In a landmark judgment, the Supreme Court of India ruled that a gift deed, once validly accepted, cannot be revoked unilaterally unless certain legal contingencies are met. The decision came in N. Thajudeen v. Tamil Nadu Khadi and Village Industries Board (Civil Appeal No. 6333 of 2013), where the Court dismissed an appeal challenging the validity and revocation of a registered gift deed dated March 5, 1983. The bench, comprising Justice Pankaj Mithal and Justice Ujjal Bhuyan, reinforced the principles under Section 126 of the Transfer of Property Act, 1882, emphasizing that “a gift, once duly accepted, becomes irrevocable unless agreed upon by both parties for revocation.”
Background of the Case
The case originated when the Tamil Nadu Khadi and Village Industries Board (the respondent) filed a civil suit for the declaration of its title and recovery of possession of a 3,750 sq. ft. plot located in Kotlambakkam Panchayat, Cuddalore District. The property was gifted to the Board by N. Thajudeen (the appellant) through a registered gift deed in 1983. The gift was intended for the establishment of Khadi-based manufacturing facilities. The appellant later executed a deed to revoke the gift on August 17, 1987, alleging that the terms of the gift were not adhered to. This led to prolonged litigation.
The trial court, in its judgment dated August 23, 1994, dismissed the respondent’s suit, finding that the gift deed was not valid due to lack of proper acceptance. However, the appellate court reversed this finding on August 5, 1997, holding that the gift was indeed accepted and acted upon. The Madras High Court upheld this decision on January 11, 2011, leading to an appeal before the Supreme Court.
Legal Issues Considered by the Supreme Court
The Supreme Court deliberated on several crucial issues:
1. Validity and Acceptance of the Gift Deed:
– The primary issue was whether the gift deed executed in 1983 was validly accepted and acted upon by the respondent.
– Justice Mithal, delivering the judgment, noted that the gift deed clearly indicated acceptance by the respondent. The Court referred to the mutation application filed by the respondent soon after the gift, alongside evidence of possession and utilization of the property, proving that the gift was not only accepted but also acted upon.
2. Revocation of the Gift Deed:
– The Court examined the legality of the revocation deed of 1987. Under Section 126 of the Transfer of Property Act, a gift deed can be revoked only under specified conditions, such as the occurrence of an agreed-upon event independent of the donor’s will, or if the gift resembles a contract that can be rescinded.
– The judgment highlighted that no clause in the gift deed permitted revocation, nor was there any mutual agreement to allow such an action. Justice Bhuyan observed, “The absence of any stipulation for revocation in the deed makes the revocation deed void ab initio.”
3. Limitation for Filing the Suit:
– Another pivotal issue was whether the suit filed in 1991 was barred by limitation. The trial court had previously dismissed the suit on this ground, stating it was filed beyond the three-year limit from the date of revocation.
– The Supreme Court clarified that when a suit involves both a declaration of title and recovery of possession, the limitation for filing is twelve years under Article 65 of the Limitation Act, 1963, as opposed to three years for mere declaratory relief under Article 58.
Key Observations of the Court
In its judgment, the Supreme Court made several notable observations:
– “A gift, once validly made and accepted, cannot be revoked except under the specific contingencies provided by law.”
– “The non-utilization of the gifted property for the specified purpose does not confer upon the donor the power to revoke the gift, unless such a condition is explicitly incorporated in the gift deed.”
– “The right to possess and utilize the gifted property once transferred becomes absolute, barring exceptional legal grounds for rescission.”
Counsel and Parties Involved
The appellant, N. Thajudeen, was represented by Ms. T. Archana, while Mr. Vipin Kumar Jai appeared for the respondent, Tamil Nadu Khadi and Village Industries Board. The ruling was issued in favour of the respondent, upholding the decisions of the appellate court and the High Court.
