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Conditional Gifts Are Incomplete Until Conditions Are Complied With

In S. SAROJINI AMMA vs VELAYUDHAN PILLAI SREEKUMAR, the short question involved in this appeal before the Supreme Court was whether a document styled as gift deed but admittedly executed for consideration, part of which has been paid and the balance promised to be paid, can be treated as formal document or instrument of gift. Another related question is whether a gift deed reserving the right of the donor to keep possession and right of enjoyment and enforceable after the death of the executant is a gift or a will. On behalf of the appellant, it was contended that the document styled as gift deed was to come into effect only after the death of the appellant and her husband.

The appellant is a childless widow aged 74 years whose husband expired on 06.06.2015. The respondent is the nephew of the appellant (brother’s son). 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. Subsequently the appellant executed the deed of cancellation cancelling the gift deed. Suit was filed by the respondent for declaration of the cancellation deed as null and void and the respondent as owner of the property and was decreed in their favour. On appeal the order was set aside. On appeal by the respondent, the High Court set aside the said order. 

The Supreme Court referred to Naramadaben Maganlal Thakker Vs. Pranivandas Maganlal Thakker, wherein it was decided 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 and 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. 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.

The court also referred to Reninkuntla Rajamma Vs. K. Sarwanamma wherein it was held that 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. A gift is transfer of property without consideration. Moreover, a conditional gift only becomes complete on compliance of the conditions in the deed.

Based on the above judgments the court decided that in the instant case, admittedly, the deed of transfer was executed for consideration and was in any case conditional subject to the condition that the donee would look after the petitioner and her husband and subject to the condition that the gift would take effect after the death of the donor. Therefore 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.


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