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Synopsis

The Supreme Court has said that the gift validly made can be suspended or revoked under certain contingencies but ordinarily, it cannot be revoked, more particularly when no such right is reserved under the gift deed.

A bench of Justices Pankaj Mithal and Ujjal Bhuyan made a reference to the provisions of Section 126 of the Transfer of Property Act, 1882, which provides that a gift cannot be revoked except for certain contingencies enumerated therein.

The bench pointed out that Section 126 of the Act is drafted in a peculiar way in the sense that it contains the exceptions to the substantive law first and then the substantive law. 

It said that the substantive law as is carved out from the simple reading of the provision is that a gift cannot be revoked except if the donor and donee may agree for the suspension or revocation of the gift deed on the happening of any specified event which does not depend on the will of the donor. Secondly, a gift which is revocable wholly or in part with the agreement of the parties, at the mere will of the donor is void wholly or in part as the case may be. Thirdly, a gift may be revoked if it were in the nature of a contract which could be rescinded. 

The apex court found no reason to interfere with the Madras High Court and the appellate court's orders decreeing the suit of the plaintiff-respondent about a suit property.

Tamil Nadu Khadi and Village Industries Board instituted a suit for declaration of its title over the suit property measuring about 3750 square feet situated in District Cuddalore and for recovery of its possession. The suit was filed on the basis of a registered gift deed of March 05, 1983, allegedly executed by the defendant-appellant N Thajudeen which was said to have been accepted by the plaintiff-respondent.

The suit was dismissed by the trial court by its judgment in 1994 primarily on the ground that the alleged gift deed was not valid as it was never accepted and acted upon. 

Aggrieved by the decision, the plaintiff-respondent preferred an appeal before the district judge which was allowed in 1997. 

Then, the appellate court reversed the judgment and order of the court of first instance and decreed the suit. The second appeal filed by the defendant-appellant was dismissed in 2011 by the High Court. In decreeing the suit, the gift was held to be valid with a finding that it was acted upon and accepted and as such in the absence of any clause in the gift deed authorizing revocation, it could not have been revoked as alleged by the evocation deed in 1987. 

The court noted that a simple and complete reading of the gift deed revealed that the gift was absolute with no right reserved for its revocation in any contingency. The only purpose stipulated was that the property gifted shall be used for manufacturing Khadi Lungi and Khadi Yarn etc.

The gift deed itself states that from the date of the gift deed the suit property is accepted by the plaintiff-respondent for the purpose of manufacturing Khadi Lungi and Khadi Yarn etc, which duly proves that the gift was accepted, court noted. 

It was also acted upon as pursuant thereof the plaintiff-respondent had applied for mutation to the revenue authorities. In addition, the plaintiff-respondent issued a memo in 1983, which also proves that the possession of the suit property was taken over and that it proceeded to raise construction thereon, the court pointed out. 

"In view of the findings recorded by the first appellate Court and the High Court that the gift deed was duly acted upon and accepted by the plaintiff respondent, the conclusion is that the said gift deed cannot be held to be invalid for want of acceptance. Thus, on the basis of the aforesaid gift deed, the plaintiff-respondent acquired absolute right and title over the suit property," the bench said.

In the instant case, the court also noted that none of the exceptions permitting revocation of the gift deed stood attracted here. Thus, leading to the only conclusion that the gift deed, which was validly made, could not have been revoked in any manner. Accordingly, revocation deed of 1987 is void ab initio and is of no consequence which has to be ignored, the bench said.

"The non-utilisation of the suit property for manufacturing Khadi Lungi and Khadi Yarns etc, the purpose set out in the gift deed, and keeping the same as vacant may be a disobedience of the object of the gift but that by itself would not attract the power to revoke the gift deed. There is no stipulation in the gift deed that if the suit property is not so utilised, the gift would stand revoked or would be revoked at the discretion of the donor," the bench said.

The appellant also raised an argument that the suit as filed by the plaintiff-respondent was hit by limitation and as such the first appellate court and the High Court manifestly erred in decreeing it.

The bench, however, said, "Once it is held that the gift deed was validly executed resulting in the absolute transfer of title in favour of the plaintiff-respondent, the same is not liable to be revoked, and as such the revocation deed is meaningless especially for the purposes of calculating the period of limitation for instituting the suit."

Referring to C Mohammad Yunus Vs Syed Unnissa And Ors (1961), the bench said, in fact, a suit for a declaration of title to immovable property would not be barred so long as the right to such a property continues and subsists. When such right continues to subsist, the relief for declaration would be a continuing right and there would be no limitation for such a suit. The principle is that the suit for a declaration for a right cannot be held to be barred so long as Right to Property subsist.

"Even otherwise, though the limitation for filing a suit for declaration of title is three years as per Article 58 of the Schedule to the Limitation Act but for recovery of possession based upon title, the limitation is 12 years from the date the possession of the defendant becomes adverse in terms of Article 65 of the Schedule to the Limitation Act. Therefore, suit for the relief of possession was not actually barred and as such the court of first instance could not have dismissed the entire suit as barred by time," the bench said.

The court, accordingly, dismissed the appeal as devoid of merit. 

Case Title: N Thajudeen Vs Tamil Nadu Khadi And Village Industries Board