CANCELLATION OF GIFT DEED IN INDIA.

A gift deed cannot be revoked or cancelled once it is executed and register unless the requirement of section 126 of the transfer of property Act 1882 are fulfilled.

Revocation of a gift deed

Section 126 of the Transfer of Property Act (1882) deals with the suspension or revocation of a gift deed. This Section lays down two modes of revocation namely, revocation by mutual agreement and revocation by rescission. 

As per the former approach, a gift deed may be suspended or revoked on the happening of an uncertain event that is not within the donor’s scope. Here, the gift deed is not revoked solely on the donor’s will. The condition of revoking the gift in such circumstances should be expressed and not implied. 

Registered Gift Deed can’t be unilaterally cancelled by Donor without consent of the Donee. Andhra Pradesh High court recently ruled that unilateral cancellation of registered gift deed by donor does not affect the rights of the done as it is the law under Registration Act. 

A Gift Deed cannot be cancelled unless the donor has obtained the same through either by Fraud, Coercion, misrepresentation or undue influence from the donor. 

gift deed can be cancelled by filing a cancellation suit on the following grounds:

1. Mutual consent of both parties regarding cancellation.

2. Deed was not made by free consent i.e. was made due to coercion, fraud, misrepresentation, undue influence, or mistake.

3. Donee failed to accept the gift.

4. Forgery of Gift Deed.

5. Failure or want of consideration like non-fulfillment of promise to take care of donor by donee.

6. Gift Deed unregistered.

7. Stamp duty not properly paid

8. Gift Deed not properly attested.

9. Gift Deed not signed by Donor.

10. Gift is regarding future property.

11. Gift by Minor.

12. One of the Donees not accepted Gift Deed.

13. Gift not accepted during Donor’s life.

14. Deed contains a clause which obstructs the transfer of ownership to Donee.

A party to the gift deed can get the gift deed cancelled by filing a Cancellation Suit with nominal court fees. In case any other person who is not the party to the Deed wants to declare that gift deed is invalid, he has to file a Declaration Suit. The time limit to get the Gift Deed cancelled or set aside is three years from the date when a person who wants to get the deed cancelled (plaintiff) get to know about the fact entitling him to have the gift deed cancelled or set aside as per Article 59 of Limitation Act, 1963. In case of failure to file a suit within 3 years, an application for condonation of delay can be filed as per Section 5 of Limitation Act to get the delay excused for filing a suit.


Section 126 of the Act provides the legal provisions which must be followed in case of a conditional gift. The donor may make a gift subject to certain conditions of it being suspended or revoked and these conditions must adhere to the provisions of Section 126. This Section lays down two modes of revocation of gifts and a gift may only be revoked on these grounds.

Revocation by mutual agreement

Where the donor and the donee mutually agree that the gift shall be suspended or revoked upon the happening of an event not dependent on the will of the donor, it is called a gift subject to a condition laid down by mutual agreement. It must consist of the following essentials:

  • The condition must be expressly laid down
  • The condition must be a part of the same transaction, it may be laid down either in the gift-deed itself or in a separate document being a part of the same transaction.
  • The condition upon which a gift is to be revoked must not depend solely on the will of the donor.
  • Such condition must be valid under the provisions of law given for conditional transfers. For eg. a condition totally prohibiting the alienation of a property is void under Section 10 of the Transfer of Property Act.
  • The condition must be mutually agreed upon by the donor and the donee.
  • Gift revocable at the will of the donor is void even if such condition is mutually agreed upon.

Revocation by the rescission of the contract

Gift is a transfer, it is thus preceded by a contract for such transfer. This contract may either be express or implied. If the preceding contract is rescinded then there is no question of the subsequent transfer to take place. Thus, under Section 126, a gift can be revoked  on any grounds on which its contract may be rescinded. For example, Section 19 of the Indian Contract Act makes a contract voidable at the option of the party whose consent has been obtained forcefully, by coercion, undue influence, misrepresentation, or fraud. Thus, if a gift is not made voluntarily, i.e., the consent of the donor is obtained by fraud, misrepresentation, undue influence, or force, the gift may be rescinded by the donor.

The option of such revocation lies with the donor and cannot be transferred, but the legal heirs of the donor may sue for revocation of such contract after the death of the donor.

The limitation for revoking a gift on the grounds of fraud, misrepresentation, etc, is three years from the date on which such facts come to the knowledge of the plaintiff (donor).

The right to revoke the gift on the abovementioned grounds is lost when the donor ratifies the gift either expressly or by his conduct.

Bonafide purchaser

The last paragraph of Section 126 of the Act protects the right of a bonafide purchaser. A bonafide purchaser is a person who has purchased the gifted property in good faith and with consideration. When such a purchaser is unfamiliar with the condition attached to the property which was a subject of a conditional gift then no provision of revocation or suspension of such gift shall apply.

Exceptions

Section 129 of the Act provides the gifts which are treated as exceptions to the whole chapter of gifts under the Act. These are:

·         Donations mortis causa

These are gifts made in contemplation of death.

·         Muslim-gifts (Hiba)

These are governed by the rules of Muslim Personal Law. The only essential requirements are declaration, acceptance and delivery of possession. Registration is not necessary irrespective of the value of the gift. In case of a gift of immovable property worth more than Rupees 100, Registration under Section 17 of the Indian Registration Act is must, as it is applicable to Muslims as well. For a gift to be Hiba only the donor is required to be Muslim, the religion of the donee is irrelevant.

Chathampalli Kally Janu vs Chathampalli Kally Vineetha on 21 August, 2017

JUDGMENT

This second appeal arises out of the Judgment and Decree dated 12.09.2013 made in A.S.No.103 of 2006 passed by the learned II Additional District Judge, Pondicherry reversing the Judgment and decree dated 17.10.1995 passed by the learned Subordinate Judge, Mahe in O.S.No.15 of 1994.

2. Brief facts of the plaintiffs’ case is as follows:- The plaintiffs 1 and 2 are children of Chathambally Kally Chappila, who died on 17.10.1986. The plaintiffs 3 and 4 are grand children of the said Chappila by Chappila’s daughter Devi, who predeceased Chappila in the year 1974. They have been living in their husband’s house since their marriage. The suit property originally http://www.judis.nic.in belongs to one Chappila as per Kuzhikana Marupattam deed dated 14.01.1945 granted by Pandokkav Ayyappan Devasom. Thereafter, she was in possession and enjoyment of the suit schedule property. In the month of March,1983, she expressed her desire to gift the property to all her children and the children of deceased Devi reserving herself the right to take usufructs till her death. When the desire was expressed by Chappilla, the husband of the second defendant Krishnan and son of first defendant Dasan, agreed to arrange the execution of necessary documents. Then the document was registered on 11.04.1983, but possession of the property remaining with Chappila, who is the illiterate women. In the month of December,1983, while Chappilla wanted to make payment of dues as per Kuzhikana Marupattam lease. At that time, the second defendant’s husband informed the Chappilla that she however made gift the properties to the first defendant, they alone have to pay the lease amount and not Chappilla. Then only Chappilla realised that she had been made to give out right gift only to the defendants without reserving her rights. As she protested on the intervention of madiatoners with the knowledge of plaintiff and defendants, it was decided to cancel the above said gift deeds and to execute a fresh gift deed in favour of all children. Accordingly, on 11.04.1983, the earlier gift deeds were cancelled and http://www.judis.nic.in fresh deed was executed on 26.12.1983. Thereafter, in 1994, an application in O.A.No.173 of 1984 J was filed before the Land Tribunal, Mahe to purchase the landlords rights by all the doners. But, minor children were represented by their guardian, the second plaintiffs herein. The defendants contrary to the understanding reached claiming themselves to be in possession on the basis of earlier gift deed executed in their favour made separate application in O.A.No.105/84 J and O.A.No.106/84 J. Both the applications were dismissed by the Land Tribunal, Mahe. Aggrieved over the same, the defendants herein filed the appeal in A.A.No.1/1990 and the appellate Authority, Mahe remanded the applications with direction to the Land Tribunal to hear and disposed of all the three applications in O.A.Nos.105/84 J, O.A.No.106/84 J and O.A.No.173/84 J together. Accordingly, the Land Tribunal, Mahe, took up all the three applications together and allowed O.A.No.173/84 J, while dismissing the other O.A.No.105/84 J and 106/84 J filed by the defendants. Aggrieved over the said findings, the defendants filed AA.No.1/1990 and Appellate Authority reverse the order of the Land Tribunal and allowed the applications in O.A.N.105/84 J and O.A.No.106/84 J of the defendants. Challenging the same, the plaintiff preferred the revision in CRP.No.3043/1993 before this Court. Which dismissed the revision petition with the http://www.judis.nic.in direction to seek remedy before the proper Court of pecuniary jurisdiction. The plaintiffs states that the suit property belongs to all the plaintiffs and the defendants and they are in joint possession. The earlier gift deeds in favour of the plaintiffs was not acted upon. As the plaintiffs are not interested in joint possession have come forward with the suit seeking partition of 3/5th share in the suit. Hence, the plaintiffs seek to entertain the suit.

3.The case of the defendant is that the defendants did not sign in O.A.No.173/84 J application. The earlier Gift Deeds in favour of the defendants were acted upon and the final order passed in O.A.No.105/84 J and O.A.No.106/84 J are valid. The defendants did not give their consent for cancellation of the gift deed. The possession of the property is with the defendants from 11.04.1983. The gift deed in favour of the defendants were executed as per the wish and desire of said Chappila in 1993. The mutation of name in the revenue records was not effected due to objections raised by the plaintiffs. The claim of the plaintiffs that Chappila executed the cancellation deed and subsequent gift deed is not true and the said documents should have been created by the plaintiffs with the assistance of the first plaintiff’s husband. The cancellation deed and subsequent gift deed could have http://www.judis.nic.in been obtained when Chappila was not in a sound disposing state of mind. The defendants states that the plain reading of the cancellation deeds will show that the delivery of possession of the property was effected simultaneous, the execution of gift deed No.172/83 and 173/83 dated 11.04.1983. The defendants have purchased the land lords right also as per purchase certificate No.2/94 and 3/94 and perfected their title. The conclusion of the High Court in CRP.No. 3043/1993 does not give any right to the plaintiff to file a suit and the relief sought for by them. The plaintiff has come forward with the suit, the order passed in O.A.No.105/84 J and O.A.No.106/84 J has become final. The suit is barred by limitation. The Court fee paid is not correct. The plaintiffs are not in possession and they are liable to pay the Court Fee under Section 37(I) of Pondicherry Court Fee & S.V. Act. Thus, the defendants sought for dismissal of the suit.

5. At the time of admission, the following substantial question of law was framed by this Court for consideration.

4. Before the Trial Court, the plaintiffs examined P.W.1 and documents Ex.A1 to Ex.A7 produced to prove their claim. On the side of the defendants, they examined D.W.1 and produced documents Ex.B1 to Ex.B5. On the basis of the same, after contest, the trial Court dismissed the suit. Aggrieved upon that the plaintiffs preferred the first appeal before the lower appellate Court. After contest, the http://www.judis.nic.in lower appellate Court allowing the appeal by setting aside the findings of the trial Court and decreed the suit. Aggrieved upon that the defendants preferred the second appeal.

1) Whether the Court below is right in reversing the well considered findings of the trial Court without giving effect to the provisions of Section 122 and 123 of the Transfer of Property Act that when once the gift is executed and accepted, the same cannot be revoked?

2. Whether the Court below is right in reversing the well considered findings of the trial Court without giving effect to Section 126 of the Transfer of Property Act that only under certain circumstances a gift can be revoked and otherwise the gift cannot be revoked?

3. Whether the Court below in right in reversing the well considered findings of the trial Court, without giving effect to the provision of Section 68 of the Indian Evidence Act that the necessity of examining the attesting witness will arise only in case of execution of the document by the person by whom it purports to have been executed is specifically denied?

http://www.judis.nic.in

6.The learned counsel appearing for the appellants/ defendants would contend that the first appellate Court failed to consider the provisions under Sections 122 to 126 of Transfer of Property Act regarding the revocation of the gift deeds and gave a finding in contrary to the provisions under Section 126 of the Transfer of Property Act. The Courts below ought to have seen that Chattampally Chappila had gifted the property to the original defendants 1 and 2, namely, Chattampally Mathu and Chathampally Janu on 11.04.1983 under Ex.B2 and Ex.B3. The conclusion of the lower appellate is that Section 68 of the Indian Evidence Act was not followed and on that ground reversed the finding of the trial Court. The said finding is not proper as the gift deed Ex.A2 and Ex.A3 are not denied by the plaintiffs and they admitted the same. As such, there is no need or necessity to prove the execution of the same. Thus, the conclusion of the lower appellate Court invoking Section 68 of the Indian Evidence Act and the finding given on that basis is unwarranted. It is also pointed out that the plaintiffs never pleaded fraud or misrepresentation in execution of Ex.A2 and Ex.A3. As such the conclusion of the lower appellate Court, on that ground also is not proper. The finding of the lower appellate Court that the gift deeds itself were not acted upon is not proper. The lower appellate Court also http://www.judis.nic.in failed to see the gift deed executed cannot be cancelled unilaterally and the gift deed effected as per the recitals of the document and the cancellation deed Ex.A4 and Ex.A5 cannot be valid documents. Thus, the appellants contend that the reasoning of the first appellate Court to reverse the findings of the trial Court is not proper and the same is to be set aside.

7.Per contra, the learned counsel for the respondents would submit that the conclusion of the lower appellate Court is appropriate and the same is based on proper appreciation of oral and documentary evidence available on record. It is contended that there is no infirmity in the findings of the lower appellate Court. Thus, the respondents seek dismissal of the appeal.

8. I have heard the rival submissions and also perused the materials available on record.

9. On perusal, it is clear that one Chappilla executed the Gift Deeds Ex.A2 and Ex.A3. Subsequently, she had cancelled the same through Ex.A4 and Ex.A5 and executed fresh Gift Deed Ex.A6. That gave the cause of action for this suit. According to the defendants, http://www.judis.nic.in Ex.A2 and Ex.A3 which was executed in their favour alone was prevail and the suit will not lie. Before going to the merits of the case, we have to see the relevant provisions Section 122 to 126 of the Transfer of Property Act relating to gift deed. Section 126 of the Transfer of Property Act, 1882 is as follows:-

“Section 126 When gift may be suspended or revoked. The donor and donee may agree that on the happening of any specified event which does not depend on the will of the donor a gift shall be suspended or revoked; but a gift which the parties agree shall be revocable wholly or in part, at the mere will of the donor, is void wholly or in part, as the case may be.

A Gift may e revoked in any of the cases (save want or failure of consideration) in which, if it were a contract, it might be rescinded.

References

  1. https://www.lawyersnjurists.com/article/discuss-the-concept-of-gift-under-the-transfer-of-property-act/
  2. https://www.latestlaws.com/articles/all-about-lease-and-gift-under-transfer-of-property-act-1882-by-ayushi-modi/

 Click Here to know more about our Upcoming Courses

Aishwarya Says:

I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.

IF YOU ARE INTERESTED IN PARTICIPATING IN THE SAME, DO LET ME KNOW.

Do follow me on FacebookTwitter  Youtube and Instagram.

The copyright of this Article belongs exclusively to Ms. Aishwarya Sandeep. Reproduction of the same, without permission will amount to Copyright Infringement. Appropriate Legal Action under the Indian Laws will be taken.

If you would also like to contribute to my website, then do share your articles or poems at secondinnings.hr@gmail.com

In the year 2021, we wrote about 1000 Inspirational Women In India, in the year 2022, we would be featuring 5000 Start Up Stories

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Create a website or blog at WordPress.com

Up ↑

%d bloggers like this: