A deed executed as gift deed but subject to conditions is incomplete and can be cancelled before the conditions are fulfilled, the Supreme Court has clarified.
The decision was given by a divisional Bench consisting of Justices Arun Mishra and Indira Banerjee in an appeal against a judgment of the High court of Kerala.
The short question involved in the appeal was whether a document styled as gift deed but admittedly executed for consideration, part of which has been paid and the balance promised to be paid, can be treated as formal document or instrument of gift.
Another related question was whether a gift deed reserving the right of the donor to keep possession and right of enjoyment and enforceable after the death of the executants is a gift or a will.
The appellant was a childless widow aged 74 years whose husband expired in 2015. The respondent was the nephew of the appellant. In the expectation that the respondent will look after the appellant and her husband and also for some consideration, the appellant executed a purported gift deed in favour of the respondent. The gift deed clearly stated that the gift would take effect after the death of the appellant and her husband.
In 1999, the appellant executed a deed of cancellation thereby cancelling the gift deed. After about eight months, the respondent filed a Suit in the Court of Munsif, Sasthamcotta for a declaration that the cancellation deed executed by the appellant is null and void and also for a declaration of his right over the suit property which was the subject matter of the purported deed of gift.
The Munsif held against the appellant and an appeal was filed by the appellant before District Court, Kollam. The District Court ruled in favour of the appellant, and the respondent, therefore, moved the Kerala High Court. The High Court set aside the decision of the District Court and held in favour of the respondent prompting the appellant to move the Supreme Court.
A conditional gift with no recital of acceptance and no evidence in proof of acceptance, where possession remains with the donor as long as he is alive, does not become complete during the lifetime of the donor. When a gift is incomplete and title remains with the donor, the deed of gift might be cancelled, the Court noted.
Thus, the Court held that there was no completed gift of the property in question by the appellant to the respondent and the appellant was within her right in cancelling the deed.
Courtesy/By: Shubham Mathur
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29 Oct 2018
