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Synopsis

The Supreme Court has said that it is not always necessary that settlement deed among the family members would always be out of some monetary consideration as it can be in some other forms as well.

A bench of Justices C T Ravikumar and Sanjay Karol set aside a Madras High Court's judgment of April 22, 2009, overturning the judgment and decree passed by a subordinate judge in 2001 and confirmed by Additional District court cum Chief Judicial Magistrate in 2003 with regard to a settlement deed effected in 1963 in favour of Govindammal giving her 2/3 rd share of the suit property.

The court primarily examined the issue of whether the deed executed, which gave rise to the present property dispute, was a gift deed or a deed of settlement.

"The dispute hinges on whether the deed executed granting Govindammal 2/3rd share of the property is a gift deed or a settlement deed. In making such a determination, it is imperative to examine the meaning of ‘gift’ and ‘settlement’," the bench said.

The court pointed out that 'gift' has been defined in the Transfer of Property Act while settlement has been defined in the Indian Stamp Act.

In the case, the High Court held that the deed executed was in fact a gift deed.

"The primary reason for the High Court in holding that the deed in question was in fact a gift deed and not one of settlement, is that it found that the element of ‘adequate consideration’ was missing and instead, the transfer was effected out of love and affection for Govindammal," the bench noted.

The court opined that the provision 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, the bench said, referring to the contents of the deed.

"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," the bench said.

Referring to the principles regarding the exercise of jurisdiction under Section 100 of the Code of Civil Procedure, 1908, the bench said that a substantial question of law is sine qua non for the maintainability of a second appeal.

"In our considered view, none of the aspects of the provision appear to be met in this case, justifying the High Court’s overturning of concurrent findings. Govindammal (now her heirs) is indeed entitled to 2/3rd share in the property," the bench said, allowing the appeal.

As facts of the matter, one Balu Reddy was survived by his three sons viz, Venkatarama Reddy, Venkata Reddy alias Pakki Reddy and Chenga Reddy. They enjoyed the property in question as coparceners to Hindu joint family property. 

The first of the three siblings, Venkatarama Reddy died leaving behind his son Markandeya Reddy as legal heir; the second, Venkata Reddy alias Pakki Reddy died leaving behind his daughter Govindammal as legal heir; and the third brother Chenga Reddy died issueless, with each of them having 1/3rd share in the undivided property. Chenga Reddy transferred his share in favour of Govindammal in the year 1963 by way of a settlement deed on May 5, 1963. 

Thereafter, Govindammal enjoyed uninterrupted possession of the property to the extent of 2/3rd. In 1986 the original settlement deed in favour of Govindammal was given to Markandeya Reddy to bring into effect the 2/3rd share of Govindammal in the official records since at that time no partition by metes and bounds was effected and without prejudice to their rights, they had been cultivating random, separate portions of the land. 

Such change was, allegedly never effected and neither were the documents returned to her. As such the suit for partition was filed on March 30, 1995.

Case Title: Ramchandra Reddy (Dead) Thr LRs & Ors Vs Ramulu Ammal (Dead) Thr LRs