 3 of the Indian Succession Act as the legal declaration of the
intention of the testator with respect to his property which he desires to be
carried into effect after his death. Section 49 then provides that a will is
liable to be revoked or altered by the maker of it, at any time when he is
competent to dispose of his property by will. If therefore an instrument is on
the face of it of a testamentary character, the mere circumstance that the
testator calls it irrevocable, does not alter its quality, for as Lord Coke
said in Vynior 's Case. "If I make my testament and last w ill
irrevocable, yet I may revoke it, for my act or my words cannot alter the
judgment of the law to make that irrevocable which is of its own nature
revocable. "
The
principal test to be applied is, whether the disposition made takes effect
during the lifetime of the executant of the deed or whether it takes effect
after his decease. If it is really of this latter nature, it is ambulatory and
revocable during his life. [Musterman v. Maberley, and in Bonis v. Morgan].
Indeed, the Court has sometimes admitted evidence, when the language of the
paper is insufficient, with a view to ascertain whether it was the intention of
the testator that the disposition should be dependent on his death. [Robertson
v. Smith]. Tested in the light of these principles, there can be no doubt that
the instrument now before us is of a testamentary character. It is described as
a will and states explicitly that as after the death of the testator, disputes
might arise among his relations with regard to the properties left by him, he
made the disposition to be carried into effect after his demise. The terms and
conditions are then set out, paragraph by paragraph, and in each paragraph the
disposition is expressly stated to take effect after his demise. Against all
this, reliance is placed on the sixth paragraph, in which the testator says
that he would be at liberty to mortgage the properties and not to sell them
absolutely. Such a restraint as this upon his own power of alienation during
his lifetime would be obviously void. It does not indicate any intention to
make the deed irrevocable. The principal test to be applied is, whether the
disposition made takes effect during the lifetime of the executant of the deed
or whether it takes effect after his decease. If it is really of this latter
nature, it is ambulatory and revocable during his life. [Musterman v. Maberley,
and in Bonis v. Morgan]. Indeed, the Court has sometimes admitted evidence,
when the language of the paper is insufficient, with a view to ascertain
whether it was the intention of the testator that the disposition should be
dependent on his death. [Robertson v. Smith]. Tested in the light of these
principles, there can be no doubt that the instrument now before us is of a
testamentary character. It is described as a will and states explicitly that as
after the death of the testator, disputes might arise among his relations with
regard to the properties left by him, he made the disposition to be carried
into effect after his demise. The terms and conditions are then set out,
paragraph by paragraph, and in each paragraph the disposition is expressly
stated to take effect after his demise. Against all this, reliance is placed on
the sixth paragraph, in which the testator says that he would be at liberty to
mortgage the properties and not to sell them absolutely. Such a restraint as
this upon his own power of alienation during his lifetime would be obviously
void. It does not indicate any intention to make the deed irrevocable. "
14. In Mathai Samuel v. Eapen
Eapen[(2012) 13 SCC 80], while
examining a composite document, this Court outlined the requirements for both a
Will and a gift, which read as under:
"16.
We may point out that in the case of a will, the crucial circumstance is the
existence of a provision disposing of or distributing the property of the
testator to take effect on his death. On the other hand, in case of a gift, the
provision becomes operative immediately and a transfer in praesenti is intended
and comes into effect. A will is, therefore, revocable because no interest is
intended to pass during the lifetime of the owner of the property. In the case
of gift, it comes into operation immediately. The nomenclature given by the
parties to the transaction in question, as we have already indicated, is not
decisive. A will need not be necessarily registered. The mere registration of
“will" will not render the document a settlement. In other words, the real
and the only reliable test for the purpose of finding out whether the document
constitutes a will or a gift is to find out as to what exactly is the
disposition which the document has made, whether it has transferred any
interest in praesenti in favour of the settlees or it intended to transfer
interest in favour of the settlees only on the death of the settlors.
17. A
composite document is severable and in part clearly testamentary, such part may
take effect as a will and other part if it has the characteristics of a
settlement and that part will take effect in that way. A document which
operates to dispose of property in praesenti in respect of few items of the
properties is a settlement and in future in respect of few other items after
the deaths of the executants, it is a testamentary disposition. That one part
of the document has effect during the lifetime of the executant i.e. the gift
and the other part disposing the property after the death of the executant is a
will. Reference may be made in this connection to the judgment of this Court in
M.S. Poulose v. Varghese [1995 Supp (2) SCC 294].
18. In
a composite document, which has the characteristics of a will as well as a
gift, it may be necessary to have that document registered otherwise that part
of the document which has the effect of a gift cannot be given effect to.
Therefore, it is not unusual to register a composite document which has the
characteristics of a gift as well as a will. Consequently, the mere
registration of document cannot have any determining effect in arriving at a
conclusion that it is not a will. The document which may serve as evidence of
the gift, falls within the sweep of Section 17 of the Registration Act. Where
an instrument evidences creation, declaration, assignment, limitation or
extinction of any present or future right, title or interest in immovable
property or where any instrument acknowledges the receipt of payment of
consideration on account of creation, declaration, assignment, limitation or
extinction of such right, title or interest, in those cases alone the
instrument or receipt would be compulsorily register able under Section 17
(1)(b) or (c) of the Registration Act, 1908. A “will" need not necessarily
be registered. But the fact of registration of a “will" will not render
the document a settlement. Exhibit A-1 was registered because of the composite
character of the document. "
14.1. Thus, the legal position is
well settled. 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. What is not to be forgotten is that 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, we
are of the view that 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.
15. In light of the aforesaid
legal principles, let us examine Ext.A1 document dated 26.06.1985 executed by
Defendant No.1 / father in favour of Respondent No.1 / plaintiff (daughter). It
was categorically stated therein that the suit schedule property belonged to
Defendant No.1/ father and he had been in possession and enjoyment of the same
with full rights. The following statements in the document are important in
determining the nature of the document:
"In
consideration of my love and affection towards you, the schedule below
properties are herein conveyed to you, for your subsistence and for residence
after constructing a house, subject to the conditions herein below. Till my lifetime,
I shall be in possession of the schedule properties and shall take the yields
from it and if necessary I shall have the right to pledge the schedule
properties for a sum not exceeding Rs.2000/- and to avail loan on that basis.
After my lifetime, Janaki Amma, who is my wife and your mother, shall have the
right to possess the property and take income from the property and utilize the
same according to the will and wishes of the said Janaki Amma till the end of
her lifetime and you have no right to restrain the said rights of Janaki Amma
for any reasons. Now onwards, you have every right to make the necessary
constructions in the scheduled property, pay taxes to the Government and obtain
Purchase Certificate for the same. In case of creation of any encumbrances by
me as aforesaid, the same should be cleared by you and I hereby accord my
consent for you to possess and enjoy the scheduled property along with the
usufructuaries situated in it and reside therein by constructing a house after
the lifetime of me and Janaki Amma with all freedom including the rights to
transfer the same. The scheduled property is included in Purchase Certificate
No. 199 and having a value of Rs. 8000/-Rupees Eight Thousand Only including
the above said amount and there is no other encumbrances over the property and
accordingly I hereby assign all the rights and liabilities over the scheduled
property to you after excluding the rights of taking and enjoying the income
from the properties and my right to create encumbrances as aforesaid."
15.1. The above contents of the
document would clearly reveal 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. It is
pertinent to mention here that 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.
15.2. In the present case, the
doubt has arisen in view of three conflicting sentences, namely "In
consideration of my love and affection towards you, the schedule below
properties are herein conveyed to you, for your subsistence and for residence
after constructing a house ", "Now onwards, you have every right to
make the necessary constructions in the scheduled property, pay taxes to the
Government and obtain Purchase Certificate for the same " and " I
hereby accord my consent for you to possess and enjoy the scheduled property along
with the usufructuaries situated in it and reside therein by constructing a
house after the lifetime of me and Janaki Amma with all freedom including the
rights to transfer the same ". Seemingly, the first part affirms the
conveyance in consideration of love and affection. The second part enables the
plaintiff to commence the construction at any time after the execution of the
instrument, confirming that there is an absolute conveyance. We have already
held that reservation of life interest is permissible in a disposition by
settlement and such retention cannot affect the rights already vested. That
apart, the executant has limited his right to mortgage the property only up to
a particular sum and has also permitted the plaintiff to mutate the records.
Though the later part on the first blush would look to be a contradiction, in
reality, it is not. The third part, according to us, is not repugnant to the
earlier part and is only an ancillary clause that qualifies the plaintiff to
reside in the property after the cessation of the life interest of both the
executant and his wife with all freedom including the right of alienation,
which even without any specific mention is likely to happen, in view of the
clear disposition and vesting in the earlier part.
The direction in the third part
enabling the plaintiff to reside in the property is again a qualifying clause.
Even assuming for a moment that the third part is repugnant to earlier part, by
postponing the rights granted earlier until the death of Defendant No.1 and his
wife, the same only has to be discarded or treated as void as per Section 11 of
the Transfer of Property Act and the earlier clause will prevail over the later
clause. At this juncture, it will be useful to refer to the following judgments:
(i) Mauleshwar Mani v. Jagdish
Prasad[(2002) 2 SCC 468 : 2002 SCC OnLine
SC 113]
"10.
In Ramkishorelal v. Kamalnarayan [AIR 1963 SC 890 : 1963 Supp (2) SCR 417] it
was held that in a disposition of properties, if there is a clear conflict
between what is said in one part of the document and in another where in an
earlier part of the document some property is given absolutely to one person
but later on, other directions about the same property are given which conflict
with and take away from the absolute title given in the earlier portion, in
such a conflict the earlier disposition of absolute title should prevail and
the later directions of disposition should be disregarded. In Radha Sundar
Dutta v. Mohd. Jahadur Rahim [AIR 1959 SC 24 : 1959 SCR 1309] it was held where
there is conflict between the earlier clause and the later clauses and it is
not possible to give effect to all of them, then the rule of construction is
well established that it is the earlier clause that must override the later
clauses and not vice versa. In Rameshwar Bakhsh Singh v. Balraj Kuar [AIR 1935
PC 187 : 1935 All LJ 1133] it was laid down that where an absolute estate is
created by a will in favour of devisee, the clauses in the will which are
repugnant to such absolute estate cannot cut down the estate; but they must be
held to be invalid.
11.
From the decisions referred to above, the legal principle that emerges, inter
alia, are:
(1)
where under a will, a testator has bequeathed his absolute interest in the
property in favour of his wife, any subsequent bequest which is repugnant to
the first bequeath would be invalid; and
(2)
where a testator has given a restricted or limited right in his property to his
widow, it is open to the testator to bequeath the property after the death of
his wife in the same will.
12. In
view of the aforesaid principles that once the testator has given an absolute
right and interest in his entire property to a devisee it is not open to the
testator to further bequeath the same property in favour of the second set of
persons in the same will, a testator cannot create successive legatees in his
will. The object behind is that once an absolute right is vested in the first
devisee the testator cannot change the line of succession of the first devisee.
Where a testator having conferred an absolute right on anyone, the subsequent
bequest for the same property in favour of other persons would be repugnant to
the first bequest in the will and has to be held invalid. In the present case
the testator Jamuna Prasad under the will had bequest his entire estate,
movable and immovable property including the land under self-cultivation, house
and groves etc. to his wife Smt Sona Devi and thereafter by subsequent bequest
the testator gave the very same properties to nine sons of his daughters, which
was not permissible. We have already recorded a finding that under the will Smt
Sona Devi had got an absolute estate and, therefore, subsequent bequest in the
will by Jamuna Prasad in favour of the nine daughters' sons was repugnant to the
first bequest and, therefore, invalid. We are, therefore, of the view that once
the testator has given an absolute estate in favour of the first devisee it is
not open to him to further bequeath the very same property in favour of the
second set of persons."
(ii) Sadaram Suryanarayana v.
Kalla Surya Kantham[(2010) 13 SCC 147 :
(2010) 4 SCC (Civ) 812 : 2010 SCC OnLine SC 1198]
"20.
Time now to refer to the provisions of the Succession Act, 1925, Chapter VI
whereof deals with construction of wills. Some of the principles of
interpretation of wills that are statutorily recognised in Chapter VI need
special notice. For instance, Section 84 provides that if a clause is
susceptible of two meanings, according to one of which it has some effect and
according to the other it can have none, the former shall be preferred. So
also, Section 85 provides that no part of a will shall be rejected as destitute
of meaning if it is possible to put a reasonable construction on the same.
21.
Section 86provides that:
"86.
Interpretation of words repeated in different parts of will.—If the same words occur
in different parts of the same will, they shall be taken to have been used everywhere
in the same sense, unless a contrary intention appears. " Section 87 makes
it clear that the intention of the testator shall not be set aside merely
because it cannot take effect to the full extent, and that effect is to be
given to it as far as possible. Section 88 provides that if there are two
clauses of gift in a will, which are irreconcilable, so that they cannot
possibly stand together, the last shall prevail.
22. It
is evident from a careful reading of the provisions referred to above that
while interpreting a will, the courts would as far as possible place an
interpretation that would avoid any part of a testament becoming redundant. So
also the courts will interpret a will to give effect to the intention of the
testator as far as the same is possible. Having said so, we must hasten to add
that the decisions rendered by the courts touching upon interpretation of the
wills are seldom helpful except to the extent the same recognise or lay down a
proposition of law of general application. That is so because each document has
to be interpreted in the peculiar circumstances in which the same has been
executed and keeping in view the language employed by the testator. That indeed
is the requirement of Section 82 of the Succession Act also inasmuch as it
provides that meaning of any clause in a will must be collected from the entire
instrument and all parts shall be construed with reference to each other.
23.
Coming then to the facts of the case at hand it is evident from a careful
reading of Clause 6 of the will extracted above that the same makes an
unequivocal and absolute bequest in favour of the daughters of the testatrix.
The use of words like "absolute rights of sale, gift, mortgage, etc.
" employed by the testatrix make the intention of the testatrix abundantly
clear. The learned counsel for the plaintiff-respondents herein also did not
have any quarrel with the proposition that the testatrix had in no uncertain
terms made an absolute bequest in favour of her daughters. What was argued by
him was that the bequest so made could be treated as a life estate not because
the testament stated so but because unless it is so construed the second part
of Clause 6 by which the female offspring of the legatees would get the
property cannot take effect. It was on that premise contended that the absolute
estate of Smt Sadaram Appalanarasamma ought to be treated only as a life
estate. The contention though attractive on first blush, does not stand closer
scrutiny. We say so because the ultimate purpose of interpretation of any
document is to discover and give effect to the true intention of the executor,
in the present case the testatrix.
24. We
are not here dealing with a case where the testatrix has in one part of the
will bequeathed the property to A while the same property has been bequeathed
to B in another part. Had there been such a conflict, it may have been possible
for the respondent-plaintiffs to argue that the latter bequest ought to take
effect in preference to the former. We are on the contrary dealing with a case
where the intention of the testatrix to make an absolute bequest in favour of
her daughters is unequivocal. Secondly, the expression "after demise of my
daughters the retained and remaining properties shall devolve on their female
children only" does not stricto sensu amount to a bequest contrary to the
one made earlier in favour of the daughters of the testatrix.
25. The
expression extracted above does not detract from the absolute nature of the
bequest in favour of the daughters. All that the testatrix intended to achieve
by the latter part of Clause 6 was the devolution upon their female offspring
all such property as remained available in the hands of the legatees at the
time of their demise. There would obviously be no devolution of any such
property upon the female offspring in terms of the said clause if the legatees
decided to sell or gift the property bequeathed to them as indeed they had
every right to do under the terms of the bequest. Seen thus, there is no real
conflict between the absolute bequest which the first part of Clause 6 of the
will makes and the second part of the said clause which deals with devolution
of what and if at all anything that remains in the hands of the legatees.
26. The
two parts of Clause 6 operate in different spheres, namely, one vesting
absolute title upon the legatees with rights to sell, gift, mortgage, etc. and
the other regulating devolution of what may escape such sale, gift or transfer
by them. The latter part is redundant by reason of the fact that the same was
repugnant to the clear intention of the testatrix in making an absolute bequest
in favour of her daughters. It could be redundant also because the legatees
exercised their rights of absolute ownership and sale thereby leaving nothing
that could fall to the lot of the next generation, females or otherwise. All
told, the stipulation made in the second part of Clause 6 did not in the least
affect the legatees being the absolute owners of the property bequeathed to
them. The corollary would be that upon their demise the estate owned by them
would devolve by the ordinary law of succession on their heirs and not in terms
of the will executed by the testatrix".
(iii) Madhuri Ghosh v. Debobroto
Dutta[(2016) 10 SCC 805 : (2017) 1 SCC
(Civ) 208 : 2016 SCC OnLine SC 1271 at page 809]
"7.
Shri Dhruv Mehta, learned Senior Counsel appearing on behalf of the appellants,
contended before us that first and foremost there was no pleading of life
interest by the defendants and that therefore, this question ought not to have
been raised in the second appeal. He went on to state that it was clear that a
will must first be read as a whole, and if various parts of it appear to
conflict with each other, they ought to be harmoniously construed. In the event
that this cannot be done, then if there is an absolute bequest in an earlier
part of the will, which cannot be reconciled with a subsequent bequest of the
same property in a latter part of the will, the subsequent portion of the will,
will have to be declared as invalid. For this proposition, he cited three
judgments of this Court before us. He also argued that it is well settled that
if a will contains one portion which is illegal and another which is legal, and
the illegal portion can be severed, then the entire will need not be rejected,
and the legal portion can be enforced. He also argued that in any case Section
14 of the Hindu Succession Act, 1956 would come to the rescue even if a life
interest was created in favour of the widow, inasmuch as the deceased had
really provided for her share in the said immovable property in lieu of
maintenance.
11.
However, it remains to consider the argument on behalf of the respondent that
the will should be read as a whole and that the testator's intention should be
given effect so that the grandchildren are "not on the road" as is
argued by the counsel for the respondents. In law, the position is that where
an absolute bequest has been made in respect of certain property to certain
persons, then a subsequent bequest made qua the same property later in the same
will to other persons will be of no effect. This is clearly laid down in
Ramkishorelal v. Kamal Narayan [Ramkishorelal v. Kamal Narayan, 1963 Supp (2)
SCR 417 : AIR 1963 SC 890] as follows: (AIR pp. 893-94, para 12)
"12.
The golden rule of construction, it has been said, is to ascertain the
intention of the parties to the instrument after considering all the words, in
their ordinary, natural sense. To ascertain this intention the court had to
consider the relevant portion of the document as a whole and also to take into
account the circumstances under which the particular words were used. Very
often the status and the training of the parties using the words have to be
taken into consideration. It has to be borne in mind that very many words are
used in more than one sense and that sense differs in different circumstances.
Again, even where a particular word has, to a trained conveyancer, a clear and
definite significance and one can be sure about the sense in which such
conveyancer would use it, it may not be reasonable and proper to give the same
strict interpretation of the word when used by one who is not so equally
skilled in the art of conveyancing. Sometimes it happens in the case of
documents as regards disposition of properties, whether they are testamentary
or non-testamentary instruments, that there is a clear conflict between what is
said in one part of the document and in another. A familiar instance of this is
where in an earlier part of the document some property is given absolutely to
one person but later on, other directions about the same property are given
which conflict with and take away from the absolute title given in the earlier
portion. What is to be done where this happens? It is well settled that in case
of such a conflict the earlier disposition of absolute title should prevail and
the later directions of disposition should be disregarded as unsuccessful
attempts to restrict the title already given. (See Sahebzada Mohammad Kamgarh
Shah v. Jagdish Chandra Deo Dhabal Deb [Sahebzada Mohammad Kamgarh Shah v.
Jagdish Chandra Deo Dhabal Deb, AIR 1960 SC 953], AIR p. 957.) It is clear,
however, that an attempt should always be made to read the two parts of the
document harmoniously, if possible. It is only when this is not possible e.g.
where an absolute title is given is in clear and unambiguous terms and the
later provisions trench on the same, that the later provisions have to be held
to be void. "
12.
This judgment was referred to with approval and followed in Mauleshwar Mani v.
Jagdish Prasad [Mauleshwar Mani v. Jagdish Prasad, (2002) 2 SCC 468] as
follows: (SCC p. 473, paras 9-11)
"9.
The next question that arises for consideration is, the validity of the second
part of the will whereby and whereunder the testator gave the very same
property to nine sons of his daughters.
10. In
Ramkishorelal v. Kamal Narayan [Ramkishorelal v. Kamal Narayan, 1963 Supp (2)
SCR 417: AIR 1963 SC 890] it was held that in a disposition of properties, if
there is a clear conflict between what is said in one part of the document and
in another where in an earlier part of the document some property is given
absolutely to one person but later on, other directions about the same property
are given which conflict with and take away from the absolute title given in
the earlier portion, in such a conflict the earlier disposition of absolute
title should prevail and the later directions of disposition should be
disregarded. In Radha Sundar Dutta v. Mohd. Jahadur Rahim [Radha Sundar Dutta
v. Mohd. Jahadur Rahim, AIR 1959 SC 24] it was held where there is conflict
between the earlier clause and the later clauses and it is not possible to give
effect to all of them, then the rule of construction is well established that
it is the earlier clause that must override the later clauses and not vice
versa. In Rameshwar Bakhsh Singh v. Balraj Kuar [Rameshwar Bakhsh Singh v.
Balraj Kuar, 1935 SCC OnLine PC 41 : AIR 1935 PC 187] it was laid down that
where an absolute estate is created by a will in favour of devisee, the clauses
in the will which are repugnant to such absolute estate cannot cut down the
estate; but they must be held to be invalid.
11.
From the decisions referred to above, the legal principle that emerges, inter
alia, are:
(1)
where under a will, a testator has bequeathed his absolute interest in the
property in favour of his wife, any subsequent bequest which is repugnant to
the first bequeath would be invalid; and
(2)
where a testator has given a restricted or limited right in his property to his
widow, it is open to the testator to bequeath the property after the death of
his wife in the same will. "
13.
Needless to add, it is settled law that the fact that Clause 4 has been
declared by us to be of no effect would not impact the bequest made under
Clause 2, and the rest of the will, therefore, would have to be given effect
to. In view of the aforesaid, we do not deem it necessary to go into the other
questions raised by Shri Dhruv Mehta, learned Senior Counsel, namely, the
absence of pleading and the effect of Section 14 of the Hindu Succession Act,
1956. The appeal is, accordingly allowed and the judgment [Debobroto Dutta v.
Madhuri Ghosh, 2013 SCC OnLine All 13769 : (2013) 6 All LJ 6] of the High Court
is set aside. "
(iv) Bharat Sher Singh Kalsia v.
State of Bihar[(2024) 4 SCC 318 : 2024
SCC OnLine SC 87 at page 327]
"26.
Thus, the Court is required to interpret harmoniously as also logically the
effect of a combined reading of the afore-extracted clauses. As such, our
endeavour would, in the first instance, necessarily require us to render all
three effective and none otiose. In order to do so, this Court would test as to
whether all the three clauses can independently be given effect to and still
not be in conflictwith the other clauses.
32. We
are of the considered opinion that all three clauses are capable of being
construed in such a manner that they operate in their own fields and are not
rendered nugatory. That apart, we are mindful that even if we had perceived a
conflict between Clauses 3 and 11, on the one hand, and Clause 15 on the other,
we would have to conclude that Clauses 3 and 11 would prevail over Clause 15 as
when the same cannot be reconciled, the earlier clause(s) would prevail over
the latter clause (s), when construing a deed or a contract. Reference for such
proposition is traceable to Forbes v. Git [Forbes v. Git, (1922) 1 AC 256 (PC)]
, [ "The principle of law to be applied may be stated in few words. If in
a deed an earlier clause is followed by a later clause which destroys
altogether the obligation created by the earlier clause, the later clause is to
be rejected as repugnant and the earlier clause prevails. In this case the two
clauses cannot be reconciled and the earlier provision in the deedprevails over
the later. Thus, if A covenants to pay 100 l. and the deed subsequently
provides that he shall not be liable under his covenant, that later provision
is to be rejected as repugnant and void, for it altogether destroys the
covenant. But if the later clause does not destroy but only qualifies the
earlier, then the two are to be read together and effect is to be given to the
intention of the parties as disclosed by the deed as a whole." (AC p.
259)(emphasis in original)], as approvingly taken note of by a three-Judge
Bench of this Court in Radha Sundar Dutta v. Mohd. Jahadur Rahim [Radha Sundar
Dutta v. Mohd. Jahadur Rahim, 1958 SCC OnLine SC 38: AIR 1959 SC 24] . However,
we have been able, as noted above, to reconcile the three clauses in the
current scenario. "
16. In the instant case, the
clear and unambiguous language employed in the first part, reveals a clear
disposition by Defendant No. 1/father to the plaintiff, by only retaining a
life interest in the second part. Therefore, the instrument of 1985, according
to us, is a gift by settlement. Ascertainment of the nature of the document is
different from validity. We have already held that Defendant No. 1 was only
holding an ostensible possession by way of life interest. Though, in cases of
settlement, possession is deemed to be transferred along with the title, since
we have held that there is an element of gift in every settlement, we deem it
necessary in the facts of the present case to ponder further and examine,
whether the gift was accepted and acted upon.
17. In this connection, we may
refer to the following decisions, in which the effect of non-acceptance during
the life time of the donor has been discussed: (i) Naramadaben Maganlal Thakker
v. Pranjivandas Maganlal Thakker & Ors[(1997)
2 SCC 255]
"5.
Section 122 of the Transfer of Property Act, 1882 (for short, "the TP
Act") defines 'gift' to mean the transfer of certain existing moveable 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.
6.
Acceptance by or on behalf of the donee must be made during the lifetime of the
donor and while he is still capable of giving.
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. The recitals in
the cancellation deed is consistent with the recitals in the gift deed. He had
expressly stated that the respondent had cheated him and he had not fulfilled
the conditions subject to which there was an oral understanding between them.
Consequently, he mentioned that the conditional gift given to him was
cancelled. He also mentioned that the possession and enjoyment remained with
him during his lifetime. He stated, "I have to execute immediately this
deed of cancelling the conditional gift deed between us. Therefore I hereby
cancel the conditional gift deed dated 15-5-1965 of Rs 9000 in words rupees
nine thousand presented at Serial No. 2153 on 15-5-1965 in the Office of the
Sub-Registrar, Baroda for registration. Therefore, the said conditional gift
deed dated 15-5-1965 is hereby cancelled and becomes meaningless. The property
under the conditional gift has not been and is not to be transferred in your
name ". Thus he expressly made it clear that he did not hand over the
possession to the respondent nor did the gift become complete during the
lifetime of the donor. Thus the gift had become ineffective and inoperative. It
was duly cancelled. The question then is whether the appellant would get the
right to the property? It is not in dispute that after the cancellation deed
dated 9-6-1965 came to be executed, duly putting an end to the conditional gift
deed dated 15-5-1965, he executed his last Will on 17-5-1965 and died two days
thereafter. "
(ii) Khursida Begum (D) by Lrs
vs. Mohammad Farooq (D) by Lrs[C.A. No.
2845-2845/2006]
"17.
...gift of immovable property is not complete unless the donor parts with the
possession and donee enters into possession but if the property is in
occupation of tenants, gift can be completed by delivery of title deed or by
request to tenants to attorn to the done or by mutation. "
(iii) Sarojini Ammav. Velayudha
Pillai Sreekumar[C.A. No 10785/2018]
"14.
Gift means to transfer certain existing moveable or immoveable property
voluntarily and without consideration by one person called the donor to another
called the donee and accepted by or on behalf of the donee as held by the
Supreme Court in Naramadaben Maganlal Thakker Vs. Pranivandas Maganlal Thakker
& Ors. As further held by this Court in Naramadaben Maganlal Thakker
(supra) "It would 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 done becomes
absolute owner of the property.
15. A
conditional gift with no recital of acceptance and no evidence in proof of
acceptance, where possession remains with the donor as long as he is alive,
does not become complete during lifetime of the donor. When a gift is
incomplete and title remains with the donor the deed of gift might be
cancelled.
18. ...
there is no provision in law that ownership in property cannot be gifted
without transfer of possession of such property. However, the conditions
precedent of a gift as defined in Section 122 of the Transfer of Property Act
must be satisfied. A gift is transfer of property without consideration.
19. In
the instant case, admittedly, the deed of transfer was executed for
consideration and was in any case conditional subject to the condition that the
donee would look after the petitioner and her husband and subject to the
condition that the gift would take effect after the death of the donor. We are
thus constrained to hold that there was no completed gift of the property in
question by the appellant to the respondent and the appellant was within her
right in cancelling the deed."
18. The ratio in the above
judgments would have to be applied considering the facts of the case. It is
settled law that delivery of possession is not sine qua non to validate a gift
or settlement. Therefore, for the document to be valid, it is sufficient if it
is proved that the same was acted upon during the life time of the executant.
In the present case, it is 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. This Court in the judgment in Daulat Singh (Supra)
has held that the possession of the gift itself would amount to acceptance. The
plaintiff, when the suit was filed, was in possession of the original title
deed. The stand of the defendants that the plaintiff took away the document
later is unbelievable. Even assuming that the original deed was returned after
registration, the fact that it was already acted upon, cannot be altered. Once
a gift has been acted upon, the same cannot be unilaterally cancelled. As
already held by us, delivery of possession is only one of the methods to prove
acceptance and not the sole method. The receipt of the original document by the
plaintiff and registration of the same, would amount to acceptance of the gift
and the transaction satisfies the requirement of Section 122 of the Transfer of
Property Act, 1882. The creation of life interest with rights to enjoy the
income from the property is a plausible and justifiable reason for the
plaintiff not to reside in the premises. 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.
19. The facts on record also
reveal that the other family members, namely, Defendant Nos.3 and 4 supported
the case of Respondent No. 1/plaintiff cannot be ignored. Furthermore, the
recitals in the document apparently demonstrate and satisfy the requirement to
classify the document as a "settlement".
20. In view of the foregoing
discussion, we find that the 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. However, the High Court rightly set aside the concurrent
judgments of the Courts below by treating the document as settlement in the
judgment impugned herein.
21. Accordingly, this appeal is
dismissed, confirming the judgment passed by the High Court. The parties shall
bear their own costs. Connected Miscellaneous Application(s), if any, shall
stand disposed of.
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