REVOCATION OF GIFT DEED: CIRCUMSTANCES EXPLAINED

 

REVOCATION OF GIFT DEED: CIRCUMSTANCES EXPLAINED

A Gift Deed is another mode of conveyance of immoveable properties and is invoked for gifting the property to near and dear without consideration. It is required to be registered and stamp duty, though, shall be payable ad valorem as is the case with any sale transactions. The conventional mode of conveyance , based on consideration , of course, is execution of registered sale deed. However, if a registered documents is sought to be cancelled, provided the case is made out, there are criteria laid down in this regard.

A gift deed can be sought to be cancelled on certain grounds and prescription thereof is included in Section 126 of Transfer of Properties Act 1882 and that contains the following criteria for cancellation of Gift Deed:

(i)          If the consent from the donor was obtained fraudulently and by deceit, undue influence or coercion;

(ii)        If the donee has failed to meet any condition stipulated in the Gift Deed;

(iii)       If the purpose and object of the Gift Deed itself was illegal;

(iv)       If not registered in accordance with law;

(v)         The Gift to a minor , who failed to accept it within a reasonable period, after attaining majority;

(vi)       If the Gift was made by aged persons who was unable to comprehend and understand the contents and purpose of the deed.

(vii)     A Gift Deed cannot be cancelled merely because the donor had changed his/her mind.

(viii)   The property has financial liabilities and encumbrances;

(ix)       Non acceptance of gift by donee.

It is a settled proposition in law that a Gift Deed cannot be cancelled, simply, because a Will was made, subsequently, by the donor bequeathing the same property to someone else.

Handing over of possession and accepting the possession is generally not required in a gift. Even if donor retained the possession that shall not invalidate the gift.

Sudesh Chhikara vs Ramti Devi & Anr 2022 LiveLaw (SC) 1011

The Supreme Court in Sudesh Chhikara (Supra) it is held that gift deed can be cancelled u/s 23 of Maintenance and Welfare of Parents & Senior Citizens Act 2007, only, if the transfer of property was under certain conditions of providing basic amenities and basic physical needs to parents. Merely, because, the donee could not meet the expectation of donor in itself shall not be a ground to cancel a gift deed.

Whereas, in Sudesh Chhikara (Supra) the Maintenance Tribunal had passed order, thereby, the Release Deed was declared as null and void for not maintaining the parents and the same was confirmed by the high court in writ petition. However, the Supreme Court has set aside the orders passed by the Tribunal and the High Court and held  that upon perusal of the counter affidavit filed it is not pleaded that the release was subject to any condition. It is merely pleaded that the appellant had no intention to take care of her mother. Thus, it was held that the order of the Maintenance Tribunal cannot be sustained as the twin conditions incorporated in sub-Section (1) of Section 23 were not satisfied and that the high court has wrongfully not adverted to the merits of the case at all.

The Sub-Divisional Magistrate acts as the Maintenance Tribunal under the 2007 Act and the power under Section 23 could be invoked and the release deed or gift deed could be declared void in apt cases.. The 2007 Act has been enacted for the purposes of making effective provisions for the maintenance and welfare of parents and senior citizens guaranteed and recognized under the Constitution of India. The Maintenance Tribunal has been established under Section 7 to exercise various powers under the 2007 Act. Section8  provides that the Maintenance Tribunal, subject to any rules which may be framed by the Government, has to adopt such summary procedure while holding inquiry, as it deems fit. Apart from the power to grant maintenance, the Tribunal exercises important jurisdiction under Section 23 of the 2007 Act. The contents of Section 23 of 2007 is reproduced herein for ready reference:

“23. Transfer of property to be void in certain circumstances.—

(1) Where any senior citizen who, after the commencement of this Act, has transferred by way of gift or otherwise, his property, subject to the condition that the transferee shall provide the basic amenities and basic physical needs to the transferor and such transferee refuses  or fails to provide such amenities and physical needs, the said transfer of property shall be deemed to have been made by fraud or coercion or under undue influence and shall at the option of the transferor be declared void by the Tribunal.

(2) Where any senior citizen has a right to receive maintenance out of an estate and such estate or part thereof is transferred, the right to receive maintenance may be enforced against the transferee if the transferee has notice of the right, or if the transfer is gratuitous; but not against the transferee for consideration and without notice of right.

(3) If, any senior citizen is incapable of enforcing the rights under sub-sections (1) and (2), action may be taken on his behalf by any of the organisation referred to in Explanation to sub-section (1) of Section 5 (emphasis added)

When a senior citizen parts with his or her property by executing a gift or a release or otherwise in favour of his or her near and dear ones, a condition of looking after the senior citizen is not necessarily attached to it. It is so, because, generally, such transfers are made out of love and affection without any expectation in return. Thus, if it is alleged that the conditions mentioned in sub-section (1) of Section 23 are attached to a transfer, existence of such conditions must be established before the Tribunal and it cannot just be a mere allegation..

A cursory perusal of the petition challenging the registered deed under Section 23 of the Act should clearly reflect that the deed/release deed was executed subject to a condition that the transferees in cases of Sons/daughter would provide the basic amenities and basic physical needs to the donor parents. If evidence to the aforesaid effect is non existing, the gift deed or release deed cannot be faulted with on the premise of oral assumptions No doubt, if transfer is effected subject to a condition of providing the basic amenities and basic physical needs to the transferor – a senior citizen and that is made a sine qua non for applicability of sub-section (1) of Section 23 and if the condition is violated, then the gift deed or release deed can possibly not sustain.

The challenge to Gift deed and provisions

The challenge to a gift deed, in order to seek its cancellation or declaration that the gift deed is null and void in view of illegalities shall have to be preferred within three (3) years of the date of gift deed or within three (3) years from the date of knowledge, as the case may be. The Article 59[8] of the Limitation Act 1963 stipulates that within three years from the date of discovery of grounds for cancellation, the same can be challenged.

Section 31 of the Specific Relief Act, 1963 is the provision under law which enumerates right to any person to get the relief of cancellation of instruments being void or voidable and who has reasonable apprehension that such instrument, if left outstanding may cause him serious injury. The term "written instrument" has been used in Section 31  of Specific Relief Act, 1963 and according to the definition provided therein only a "written instrument" could be adjudged by the Court as void and voidable or cancelled.

Section 31 of Specific Relief Act, 1963, for convenience is reproduced below:-

"31. When cancellation may be ordered - (1) Any person against whom a written instrument is void or voidable, and who has reasonable apprehension that such instrument, if left outstanding may cause him serious injury, may sue to have it adjudged void or voidable; and the court may, in its discretion, so adjudge it and order it to be delivered up and cancelled.

(2) If the instrument has been registered under the Indian registration Act 1908 (16 of 1908), the court shall also send a copy of its decree to the officer in whose office the instrument has been so registered; and such officer shall note on the copy of the instrument contained in his books the fact of its cancellation."

In the aforesaid description, it is explained that firstly, a gift deed shall have to be registered for its efficacy and validity and it can be revoked, pursuant to a petition to be preferred to that effect in a competent courts of law, within a period of three years from the date of the execution of “instrument” and from the date of knowledge as the case may be, but only if the circumstances as explained above for seeking cancellation of it existed. Even, in the case of senior citizens, merely, because a senior citizen, who had executed a gift deed was not being looked after, is not a ground for seeking its cancellation, but, if such condition is made part of the gift deed as a covenant, then, that can be a ground to seek cancellation.

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                                  Anil K Khaware

Founder & Senior Associate

Societylawandjustice.com