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Ordinarily, A Gift Deed Cannot Be Revoked

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On 24.10.2024, a Division Bench of the Supreme Court of India in Civil Appeal No. 6333 of 2013 titled N. Thajudeen Vs. Tamil Nadu Khadi And Village Industries Board has decided on a substantial question of law relating to the suspension and revocation of a gift deed, wherein, the Respondent instituted a suit for declaration of its title over the suit property i.e. a piece of land and for recovery of its possession on the basis of a registered gift deed dated 05.03.1983 allegedly executed by the Appellant which was said to have been accepted by the Respondent. The suit was dismissed by the Trial Court primarily on the ground that the alleged gift deed was not valid as it was never accepted and acted upon. Aggrieved by the aforesaid decision, the Respondent preferred an appeal before the DJ which was allowed. The second appeal filed by the Appellant was dismissed by the HC and 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upon and accepted and as such in the absence of any clause in the gift deed authorizing revocation, it could not have been revoked as alleged vide a revocation deed 

Issue

Whether the registered gift deed was duly acted upon and accepted and is a valid document that continues to exist despite its revocation as the donor had not reserved the right to revoke the same. 


The SC observed that a simple and complete reading of the gift deed would reveal that the gift is absolute with no right reserved for its revocation in any contingency. The only purpose stipulated therein is 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 Respondent for the purpose of manufacturing Khadi Lungi and Khadi Yarn etc., which duly proves that the gift was accepted. It was also acted upon as pursuant thereof the Respondent had applied for mutation to the revenue authorities. In addition to the above, the Respondent issued a memo on 16.09.1983 which also proves that the possession of the suit property was taken over and that it proceeded to raise construction thereon, and therefore, the SC held 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 Respondent acquired absolute right and title over the suit property.


Whether the aforesaid gift deed has been validly revoked vide revocation deed, and if so, what would be its impact upon the rights of the Respondent in respect of the suit property?

Section 126 of the TPA provides that a gift cannot be revoked except in the following three cases:

a. The donor and donee may agree to 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.

b. A gift that 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. 

c. A gift may be revoked if it were in the nature of a contract which could be rescinded.


The SC observed and held that ordinarily, a gift deed cannot be revoked except for the three contingencies. The first is where the donor and the donee agree to its revocation on the happening of any specified event. In the gift deed, there is no such indication that the donor and donee have agreed to the revocation of the gift deed for any reason much less on the happening of any specified event. Therefore, the first exception permitting revocation of the gift deed is not attracted in the case at hand. Secondly, a gift deed would be void wholly or in part, if the parties agree that it shall be revocable wholly or in part at the mere will of the donor. In the present case, there is no agreement between the parties for the revocation of the gift deed wholly or in part or at the mere will of the donor. Therefore, the aforesaid condition permitting revocation or holding such a gift deed to be void does not apply. Thirdly, a gift is liable to be revoked in a case where it is in the nature of a contract which could be rescinded. The gift under consideration is not in the form of a contract and the contract, if any, is not liable to be rescinded. Thus, none of the exceptions permitting revocation of the gift deed stands attracted in the present case. Thus, leading to the only conclusion that the gift deed, which was validly made, could not have been revoked in any manner. Accordingly, the revocation deed dated 17.08.1987 is void ab initio and is of no consequence which has to be ignored.


The SC further held that 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 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 utilized, the gift would stand revoked or would be revoked at the discretion of the donor. 


Barred by limitation 

It was argued by the Appellant that the suit as filed by the Respondent is hit by limitation and as such the first appellate court and the High Court manifestly erred in decreeing the same. 


The SC observed and held that admittedly, the present suit for declaration and recovery of possession of the suit property was filed by the Respondent on 25.09.1991. The court of first instance held that as the same was not filed within three years from the date of revocation of the gift deed, i.e., 17.08.1987, the suit is barred by limitation. Once it is held that the gift deed was validly executed resulting in the absolute transfer of title in favour of the 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.


In the case at hand, the suit is not simply for the declaration of title rather it is for further relief for recovery of possession. It is to be noted that when in a suit for declaration of title, further relief is claimed in addition to mere declaration, the relief of declaration would only be an ancillary one and for the purposes of limitation, it would be governed by the relief that has been additionally claimed. The further relief claimed in the suit is for recovery of possession based upon title and as such its limitation would be 12 years in terms of Article 65 of the Schedule to the Limitation Act. 


(Ref. C. Mohammad Yunus vs. Syed Unnissa And Ors, AIR 1961 SC 808)

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