The Supreme Court has ruled that an individual who has surrendered rights over ancestral properties under a family settlement and a subsequent court-recorded compromise cannot later alienate or gift those properties. A Bench comprising Justice Sanjay Kumar and Justice Sanjeev Sachdeva set aside judgments of the Telangana High Court and the Trial Court, which had dismissed a suit challenging a registered gift deed. The apex court decreed the suit in favour of the appellants, invalidating the gift deed and declaring their title after noting patent errors and complete non-application of mind by the lower courts.
Background of the Case
The dispute traces its origin to a family settlement executed on April 19, 1959. Following the death of B. Venkat Reddy and his eldest son, Sudhakar Reddy, in 1948 during the Razakar Movement, ancestral properties were divided among surviving family members: Venkat Reddy’s widow, Manikyamma; Sudhakar Reddy’s widow, Anasuyamma (who adopted Venkatraji Reddy in 1975); and two other sons, Madhusudhan Reddy and Janardhan Reddy.
Under the 1959 settlement:
- Manikyamma received 53 Acres 10 Guntas in Karkalpahad Village.
- Anasuyamma was allotted a total of 91 Acres 22 Guntas across multiple villages (including 40 Acres 01 Gunta in Karkalpahad Village).
- Madhusudhan Reddy received 62 Acres 09 Guntas (which included only 1 Acre 30 Guntas in Survey No. 15 of Karkalpahad Village).
- Janardhan Reddy was allotted 131 Acres 07 Guntas across various villages.
Anasuyamma and her adopted son, Venkatraji Reddy, later filed O.S. No. 555 of 1977 before the I Additional Judge, City Civil Court, Hyderabad, seeking partition of suit schedules A, B, and C properties. By a common judgment dated April 21, 1984, the Trial Court dismissed the claim regarding schedule A properties on the ground that they were already covered by the 1959 settlement, while partly decreeing the suit for schedules B and C properties.
Aggrieved by this part-decree, Madhusudhan Reddy filed City Civil Court Appeal (CCCA) No. 86 of 1984 before the High Court of Andhra Pradesh. During the pendency of the appeal, the parties entered into a written compromise titled ‘Settlement of Dispute’ dated February 24, 1986. Madhusudhan Reddy filed CMP No. 9728 of 1988 under Order XXIII Rule 3 of the Code of Civil Procedure, 1908, to record the compromise, which the High Court allowed on June 27, 1988.
Under the terms of this settlement:
- Anasuyamma and Venkatraji Reddy relinquished their 1/3rd claim in the suit schedule B house property at Himayatnagar, Hyderabad, conferring absolute ownership on Madhusudhan Reddy.
- Anasuyamma and Venkatraji Reddy gave up their 1/3rd claim in the suit schedule C house property in Karkalpahad Village.
- Madhusudhan Reddy paid Rs 2,20,000 to Anasuyamma and Venkatraji Reddy.
- Crucially, Madhusudhan Reddy surrendered all his claims to the properties of his mother, Manikyamma, in favour of Anasuyamma and Venkatraji Reddy.
On September 7, 1990, the High Court disposed of CCCA No. 86 of 1984 in terms of this recorded compromise.
The Subsequent Alienation and Challenge
Despite having relinquished his claims over Manikyamma’s share, Madhusudhan Reddy executed registered Gift Deed No. 4257 of 2007 on April 24, 2007, gifting several parcels of land in Karkalpahad Village to Siddhartha Reddy (son of Venkat Reddy and grandson of Janardhan Reddy). The gifted lands pertained to Survey Nos. 2, 70, 130, 135, 136, and 137.
Challenging this transfer, Anasuyamma, Venkatraji Reddy, and Gunna Malinidevi (Venkatraji Reddy’s sister by birth, who had purchased 1 Acre 22 Guntas in Survey No. 2 from him in 1998) filed O.S. No. 250 of 2007 before the Senior Civil Judge, Mahabubnagar. The suit sought:
- A declaration of title over the schedule lands.
- A declaration that registered Gift Deed No. 4257 of 2007 was null and void.
- Mutation of revenue records.
- A permanent injunction restraining interference with their possession.
The defendants to the suit were Madhusudhan Reddy, Venkat Reddy, and Siddhartha Reddy. Anasuyamma died during the pendency of the suit.
On April 9, 2012, the Senior Civil Judge dismissed the suit, holding that the compromise decree dated September 7, 1990, in CCCA No. 86 of 1984 had no evidentiary value. On appeal, the Telangana High Court dismissed Appeal Suit No. 372 of 2012 on December 12, 2022, affirming the Trial Court’s verdict.
Stand of the Parties
Before the Supreme Court, the appellants (Venkatraji Reddy as legal representative of Anasuyamma, and Gunna Malinidevi) challenged the dismissal, contending that Madhusudhan Reddy possessed no right or title to gift the properties in question in 2007, as those lands were allotted to Manikyamma under the 1959 settlement and Madhusudhan Reddy had unequivocally surrendered all claims to her share under the 1986 court-recorded compromise.
On the other hand, none of the respondents—comprising the legal representatives of Madhusudhan Reddy, the legal representatives of Venkat Reddy, Siddhartha Reddy, and subsequent purchasers—appeared before the apex court to contest the appeal, despite service of notice.
Court’s Analysis and Observations
Opening its analysis, the Supreme Court remarked that the dispute:
“beseeches closure. However, the judgment dated 12.12.2022 passed by the Telangana High Court in Appeal Suit No. 372 of 2012, impugned presently, failed to achieve that objective.”
Examining the record of title, the Bench found that the properties gifted by Madhusudhan Reddy in 2007 never fell to his share under the 1959 family settlement, which had allotted him only 1 Acre 30 Guntas in Survey No. 15 of Karkalpahad Village. The gifted parcels were part of Manikyamma’s allotment, over which Madhusudhan Reddy had completely given up his claims under the 1986 compromise deed that received judicial confirmation in CCCA No. 86 of 1984.
The Supreme Court noted that the High Court:
“failed to draw the correct inferences from the past history, in terms of the family settlement of 1959 and the compromise of 1986, which had the seal of approval of the High Court, vide the judgment dated 07.09.1990 in CCCA No. 86 of 1994.”
Highlighting the Trial Court and High Court’s disregard of facts, the Bench observed:
“Non-application of mind by the learned Judge is patent from the observation that ‘execution of the Gift Deed dated 24.04.2007 was never disputed’. In saying so, the learned Judge lost sight of the fact that O.S. No. 250 of 2007 was filed on 21.08.2007 challenging the said gift deed.”
The Court further held that the High Court erred in concluding that because Manikyamma died during the pendency of the suit and was not entitled to any share, Venkatraji Reddy’s claim had no merit. The Bench pointed out that this finding ignored both the 1959 settlement and the 1986 compromise, under which Madhusudhan Reddy had surrendered his claims to Manikyamma’s allotment in return for acquiring full rights over the Himayatnagar property.
Consequently, the Bench ruled:
“Founded on such fundamental errors, the judgments of the High Court and the Trial Court cannot be sustained.”
Taking note of the respondents’ complete absence despite an interim status quo order passed on May 16, 2023, the Court observed:
“Their failure to do so speaks for itself.”
Decision
The Supreme Court allowed the civil appeal and set aside the judgment and decree dated December 12, 2022, in AS No. 372 of 2012 passed by the Telangana High Court, as well as the judgment and decree dated April 9, 2012, in O.S. No. 250 of 2007 passed by the Senior Civil Judge, Mahabubnagar.
The Court decreed original suit O.S. No. 250 of 2007 as prayed for by the appellants. There was no order as to costs.
Case Title: B. Anasuyamma (Died) Per LR and Another v. B. Madhusudhan Reddy (Died) Per LRs and Others
Case No.: Special Leave Petition (C) No. 6930 of 2023
Bench: Justice Sanjay Kumar and Justice Sanjeev Sachdeva
Date: October 14, 2026
