IMPORTANT POINT
A settlement deed can create vested rights in the recipient, which cannot be revoked if the settlor has divested themselves of the right to do so.

JUDGMENT :

V.R.K. KRUPA SAGAR, J.

1. This appeal is directed against the judgment dated 28.06.2005 of learned Senior Civil Judge, Bhimavaram in A.S. No. 4 of 1996. By the said appeal, the learned first appellate Court set aside the judgment dated 31.01.1996 of learned I Additional District Munsif, Bhimavaram in O.S. No. 183 of 1993 and the suit was accordingly dismissed.

2. On 16.03.2006 a learned Judge of this Court admitted this appeal under Section 100 C.P.C. formulating the following substantial questions of law:

1. Whether the lower Appellate Court is right in holding that the Ex.A.2 deed is a settlement deed but not a Will, without considering the fact that there is no transfer in praesenti during the lifetime of the settlor, but there is transfer in future?

2. Whether the lower Appellate court is right in holding that the disputed document Ex.A.2 is settlement deed basing on the nomenclature of the document, without going into the contents of the documents?

3. Whether the lower Appellate Court is right in holding that the disputed document is a settlement deed, as such it cannot be revoked?

4. Whether the lower Appellate Court is right in considering the fact that the Ex.A.2 is a Will and it can always be revoked under Ex.A.3?

5. Whether the lower Appellate Court is right in holding that the Ex.A.2 a settlement deed but not a Will, having rightly held the right of possession and enjoyment of the schedule property is postponed but it cannot be held as a Will?

6. Whether the lower Appellate Court is right in holding that since there is no recital in Ex.A.2, restricting the 1st respondent/defendant's right to encumber the property, it always creates a right to the respondent either to alienate or encumber his property, during his lifetime?

3. Sri Challa Dhanamjaya, the learned Senior Counsel appearing for appellant and Sri D. Krishna Murthy, the learned counsel appearing on behalf of Sri Tenneti Prabhu Das, the learned counsel for respondent No. 1 submitted arguments.

4. An extent of 96 square yards site in R.S. No. 418/19 in New Ward No. 13 of Bhimavaram Municipality, West Godavari District belonged to Sri Egala Mutyalu. Under Ex.A.1-registered settlement deed dated 16.10.1989 he gifted the property to his second wife-Smt. Egala Venkayamma. During their wedlock they had no children. However, Sri Egala Mutyalu through his first wife Smt. Lakshmamma had two sons and one daughter. One son died and the other son is Sri Sriramulu. The said Sri Sriramulu has a son by name Sri Egala Surya Mohana Rao.

5. Smt. Egala Venkayamma executed a gift settlement deed dated 28.09.1992 vide Ex.A.2 and got it registered. Under this document she gave her above referred property to her stepson’s son Sri Egala Surya Mohana Rao. Thereafter on 21.12.1992 she executed a deed of revocation under which she revoked the above referred gift settlement deed. Ex.A.3 is the registered revocation deed. On 03.05.1993 she issued a lawyer’s notice to her stepson’s son and thereafter filed O.S. No. 183 of 1993 before learned I Additional District Munsif, Bhimavaram praying for cancellation of Ex.A.2-settlement deed dated 28.09.1992 and for costs and such other reliefs. The said suit was laid as against her stepson’s son Sri Egala Surya Mohana Rao. In the suit it was alleged by pleadings that she had fond hope that her grandson would look after her and therefore she had executed Ex.A.2-gift settlement deed. However, her stepson as well as his son failed to look after her and necked her out and therefore, she seeks cancellation of the gift settlement deed. It is alleged that out of undue influence she had to execute Ex.A.2 and therefore it deserves cancellation.

6. In the written statement filed by the sole defendant/settlee, the allegation of undue influence was denied as false and further pleaded as to how they have been looking after her. It is further mentioned that as the plaintiff had mortgaged the property and she was unable to repay the debt to the bank, the defendant