Cancellation of Gift Deed- Gift can be Cancelled when Gift is Incomplete and Title Remains with the Donor- Supreme Court

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November 01, 2018

Cancellation of Gift Deed- In the present case, the Two-Judge Bench of the Supreme Court delved into the law pertaining to gift and transfer of gift under the Transfer of Property Act. The Apex Court in the case has categorically held that when a gift is incomplete and title remains with the donor the deed of gift might be cancelled.

Case name: S. Sarojini Amma v. Velayudhan Pillai Sreekumar

Brief facts of the case- The Appellant in the case assailed High Court’s judgment, whereby the High Court passed judgment in favour of the respondent. In the case respondent was the nephew of appellant and 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.

However, later the appellant executed the deed of cancellation, cancelling the gift deed. Aggrieved by the cancellation of gift deed, the respondent filed suit for declaration that the cancellation of deed executed by the appellant was null and void.

In appeal, the appellant has contended that the document styled as gift deed was to come into effect only after the death of the appellant and her husband.

The Two-Judge Bench of the Supreme Court, passed a verdict in favour of the Appellant in view of the following observations made by the Bench in the case:

  • That Gift means to transfer certain existing moveable or immoveable property voluntarily and without consideration by one person called the donor to another called the donee and accepted by or on behalf of the donee as held by the Supreme Court in Naramadaben Maganlal Thakker vs. Pranivandas.
  • 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 absolute owner of the property.
  • That 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 lifetime of the donor. When a gift is incomplete and title remains with the donor the deed of gift might be cancelled.
  • That there is no provision in law that ownership in property cannot be gifted without transfer of possession of such property. However, the conditions precedent of a gift as defined in Section 122 of the Transfer of Property Act must be satisfied.
  • That a gift is transfer of property without consideration. Moreover, a conditional gift only becomes complete on compliance of the conditions in the deed.

In view of the aforesaid observations, the Supreme Court in the case 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.