2025 Supreme(SC) 527

SUPREME COURT OF INDIA
J.B. PARDIWALA, R. MAHADEVAN, JJ.
N.P. Saseendran – Appellant
Versus
N.P. Ponnamma & Ors. – Respondents
Civil Appeal No. 4312 of 2025 (Arising out of SLP (C) No. 698 of 2023)
Decided On : 24-03-2025

IMPORTANT POINTS
(1) Right to appeal – Right to appeal under Section 100 or 109 of Code of Civil Procedure, 1908 and Article 133 of Constitution of India can basically be on same premise of existence of a substantial question of law.
(2) Interplay between Gift, Settlement and Will – In case of Gift, it is a gratuitous grant by owner to another person; in case of Settlement, consideration is mutual love, care, affection and satisfaction, independent and resulting out of preceding factors; in case of Will, it is declaration of intention of testator in disposition of his property in a particular manner.
(3) Delivery of possession is not sine qua non to validate a gift or settlement – Possession of gift itself would amount to acceptance – Once document is categorized as a gift, in absence of any clause or reservation to cancel, executant has no right to cancel the same.
(4) Reasons for cancellation or revocation of gift have to be proved in a court of law.

Headnote:

(A) Civil Procedure Code, 1908 – Section 100/109 – Constitution of India – Articles 133 and 142 – Right to appeal – Right to appeal under Section 100 or 109 of Code of Civil Procedure and Article 133 of Constitution of India can basically be on same premise of existence of a substantial question of law – If question raised before Court is not substantial, High Court could not have interfered with concurrent findings without substantial question of law – A substantial question of law is always of general importance – That apart, Supreme Court invigorated with authority under Article 142 of Constitution to do complete justice, though bridled with a responsibility to be exercised in appropriate cases. (Para 8)

(B) Transfer of Property Act, 1882 – Sections 2(b) and 11 – Settlement Deed – Meaning – It is non-testamentary instrument whereby, there is disposition or an agreement to dispose of any movable or immovable property to a destination or devolution of successive interest – More often than not, it consists of love, care, affection, duty, moral obligation, or satisfaction, as such deed are typically executed in favour of a family member – Settlor is entitled to reserve a life interest either upon himself or upon others and impose any condition – Person in whose favour a life interest is created, is permitted to use and enjoy income arising out of such property during his life time, but has no right of alienation as property had already vested in settlee – Breach of any condition in settlement, would then render settlement void – However, there are restrictions under Transfer of Property Act, 1882 on conditions that can be imposed – However, there are restrictions under Transfer of Property Act, 1882 on conditions that can be imposed – Section 11 of Transfer of Property Act, 1882 states that when by virtue of a transfer, absolute right and interest has been vested in a party, any condition restricting or directing that property must be enjoyed in a particular manner would be void as it is repugnant to original grant – Similarly, any condition restraining or limiting transferee from enjoying property is also void to that extent – Though under both situations, conditions are void, interest vested already can be enjoyed absolutely as per will of transferee. (Para 11.1)

(C) Indian Succession Act, 1925 – Section 63 – Transfer of Property Act, 1882 – Sections 2(b) and 26 – Interplay between Gift and Settlement – Primary difference between Gift and Settlement is existence of consideration in settlement – Consideration is nothing but quid pro quo, that each party to a contract is to perform or render a part of their obligation under the contract – In view of fact that a gift is a voluntary disposition, it is essentially not an agreement and element of consideration is taken away from it – Settlement on other hand is always coupled with consideration as it is mostly executed in favour of a family member – Gift or settlement of an immovable property has to be registered as per Section 17 of Registration Act – Conditions regarding acceptance, reservation of life interest and restriction on revocation are applicable to both “gift and settlement” – Vesting of right also takes place in praesenti in both cases – There is an element of gift in every settlement – In both cases, unilateral revocation is not permitted – There can be a clause permitting such revocation in deed – Similarly, creation of a life interest would not affect grant and change character of document – Similarly, delivery of possession is not mandatory as in both cases – In case of a gift or settlement, it is sufficient if donee/settlee had accepted the same during life time of executor of document and such acceptance can be either express or implied, but must be visible from conduct of parties – Putting donee/settlee into possession or handing over document to recipient can also be recognised as valid acceptance – Registration of gift by donee and possession of such document will also amount to valid acceptance. (Para 11.3)

(D) Transfer of Property Act, 1882 – Sections 122 and 2(b) – Indian Succession Act, 1925 – Section 63 – Interplay between Gift, Settlement and Will – In case of Gift, it is a gratuitous grant by owner to another person; in case of Settlement, consideration is mutual love, care, affection and satisfaction, independent and resulting out of preceding factors; in case of Will, it is declaration of intention of testator in disposition of his property in a particular manner – Will is declaration of intention of testator to give away his property – Such Will comes into force after death of testator – Most important requirement for a valid Will is that it must be a voluntary disposition in sound mind, which must be explicit from instrument itself – Every Will also has element of gift, with difference being disposition deferred until death of testator – Insofar as revocation is concerned, testator is at liberty to revoke or alter Will any number of times until his demise, but it is essential that he remains of sound mind while doing so – Element of voluntary disposition is common to all three deeds – Nomenclature of an instrument is immaterial and nature of document is to be derived from its contents – Reservation of life interest or any condition in instrument, even if it postpones physical delivery of possession to donee/settlee, cannot be treated as a Will, as property had already been vested with donee/settlee – Even when there is any ambiguity in understanding nature of documents from its contents, subsequent conduct of executant must also be considered to take a decision – It is possible that in a single document, there could be multiple directions in different clauses though seemingly repugnant but in reality, it could only be ancillary or a qualification of earlier clause – Document must be harmoniously read to not only understand true intent and purport, but also to give effect to each and every word and direction. (Paras 11.4, 11.5 and 14.1)

(E) Property Law – Suit for declaration of right, title and interest over suit schedule property and for invalidation of cancellation deed and sale deed as also for consequential injunction – Delivery of possession is not sine qua non to validate a gift or settlement – Possession of gift itself would amount to acceptance – Plaintiff, when suit was filed, was in possession of original title deed – Stand of defendants that plaintiff took away document later is unbelievable – Even assuming that original deed was returned after registration, fact that it was already acted upon, cannot be altered – Once a gift has been acted upon, same cannot be unilaterally cancelled – Creation of life interest with rights to enjoy income from property is a plausible and justifiable reason for plaintiff not to reside in the premises – Once document is declared as “gift”, Defendant No.1 had no right to cancel the same unilaterally and Sub-Registrar had no right to register cancellation deed – Once document is categorized as a gift, in absence of any clause or reservation to cancel, executant has no right to cancel the same – Reasons for cancellation or revocation of gift have to be proved in a court of law – Unilateral cancellation of document is void and as a natural corollary, sale deed executed by Defendant No.1 / father also, is invalid – Trial Court as well as First Appellate Court had erroneously come to conclusion that Settlement Deed was a Will, without appreciating law – High Court rightly set aside concurrent judgments of Courts below by treating the document as Settlement in Judgment impugned. (Paras 18, 19 and 20)

Facts of the case:

Present appeal has been filed against final judgment and decree dated 10.06.2019 passed by High Court of Kerala at Ernakulam in R.S.A. No.1338 of 2004, whereby High Court allowed Regular Second Appeal and set aside the concurrent findings of Courts below, besides granting decree in favour of plaintiff / Respondent No.1 declaring her right, title and interest over the suit schedule property by virtue of settlement deed dated 26.06.1985.High Court also declared that cancellation deed dated 19.10.1993 and sale deed dated 19.10.1993 both executed by Defendant No.1 would not bind the plaintiff as far as her right, title and interest over suit schedule property is concerned.

Findings of Court:

Trial Court as well as First Appellate Court had erroneously come to the conclusion that document was a Will, without appreciating the law. However, High Court rightly set aside concurrent judgments of Courts below by treating document as settlement in judgment impugned herein.

Result : Appeal dismissed.