The Scope of Transferability of Possession of Immovable Property

As A Sine Qua Non To Constitue A Valid Gift Deed: A Critical Case Anatomization

This blog is inscribed by Shreyali Yadav.

Introduction

The concept of property occupies a pivotal locus in human life because it is virtually paradoxical to live without the use of material objects, which constitute the subject matter of property rights.The security of property allows people to pursue their enterprise vividly but keeping in mind the restrictions that the laws impose. These laws, in the form of Transfer of Property Act, 1882 (hereinafter as ‘TPA’), comprise of various proprietorial arenas, inclusive of gift deeds, which are deeds in the form of a legal document that describes voluntary transfer of gift from a donor to a done without any monetary favor (consideration) in return[1]. Sections 122 & 123 that predominantly deal with these gift deeds have had a series of litigations governing their true interpretations. The present case, which is Renikuntla Rajamma v. K. Sarwanamma[2]is a likelihood of the aforementioned and is a reference case made in light of two earlier judgments to establish principles over the correct interpretation of the sections.

The back – drop to the process of litigation was that the Appellant, having made a gift deed of a property in favor of the respondent, whilst also reserving the right to enjoy the property during her lifetime, revoked the same. The respondent consequently filed an appeal contending that such revocation was null & void as the gift deed was valid in law and hence, irrevocable. The appellant, in subsequent appeals, contested this by contending that the gift deed was made under fraud, undue influence and misrepresentation. The appeal was dismissed in all instances (Trial & High Court). This present appeal was a final attempt before the Apex Court. Hence, the issue in the present case to be adjudicated upon was whether a transfer of possession of gifted property is an essential requirement for making a valid gift of the immovable property.

Scope Of S. 122 & 123 Of TPA

Conjointly read with S. 122 of TPA, S. 123 states that a gift made by a registered instrument, which is duly signed by or on behalf of the donor and attested by at least two witnesses is valid[3], if the same is accepted by or on behalf of the donee. Furthermore, perusing S. 122 of TPA states that such acceptance must be given during the life – time of the donor and while he is still capable of giving it [4]. Thus, this conjoint reading makes it clear that transfer of possession of the property is not an explicit sine qua non for the making of a valid gift under the provisions of the TPA.

In retrospect, there has also not been any judicial pronouncement that has furthered the implied contention that a property must be transferred in order for it to be a valid gift. Thus, the practical applicability of the aforementioned principles renders the claims of the appellant futile, as all the requisites of a valid gift have been fulfilled, as required by the TPA, and the respondent also accepted the same gift.

Conditional Requisite Of Hindu Law Superseded By Law Under S. 123 Of TPA

Generally, judicial precedents have held that S. 123 of the TPA supersedes the rule of Hindu Law, if there was any making delivery of possession an essential condition[5] for the completion of a valid gift [6]. In the case of Lallu Singh v. Gur Narain and Ors.[7], several decision with regard to the provision of S. 123 have been interpreted to be overruling the Hindu Law requirement of delivery of possession as a condition[8] for making of a valid gift [9], which are further supported by the decisions of the High Court in Revappa v. Madhava Rao and Anr.[10] and in Tirath v. Manmohan Singh andOrs.[11], which take the view that S. 123 supersedes the rules of Hindu Law insofar as such rules required delivery of possession to the done [12]. This does not mean that the Hindu Law as regards validation of gifts stands negated [13]; it simply implies that when it comes to matters of conflict between S. 123 & the Hindu law, S. 123 shall supersede [14], especially in matters concerning the delivery of possession of property for a gift deed [15].

Amendment Of S. 129

The language employed in Section 129 before its amendment gave S. 123 an overriding effect vis-à-vis rules of Hindu Law. This section was amended wherein the words “or, save as provided by Section 123, any rule of Hindu or Buddhist Law” have been deleted and now states that “Nothing in this Chapter relates to gifts of moveable property made in contemplation of death, or shall be deemed to affect any rule of Muhammadan law”. Thus, the law protects only rules of Muhammadan Law from the limitations of Chapter VII relating to gifts. This implies that the provisions of Hindu Law and Buddhist Law prior to its amendment are no longer saved from the overriding effect of Chapter VII. The amendment has made the position more explicit by bringing all other rules of Hindu and Buddhist Law also under the Chapter VII and removing the protection earlier available to such rules from the operation of Chapter VII. Thus, this further effectuates that S. 123 supersedes the rules of Hindu Law insofar as such rules required delivery of possession to the donee.

Legislative Intent: Two – Part Division Of S. 123

S. 123 of the T.P. Act is in two parts. The first part deals with gifts of immovable property while the second part deals with gifts of movable property. Insofar as the gifts of immovable property are concerned, S.123 makes transfer by a registered instrument mandatory. This is evident from the use of word “transfer must be effected“. In contradiction to that requirement, the second part of S. 123 dealing with gifts of movable property, simply requires that gift of movable property may be effectuated either by a registered instrument signed as aforesaid or by delivery. The difference in the two provisions lies in the fact that in so far as the transfer of movable property by way of gift is concerned the same can be effectuated by a registered instrument or by delivery [16]. 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[17].

If the intention of the legislature were to make delivery of possession of the property gifted also as a condition precedent for a valid gift, the provision would have explicitly stated so [18]. Thus, an absence of any such requirement can only lead 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.

Conclusion

In the present case, the execution of registered gift deed and its attestation by two witnesses has been effectuated. It has also been concurrently held by all the three Courts of appeals that the respondent had accepted the gift deed. Furthermore, the recitals in the gift deed also prove transfer of absolute title in the gifted property from the appellant to the respondent. Hence, what was essentially required to validate a gift deed is present and a mere retention of the right to use the property during the lifetime of the donor does not in any way affect the transfer of ownership in favor of the respondent by the appellant.

The Court held in agreement to the fact that transfer of possession of gifted property is not an essential requirement for making a valid gift of the immovable property, and on those grounds, dismissed the appeal of the appellant. Which in fact, under common parlance, seems to hold pragmatic, as there is a separate explicit provision for tangible property to be gifted. A delivery of possession of the property that is to be gifted will not make much a difference wherein the property has been duly gifted to another as per the requisites of S. 123 of the TPA. Even in the present case, all requisites had been fulfilled and the only contention to be answered was whether the fact that the doner was in enjoyment of her rights to the property rendered the whole deed invalid and the answer was held in negative, which was de jure.


[1] Sonia Bhatia v. State of U.P. &Ors., 1981 SCR (3) 239

[2]Renikuntla Rajamma v. K. Sarwanamma, AIR 2014 SC 2906

[3]KuppuswamyChettiar vs A.S. P. A. Arumugam Chettiar And Anr., 1967 AIR 1395

[4] Sonia Bhatia v. State of U.P. &Ors., 1981 SCR (3) 239

[5]Bai Eambai v. Bai Mani (1898) I.L.R. 23 Bom. 234

[6] Alabi Koya v. MussaKoya, (1901) 24 Mad. 513

[7]Lallu Singh v. Gur Narain and Ors., AIR 1922 All. 467

[8]Ballbhadra v. Bhowani, (1907) 34 Cal. 853

[9]Mudhav Rao Moreshvar v. Kashi Bai (1909) 34 Bom. 287

[10]Revappa v. Madhava Rao and Anr, AIR 1960 Mysore 97

[11]Tirath v. Manmohan Singh andOrs, AIR 1981 Punjab and Haryana 174.

[12]Manbhari v. Naunidh (1881) 4 All. 40.

[13]Dharmodas v. NistariniDasi, (1887) 14 Cal. 446.

[14]Balmakund v. Bhagwandas (1894) 16 All. 185.

[15]Phulchand v. Lakkhu (1903) 25 All. 358.

[16]AtmaramSakharamKalkye vs Vaman Janardan Kashelikar, (1925) 27 BOMLR 290

[17]The State of West Bengal vs Subodh Gopal Bose And Others, 1954 AIR 92

[18]Saraswathi Ammal v. Minor, 2014 – 5 – LW 260

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