The Supreme Court of India has upheld the Andhra Pradesh High Court’s judgment holding that a gift deed, once validly executed, cannot be cancelled unilaterally unless a right of revocation is expressly reserved under Section 126 of the Transfer of Property Act, 1882. The Court dismissed a civil appeal filed against the High Court’s decision, affirming that the deed in question could not be revoked in the absence of such a reserved right.
The matter was heard by a Bench comprising Justice Sanjay Karol and Justice Satish Chandra Sharma in Civil Appeal No. 1834 of 2015: J. Radha Krishna vs. Pagadala Bharathi & Anr. The appeal arose from the judgment dated 15 November 2012 of the Andhra Pradesh High Court in Second Appeal No. 1459 of 2005.
Background:
The dispute originated from a document dated 10 January 1986, executed by Shri K.V.G. Murthy (the donor), titled as a “gift deed” (Exhibit B.1), in favour of Pagadala Bharathi, referred to as his foster daughter. This document was later cancelled by a deed of cancellation dated 30 December 1986. Subsequently, on 30 September 1992, Murthy executed a Will in favour of his brother’s son, the appellant in the case.
The trial court had ruled in favour of the appellant, upholding the Will. This finding was affirmed by the first appellate court. However, the High Court reversed both decisions, answering the following substantial questions of law in favour of the respondent:
- Whether the judgments and decrees of the courts below are hit by Section 126 of the Transfer of Property Act?
- Whether the judgments of the courts below suffer from perversity?
- Whether the courts below were justified in granting declaration to the plaintiff, who is a stranger to the family, based upon an unregistered Will ignoring the earlier registered settlement and gift deed?
Supreme Court’s Analysis:
The Supreme Court concurred with the findings of the High Court, particularly on the first question, which was the main point of contention. Referring to Section 126 of the Transfer of Property Act, the Court observed:
“Under Section 126 of the Act, if a gift is to be revoked or suspended there should be a right reserved.”
The Court noted that the evidence of PW-1 (plaintiff) only showed that the donor had executed the gift deed with the hope that the donee would look after him until death. Since there was no agreement or clause reserving a right to revoke the gift deed for failure to provide such care, the Court held that revocation was not legally sustainable.
“It is a clear admission of a valid execution of the gift deed… In the absence of such agreement, Section 126 of the Act cannot be relied upon when there is no right reserved or understanding entered into between the donor and donee.”
The Court further cited precedents, including Namburi Basava Subrahmanyam vs. Alapati Hymavathi & Ors. and M. Venkatasubbaiah vs. M. Subbamma & Ors., which reiterated that a settlement deed once executed and not conditional upon specific revocable terms cannot be annulled by executing another deed or Will.
The Bench concluded:
“The aforesaid findings, in our considered view, remain unimpeachable from the evidence led by the parties. It cannot be said that the same are in any manner perverse or based on incorrect reading, application or interpretation of the statute.”
Decision:
The Supreme Court dismissed the appeal and upheld the High Court’s judgment. It reiterated that a donor cannot revoke a gift deed at will and must approach the court for annulment based on valid grounds if any.
Case Details:
Supreme Court of India
Bench: Justice Sanjay Karol and Justice Satish Chandra Sharma
Case Title: J. Radha Krishna vs. Pagadala Bharathi & Anr.
Case No.: Civil Appeal No. 1834 of 2015
Appearing Counsel:
- For Appellant: Mr. Dama Seshadri Naidu, Sr. Adv. with Mr. Deepak Sharma, Mr. Venkateswara Rao Anumolu
- For Respondents: Mr. R. Nedumaran, Sr. Adv. with Mr. M.A. Chinnasamy, Mrs. C. Rubavathi, Mr. C. Raghavendren, Mr. P. Raja Ram
