“‘Delivery of Possession Is Not Sine Qua Non to Validate a Gift’; Gift Once Acted Upon Cannot Be Cancelled Unilaterally: Supreme Court”
Safiya Malik
The Division Bench of the Supreme Court comprising Justice J.B. Pardiwala and Justice R. Mahadevan upheld a 2019 decision of the High Court of Kerala, declaring a registered document dated 26 June 1985 as a valid settlement deed. The Court dismissed an appeal filed against the High Court’s interpretation, stating that “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 Bench recorded that “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.” It held that the subsequent sale deed executed in 1993 by the father in favour of the appellant, the plaintiff’s brother, was invalid.
The dispute originated from a family property transaction in Cherthala, Kerala. The plaintiff, Respondent No.1, filed Original Suit No. 27 of 1994 before the Sub Court, Cherthala, seeking a declaration of her right, title, and interest over the suit schedule property based on a registered document dated 26 June 1985 (Ext.A1), executed by her father (Defendant No.1). She further sought a declaration that the cancellation deed and sale deed dated 19 October 1993 (Ext.A2 and Ext.A3), executed in favour of her brother (the appellant), were null and void.
The plaintiff contended that the property was transferred to her as a gift under a registered deed. She submitted that possession had been delivered constructively, and she had accepted the gift during her father’s lifetime by registering the document. It was also her case that the gift was acted upon and could not have been revoked.
The appellant, Defendant No.2, argued that the 1985 document was not a gift but a Will. It was his contention that the disposition was not in praesenti and that the father retained possession and ownership until death. He relied on various precedents to assert that the document did not create a vested interest in the plaintiff during the lifetime of the executant.
The trial court, by judgment dated 28 May 2001, accepted the contention that the document was a Will and dismissed the suit. The First Appellate Court, by judgment dated 20 December 2003, concurred with the trial court. The plaintiff filed R.S.A. No.1338 of 2004 before the High Court of Kerala, which by judgment dated 10 June 2019, held the document to be a settlement deed and granted the declaratory reliefs. The appellant challenged the High Court’s interpretation before the Supreme Court.
The Court examined the nature of gift, settlement, and Will under relevant statutory provisions including the Transfer of Property Act, Indian Succession Act, Registration Act, and Stamp Act.
The Court noted: “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.”
It explained 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.”
Referring to settlement, the Court recorded: “A settlor is entitled to reserve a life interest either upon himself or upon others and impose any condition... breach of any condition in the settlement, would then render the settlement void.”
The Court examined distinctions between gift, settlement, and Will, stating that “while a Will is revocable and takes effect after the death of the testator, a settlement or gift effects an immediate transfer.”
In assessing the specific document executed on 26 June 1985, the Court stated: “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 judgment quoted the operative portion 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...”
The Court observed that although the document reserved life interest and permitted the father and mother to enjoy income from the property during their lifetimes, it also stated: “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.”
Regarding this, the Court stated: “The postponement of delivery by creation of life interest is not an anathema to absolute conveyance in praesenti.”
On the conflicting clauses regarding right of residence and enjoyment, the Bench stated: “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.”
Discussing the legal standard for acceptance of a gift, the Court stated: “Acceptance can be inferred by the implied conduct of the donee. The fact that possession had been given to the donee also raises a presumption of acceptance.” Citing precedent, the Court noted: “Possession of the gift deed itself would amount to acceptance.”
Applying these principles, the Court found: “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.” It added: “The factum of acceptance can be derived from the conduct of the parties.”
The Bench rejected the contention that the plaintiff later took the document from the father, stating: “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.”
It continued: “Even assuming that the original deed was returned after registration, the fact that it was already acted upon, cannot be altered.” Concluding on the issue of cancellation, the Court held: “Once a gift has been acted upon, the same cannot be unilaterally cancelled.”
It reiterated the legal position: “Delivery of possession is only one of the methods to prove acceptance and not the sole method.” It stated that: “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.”
Regarding the plaintiff's non-residence, the Court held: “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.”
The Court concluded that the father could not cancel the gift deed unilaterally: “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.”
It stated: “The reasons for cancellation or revocation of gift have to be proved in a court of law.” Hence, “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.”
The Court recorded: “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.”
On the recitals of the deed, the Court recorded: “The recitals in the document apparently demonstrate and satisfy the requirement to classify the document as a ‘settlement’.”
It concluded: “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.” It stated: “The High Court rightly set aside the concurrent judgments of the Courts below by treating the document as settlement in the judgment impugned herein.”
The Court issued the following order: “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.”
Advocates Representing the Parties
For the Petitioners: Senior Advocate V. Chitambaresh, AOR Karthik S.D., and Advocate C. Govind Venugopal.
For the Respondents: Senior Advocate P.V. Dinesh, AOR Zulfiker Ali P. S., Advocates Anna Oommen, Syed Nazarat Fatima, and Lebina Baby.
Case Title: N.P. Saseendran v. N.P. Ponnamma & Ors.
Neutral Citation: 2025 INSC 388
Case Number: Civil Appeal No. 4312 of 2025 (Arising out of SLP (C) No. 698 of 2023)
Bench: Justice J.B. Pardiwala and Justice R. Mahadevan
[Read/Download order]
