A Gift Deed Cannot be Revoked, Once Accepted: Supreme Court

Recently, the Supreme Court (SC) of India observed that a gift deed cannot be revoked, once accepted. The two-judge bench of the SC constituting Justice Ujjal Bhuyan and Justice Pankaj Mithal opined “...a gift is liable to be revoked in a case where it is in the nature of a contract which could be rescinded.” In this case, the plaintiff-respondent instituted a suit for declaration of its title over the suit property and for recovery of its possession. The said suit was filed on the basis of a registered gift deed, March 05, 1983, allegedly executed by the defendant-appellant which was said to have been accepted by the plaintiff-respondent. The suit was dismissed by the Trial Court on August 23, 1994, 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 plaintiff-respondent preferred an appeal before the District Judge which was allowed vide Judgment and order on August 05, 1997. The appellate Court reversed the judgment and order of the court of first instance and decreed the suit.

Further on January 11, 2011, the High Court dismissed the second appeal filed by the defendant-appellant. 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upon and accepted and as such in the absence of any clause in the gift deed authorizing revocation, it could not have been revoked as alleged vide revocation deed dated August 17, 1987. The matter was, therefore, mentioned before the top court. After hearing the contentions, the SC bench said “It is worth noting that the gift deed itself states that from the date of the gift deed the suit property is accepted by the plaintiff-respondent…” It added, “...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.”

Moreover, the top Court pointed out “No doubt, the gift validly made can be suspended or revoked under certain contingencies but ordinarily it cannot be 5 revoked, more particularly when no such right is reserved under the gift deed. In this connection, a reference may be made to the provisions of Section 126 of the Transfer of Property Act, 18821  which provides that a gift cannot be revoked except for certain contingencies enumerated therein.” It said, “...ordinarily a gift deed cannot be revoked except for the three contingencies... The first is where the donor and the donee agree for 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 for the revocation of the gift deed for any reason much less 7 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.” 

The bench said “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.” It added “The further relief claimed in the suit is for recovery of possession based upon the title and as such its limitation would be 12 years in terms of Article 65 of the Schedule to the Limitation Act. Therefore, the 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. Thus, in the totality of the facts and circumstances of the case, the Supreme Court does not find any error or illegality on part of the first appellate court and the High Court in decreeing the suit of the plaintiff-respondent.” Lastly, the Supreme Court bench dismissed the appeal as devoid of merit. 

To read Full Judgment with Headnote Click Here.