Whether ownership in property cannot be gifted without transfer of possession of such property?

In the case at hand as already noticed by us, the execution
of registered gift deed and its attestation by two witnesses is not
in dispute. It has also been concurrently held by all the three
courts below that the donee had accepted the gift. The recitals in
the gift deed also prove transfer of absolute title in the gifted
property from the donor to the donee. What is retained is only
the right to use the property during the lifetime of the donor
which does not in any way affect the transfer of ownership in
favour of the donee by the donor.
The Apex Court observed that the delivery of possession is not an essential prerequisite for the making of a valid gift in the case of immovable property. There is indeed no provision in law that ownership in property cannot be gifted without transfer of possession of such property.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 4195 OF 2008
Renikuntla Rajamma (d) by LRs.

Versus
K. Sarwanamma

T.S. THAKUR, J.
Dated;July 17, 2014


1.
An apparent conflict between two earlier decisions rendered
by this Court one in Naramadaben Maganlal Thakker v.
Pranjivandas Maganlal Thakker & Ors. (1997) 2 SCC 255
and the other in K. Balakrishnan v. K. Kamalam & Ors.
(2004) 1 SCC 581 has led to this reference to a larger bench
for an authoritative pronouncement as to the true and correct
interpretation of Sections 122 and 123 of The Transfer of
Property Act, 1882.
Before we deal with the precise area in
which the two decisions take divergent views, we may briefly set
out the factual matrix in which the controversy arises.
2.
The plaintiff-respondent in this appeal filed O.S. No.979 of
1989 for a declaration to the effect that revocation deed dated

5th March, 1986 executed by the defendant-appellant purporting
to revoke a gift deed earlier executed by her was null and void.
The plaintiff’s case as set out in the plaint was that the gift deed
executed by the defendant-appellant was valid in the eyes of law
and had been accepted by the plaintiff when the donee-
defendant had reserved to herself during for life, the right to
enjoy the benefits arising from the suit property. The purported
revocation of the gift in favour of the plaintiff-respondent in
terms of the revocation deed was, on that basis, assailed and a
declaration about its being invalid and void ab initio prayed for.
3.
The suit was contested by the defendant-appellant herein
on several grounds including the ground that the gift deed
executed in favour of the plaintiff was vitiated by fraud, mis-
representation and undue influence. The parties led evidence
and went through the trial with the trial Court eventually holding
that the deed purporting to revoke the gift in favour of the
plaintiff was null and void. The Trial Court found that the
defendant had failed to prove that the gift deed set up by the
plaintiff was vitiated by fraud or undue influence or that it was a
sham or nominal document. The gift, according to trial Court,
had been validly made and accepted by the plaintiff, hence,
irrevocable in nature. It was also held that since the donor had

taken no steps to assail the gift made by her for more than 12
years, the same was voluntary in nature and free from any
undue influence, mis-representation or suspicion. The fact that
the donor had reserved the right to enjoy the property during
her life time did not affect the validity of the deed, opined the
trial Court.
4.
In the first appeal preferred against the said judgment and
decree, the first Additional District Judge, Warangal affirmed the
view taken by the trial Court and held that the plaintiff had
satisfactorily proved the execution of a valid gift in his favour
and that the revocation of a validly made gift deed was legally
impermissible. The First Appellate Court also held that the gift
deed was not a sham document, as alleged by the defendant
and
that
its
purported
cancellation/revocation
was
totally
ineffective. The defendant’s case that she had apprehended
grabbing of the property by Sankaraiah forcing her to make a
sham gift deed was held not established especially when
Sankaraiah had died three years prior to the execution of the
revocation deed by the defendant. If the gift deed was executed
by the donor to save the property from the covetous eyes of
Sankaraiah, as alleged by the defendant, there was no reason
why the defendant should have waited for three years after the

death of Sankaraiah before revoking the same reasoned the
Court. The first Appellate Court also affirmed the finding of the
trial Court that the donee had accepted the gift made in his
favour. The appeal filed by the defendant (appellant herein) was
on those findings dismissed.
5.
Concurrent findings of facts recorded by the Courts below
did not deter the appellants from preferring Civil Second Appeal
No.809 of 2003 in which the appellants made an attempt to
assail the said findings. The High Court, however, declined to
interfere with the judgments and orders impugned before it and
dismissed the second appeal of the appellant holding that the
case set up by the defendant that the gift was vitiated by undue
influence or fraud had been thoroughly disproved at the trial.
The present appeal is the last ditch attempt by the defendants to
assail the findings recorded against them.
6.
When the special leave petition came up for preliminary
hearing before a Division bench of this Court, the only question
which was urged on behalf of the appellant was whether
retention of possession of the gifted property for enjoyment by
the donor during her life time and the right to receive the rents
of the property in any way affected the validity of the gift. That
a gift deed was indeed executed by the donor in favour of the

donee and that the donee had accepted the gift was not
challenged and the finding to that effect has not been assailed
even before us. So also the challenge to the gift on the ground
of fraud, misrepresentation and undue influence, having been
repelled by the Courts below, the gift stands proved in all
material respects.
All that was contended on behalf of the
appellant was that since the donor had retained to herself the
right to use the property and to receive rents during her life
time, such a reservation or retention rendered the gift invalid. A
conditional gift was not envisaged by the provisions of the
Transfer of Property Act, argued the learned counsel of the
appellant. Inasmuch as the gift deed failed to transfer, title,
possession and the right to deal with the property in absolute
terms in favour of the donee the same was no gift in the eyes of
law, contended learned counsel for the appellant. Reliance in
support of that submission was placed by the learned counsel
upon the decision of this Court in Naramadaben Maganlal
Thakker v. Pranjivandas Maganlal Thakker and Ors.
(1997) 2 SCC 255.
7.
On behalf of the respondents it was per contra argued that
the validity of the gift having been upheld by the Courts below,
the only question that remains to be examined was whether a

gift which reserved a life interest for the donor could be said to
be invalid. That question was, according to the learned counsel,
squarely answered in favour of the respondents by the decisions
of this Court in K. Balakrishnan v. K. Kamalam & Ors.
(2004) 1 SCC 581.
8.
Reliance was also placed by the learned counsel upon
Bhagwan Prasad & Anr. v. Harisingh
AIR 1925 Nagpur
199, Revappa v. Madhava Rao AIR 1960 Mysore 97 and
Tirath Singh v. Manmohan AIR 1981 Punj. & Haryana 174
in support of the submission that transfer of possession was a
condition under the Hindu Law for a valid gift which Rule of
Hindu Law stood superseded by Section 123 of The Transfer of
Property Act.
9.
Chapter VII of the Transfer of Property Act, 1882 deals with
gifts generally and, inter alia, provides for the mode of making
gifts. Section 122 of the Act defines ‘gift’ as a transfer of certain
existing movable or immovable property made voluntarily and
without consideration by one person called the donor to another
called the donee and accepted by or on behalf of the donee. In
order to constitute a valid gift, acceptance must, according to
this provision, be made during the life time of the donor and
while he is still capable of giving. It stipulates that a gift is void if

the donee dies before acceptance.
10. Section 123 regulates mode of making a gift and, inter alia,
provides that a gift of immovable property must be effected by a
registered instrument signed by or on behalf of the donor and
attested by at least two witnesses. In the case of movable
property, transfer either by a registered instrument signed as
aforesaid or by delivery is valid under Section 123. Section 123
may at this stage be gainfully extracted:
“123. Transfer how effected – For the making of a gift
of immoveable property, the transfer must be effected by
a registered instrument signed by or on behalf of the
donor, and attested by at least two witnesses.
For the purpose of making a gift of moveable
property, the transfer may be effected either by a
registered instrument signed as aforesaid or by delivery.
Such delivery may be made in the same way as
goods sold may be delivered.”
11. Sections 124 to 129 which are the remaining provisions
that comprise Chapter VII deal with matters like gift of existing
and future property, gift made to several persons of whom one
does not accept, suspension and revocation of a gift, and
onerous gifts including effect of non-acceptance by the donee of
any obligation arising thereunder. These provisions do not
concern us for the present. All that is important for the disposal
of the case at hand is a careful reading of Section 123 (supra)
which leaves no manner of doubt that a gift of immovable

property can be made by a registered instrument singed by or
on behalf of the donor and attested by at least two witnesses.
When read with Section 122 of the Act, a gift made by a
registered instrument duly signed by or on behalf of the donor
and attested by at least two witnesses is valid, if the same is
accepted by or on behalf of the donee. That such acceptance
must be given during the life time of the donor and while he is
still capable of giving is evident from a plain reading of Section
122 of the Act. A conjoint reading of Sections 122 and 123 of the
Act makes it abundantly clear that “transfer of possession” of the
property covered by the registered instrument of the gift duly
signed by the donor and attested as required is not a sine qua
non for the making of a valid gift under the provisions of
Transfer of Property Act, 1882. Judicial pronouncements as to
the true and correct interpretation of Section 123 of the T.P. Act
have for a fairly long period held that Section 123 of the Act
supersedes the rule of Hindu Law if there was any making
delivery of possession an essential condition for the completion
of a valid gift. A full bench comprising five Hon’ble Judges of the
High Court of Allahabad has in Lallu Singh v. Gur Narain and
Ors. AIR 1922 All. 467 referred to several such decisions in

which the provisions of Section 123 have been interpreted to be
overruling the Hindu Law requirement of delivery of possession
as a condition for making of a valid gift. This is evident from the
following passage from the above decision where the High Court
repelled in no uncertain terms the contention that Section 123 of
the T.P. Act merely added one more requirement of law namely
attestation and registration of a gift deed to what was already
enjoined by the Hindu Law and that Section 123 did not mean
that where there was a registered instrument duly signed and
attested, other requirements of Hindu Law stood dispensed with:
“7. Dr. Katju, on behalf of the appellant, has strongly
contended that by Section 123 it was merely intended to
add one more requirement of law, namely, that of
attestation and registration, to those enjoined by the
Hindu Law, and that the Section did not mean that where
there was a registered document duly signed and
attested, all the other requirements of Hindu Law were
dispensed with. Section 123 has, however, been
interpreted by all the High Courts continuously for a vary
long period in the way first indicated, and there is now a
uniform consensus of opinion that the effect of Section
123 is to supersede the rule of Hindu Law, if there was
any, for making the delivery of possession absolutely
essential for the completion of the gift. We may only refer
to a few cases for the sake of reference, Dharmodas v.
Nistarini Dasi (1887) 14 Cal. 446, Ballbhadra v. Bhowani
(1907) 34 Cal. 853, Alabi Koya v. Mussa Koya (1901) 24
Mad. 513, Mudhav Rao Moreshvar v. Kashi Bai (1909) 34
Bom. 287, Manbhari v. Naunidh (1881) 4 All. 40,
Balmakund v. Bhagwandas (1894) 16 All. 185, and
Phulchand v. Lakkhu (1903) 25 All. 358. Where the terms
of a Statute or Ordinance are clear, then even a long and
uniform course of judicial interpretation of it may be
overruled, if it is contrary to the clear meaning of the

enactment but where such is not the case, then it is our
duty to accept the interpretation so often and so long put
upon the Statute by the Courts, and not to disturb those
decisions, vide the remarks of their Lordships decisions,
of the Privy Council in the case of Tricomdas Cooverji
Bhoja v. Sri Sri Gopinath Thakur AIR 1916 P.C. 182. We
are, therefore, clearly of opinion that it must now be
accepted that the provisions of Section 123 do away with
the necessity for the delivery of possession, even if it was
required by the strict Hindu Law.”
-
12. The logic for the above view flowed from the language of
Section 129 of the T.P. Act which as on the date of the decision
rendered by the High Court of Allahabad used the words “save
as provided by Section 123 of the Act”. Section 129 of the T.P.
Act was, before its amendment in the year 1929, as under:
“129.
Saving
of
donations
mortis
causa
and
Muhammadan Law.-Nothing in this Chapter relates to
gifts of moveable property made in contemplation of
death, or shall be deemed to affect any rule of
Muhammadan law or, save as provided by section 123,
any rule of Hindu or Buddhist law”.
13. A plain reading of the above made it manifest that the
“rules of Hindu law” and “Buddhist Law” were to remain
unaffected by Chapter VII except to the extent such rules were
in conflict with Section 123 of the Transfer of Property Act. This
clearly implied that Section 123 had an overriding effect on the
rules of Hindu Law pertaining to gift including the rule that
required possession of the property gifted to be given to the
donee. The decisions of the High Courts referred to in the

passage extracted above have consistently taken the view that
Section 123 supersedes the rules of Hindu law which may have
required delivery of possession as an essential condition for the
completion of a gift. The correctness of that statement of law
cannot be questioned.
The language employed in Section 129
before its amendment was clear enough to give Section 123 an
overriding effect vis-a-vis rules of Hindu Law. Section 129 was
amended by Act No. 20 of 1929 whereby the words “or, save as
provided by Section 123, any rule of Hindu or Buddhist Law”
have been deleted. Section 129 of the T.P. Act today reads as
under:
“129. Saving of donations mortis causa and
Muhammadan Law – Nothing in this Chapter relates to
gifts of moveable property made in contemplation of
death, or shall be deemed to affect any rule of
Muhammadan law.”
14. The above leaves no doubt that the law today protects only
rules of Muhammadan Law from the rigors of Chapter VII
relating to gifts. This implies that the provisions of Hindu Law
and Buddhist Law saved under Section 129 (which saving did
not extend to saving such rules from the provisions of Section
123 of the T.P. Act) prior to its amendment are no longer saved
from the overriding effect of Chapter VII. The amendment has

made the position more explicit by bringing all other rules of
Hindu and Buddhist Law also under the Chapter VII and
removing the protection earlier available to such rules from the
operation of Chapter VII. Decisions of the High Court of Mysore
in Revappa v. Madhava Rao and Anr. AIR 1960 Mysore 97
and High Court of Punjab and Haryana in Tirath v. Manmohan
Singh and Ors. AIR 1981 Punjab and Haryana 174, in our
opinion, correctly take the view that Section 123 supersedes the
rules of Hindu Law insofar as such rules required delivery of
possession to the donee.
15. The matter can be viewed from yet another angle. Section
123 of the T.P. Act is in two parts. The first part deals with gifts
of immovable property while the second part deals with gifts of
movable property. Insofar as the gifts of immovable property are
concerned,
Section
123
makes
transfer
by
a
registered
instrument mandatory. This is evident from the use of word
“transfer must be effected” used by Parliament in so far as
immovable property is concerned. In contradiction to that
requirement the second part of Section 123 dealing with gifts of
movable property, simply requires that gift of movable property
may be effected either by a registered instrument signed as
aforesaid or “by delivery”. The difference in the two provisions

lies in the fact that in so far as the transfer of movable property
by way of gift is concerned the same can be effected by a
registered instrument or by delivery. Such transfer in the case
of immovable property no doubt requires a registered instrument
but the provision does not make delivery of possession of the
immovable property gifted as an additional requirement for the
gift to be valid and effective. If the intention of the legislature
was to make delivery of possession of the property gifted also as
a condition precedent for a valid gift, the provision could and
indeed would have specifically said so.
Absence of any such
requirement can only lead us to the conclusion that delivery of
possession is not an essential prerequisite for the making of a
valid gift in the case of immovable property.
16. That brings us to the decisions of this Court which have led
to this reference. In K. Balakrishnan’s case (supra) the donor
executed a gift deed of a specified share of the property
inherited by her from her maternal grandfather in favour of her
minor son who was the donee-appellant before the Court and
her four year old daughter. The property gifted included a school
building. The gift deed stipulated that the responsibility to sign in
regard to the said school and the right to income would be with
the donor during her lifetime and thereafter would be vested in

the donee. After the execution of the gift deed the donor
cancelled the same and made a will bequeathing the property in
favour of her daughter whereupon the donee-appellant filed a
suit for declaration of his title to the suit property on the basis of
the gift and a further declaration for annulment of the
cancellation deed and the will executed by the donor. The Trial
Court dismissed the suit while the First Appellate Court decreed
the same. The High Court restored the view taken by the Trial
Court and held that when the donor had reserved to herself the
right to sign the papers with respect to management of the
school and the right to take usufruct from the property where
the school was situated, no property was transferred under the
deed. In appeal before this Court, the view taken by the High
Court was reversed and that taken by the First Appellate Court
restored. This Court held:
“10. We have critically examined the contents of the gift
deed. To us, it appears that the donor had very clearly
transferred to the donees ownership and title in respect
of her 1/8th share in properties. It was open to the donor
to transfer by gift title and ownership in the property and
at the same time reserve its possession and enjoyment to
herself during her lifetime. There is no prohibition in law
that ownership in a property cannot be gifted without its
possession and right of enjoyment. Under Section 6 of
the Transfer of Property Act “property of any kind may be
transferred” except those mentioned in clauses (a) to (i).
Section 6 in relevant part reads thus:

“6. What may be transferred.—Property of any kind
may be transferred, except as otherwise provided by this
Act or by any other law for the time being in force.
(a) *
*
*
(b) A mere right to re-entry for breach of a
condition subsequent cannot be transferred to anyone
except the owner of the property affected thereby.
(c) *
*
*
(d) An interest in property restricted in its
enjoyment to the owner personally cannot be transferred
by him.
(e) A mere right to sue cannot be transferred.”
11. Clause (d) of Section 6 is not attracted on the terms
of the gift deed herein because it was not a property, the
enjoyment of which was restricted to the owner
personally. She was absolute owner of the property gifted
and it was not restricted in its enjoyment to herself. She
had inherited it from her maternal father as a full owner.
The High Court was, therefore, apparently wrong in
coming to the conclusion that the gift deed was
ineffectual merely because the donor had reserved to
herself the possession and enjoyment of the property
gifted.”
(emphasis supplied)
17. We are in respectful agreement with the statement of law
contained in the above passage. There is indeed no provision in
law that ownership in property cannot be gifted without transfer
of possession of such property. As noticed earlier, Section 123
does not make the delivery of possession of the gifted property
essential for validity of a gift. It is true that the attention of this
Court does not appear to have been drawn to the earlier decision
rendered in Naramadaben Maganlal Thakker (supra) where
this Court had on a reading of the recital of the gift deed and the

cancellation deed held that the gift was not complete. This Court
had in that case found that the donee had not accepted the gift
thereby making the gift incomplete. This Court, further, held that
the donor cancelled the gift within a month of the gift and
subsequently executed a Will in favour of the appellant on a
proper construction of the deed and the deed cancelling the
same this Court held that the gift in favour of the donee was
conditional and that there was no acceptance of the same by the
donee. The gift deed conferred limited right upon the donee and
was to become operative after the death of the donee. This is
evident from the following passage from the said judgment:
“7. It would thus be clear that the execution of a
registered gift deed, acceptance of the gift and delivery of
the property, together make the gift complete.
Thereafter, the donor is divested of his title and the
donee becomes the absolute owner of the property. The
question is whether the gift in question had become
complete under Section 123 of the TP Act? It is seen from
the recitals of the gift deed that Motilal Gopalji gifted the
property to the respondent. In other words, it was a
conditional gift. There is no recital of acceptance nor is
there any evidence in proof of acceptance. Similarly, he
had specifically stated that the property would remain in
his possession till he was alive. Thereafter, the gifted
property would become his property and he was entitled
to collect mesne profits in respect of the existing rooms
throughout his life. The gift deed conferred only limited
right upon the respondent-donee. The gift was to become
operative after the death of the donor and he was to be
entitled to have the right to transfer the property
absolutely by way of gift or he would be entitled to collect
the mesne profits. It would thus be seen that the donor

had executed a conditional gift deed and retained the
possession and enjoyment of the property during his
lifetime.....”
18. The above decision clearly rests on the facts of that case. If
the gift was conditional and there was no acceptance of the
donee it could not operate as a gift. Absolute transfer of
ownership in the gifted property in favour of the donee was
absent in that case which led this Court to hold that the gift was
conditional and had to become operative only after the death of
the donee.
The
judgment
is
in
that
view
clearly
distinguishable and cannot be read to be an authority for the
proposition
that
delivery
of
possession
is
an
essential
requirement for making a valid gift.
19. In the case at hand as already noticed by us, the execution
of registered gift deed and its attestation by two witnesses is not
in dispute. It has also been concurrently held by all the three
courts below that the donee had accepted the gift. The recitals in
the gift deed also prove transfer of absolute title in the gifted
property from the donor to the donee. What is retained is only
the right to use the property during the lifetime of the donor
which does not in any way affect the transfer of ownership in
favour of the donee by the donor.

20. The High Court was in that view perfectly justified in
refusing to interfere with the decree passed in favour of the
donee. This appeal accordingly fails and is hereby dismissed but
in the circumstances without any orders as to costs.
................................................J.
(T.S. THAKUR)
................................................J.
(V. GOPALA GOWDA)
New Delhi,
July 17, 2014
................................................J.
(C. NAGAPPAN)

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