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ITEM No. 1A            Court No. 3                SECTION XIIA (For Judgment)                  

S U P R E M E   C O U R T   O F   I N D I A                           RECORD OF PROCEEDINGS

      CIVIL APPEAL NO.  4195 OF 2008     

RENIKUNTLA RAJAMMA (D) BY LRS.. Appellant (s)

                             VERSUS

K.SARWANAMMA Respondent (s)

Date : 17.07.2014  This  Petition was called on for judgment  today.

         For Appellant (s)  Mr. Nitin S.Tambwekar, Adv.

 Mr. B.S.Sai, Adv.  Mr. K.Rajeev, Adv.

 For Respondent(s)   Mr. V.R.Anumolu, Adv.                         

Hon'ble Mr. Justice  T.S.Thakur pronounced  

Judgment of the Bench comprising His Lordship and  

Hon'ble  Mr. Justice  V.Gopala  Gowda  and  Hon'ble  

Mr. Justice C.Naggapan  

   The appeal is  dismissed  in terms of the signed  

judgment.  There shall be no order as to costs.

         (Shashi Sareen)    (Veena Khera)        Court Master         Court Master  

 Signed Reportable judgment is placed on the file.

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     REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 4195  OF 2008

Renikuntla Rajamma (d) by LRs. …Appellants

Versus

K. Sarwanamma …Respondent

J U D G M E N T

T.S. THAKUR, J.

1. An apparent conflict between two earlier decisions rendered  

by  this  Court  one  in  Naramadaben  Maganlal  Thakker  v.   

Pranjivandas Maganlal Thakker & Ors. (1997) 2 SCC 255  

and  the  other  in  K.  Balakrishnan  v.  K.  Kamalam &  Ors.   

(2004) 1 SCC 581 has led to this reference to a larger bench  

for an authoritative pronouncement as to the true and correct  

interpretation  of  Sections  122  and  123  of  The  Transfer  of  

Property Act,  1882.  Before we deal  with the precise area in  

which the two decisions take divergent views, we may briefly set  

out the factual matrix in which the controversy arises.  2. The plaintiff-respondent in this appeal filed O.S. No.979 of  

1989 for a declaration to the effect that revocation deed dated

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5th March, 1986 executed by the defendant-appellant purporting  

to revoke a gift deed earlier executed by her was null and void.  

The plaintiff’s case as set out in the plaint was that the gift deed  

executed by the defendant-appellant was valid in the eyes of law  

and  had  been  accepted  by  the  plaintiff  when  the  donee-

defendant had reserved to herself  during for life,  the right to  

enjoy the benefits arising from the suit property. The purported  

revocation  of  the  gift  in  favour  of  the  plaintiff-respondent  in  

terms of the revocation deed was, on that basis, assailed and a  

declaration about its being invalid and void ab initio prayed for.   3. The suit was contested by the defendant-appellant herein  

on  several  grounds  including  the  ground  that  the  gift  deed  

executed in favour of the plaintiff  was vitiated by fraud, mis-

representation  and  undue  influence.  The  parties  led  evidence  

and went through the trial with the trial Court eventually holding  

that  the  deed  purporting  to  revoke  the  gift  in  favour  of  the  

plaintiff  was  null  and  void.  The  Trial  Court  found  that  the  

defendant had failed to prove that the gift deed set up by the  

plaintiff was vitiated by fraud or undue influence or that it was a  

sham or nominal document. The gift, according to trial Court,  

had  been  validly  made  and  accepted  by  the  plaintiff,  hence,  

irrevocable in nature. It was also held that since the donor had

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taken no steps to assail the gift made by her for more than 12  

years,  the  same  was  voluntary  in  nature  and  free  from any  

undue influence, mis-representation or suspicion. The fact that  

the donor had reserved the right to enjoy the property during  

her life time did not affect the validity of the deed, opined the  

trial Court.   4. In the first appeal preferred against the said judgment and  

decree, the first Additional District Judge, Warangal affirmed the  

view taken  by  the  trial  Court  and held  that  the  plaintiff  had  

satisfactorily proved the execution of a valid gift in his favour  

and that the revocation of a validly made gift deed was legally  

impermissible. The First Appellate Court also held that the gift  

deed was not a sham document, as alleged by the defendant  

and  that  its  purported  cancellation/revocation  was  totally  

ineffective.  The  defendant’s  case  that  she  had  apprehended  

grabbing of the property by Sankaraiah forcing her to make a  

sham  gift  deed  was  held  not  established  especially  when  

Sankaraiah had died three years prior to the execution of the  

revocation deed by the defendant.  If the gift deed was executed  

by the donor to save the property from the covetous eyes of  

Sankaraiah, as alleged by the defendant, there was no reason  

why the defendant should have waited for three years after the

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death  of  Sankaraiah  before  revoking  the  same  reasoned  the  

Court.  The first Appellate Court also affirmed the finding of the  

trial  Court  that  the donee had accepted the gift  made in  his  

favour. The appeal filed by the defendant (appellant herein) was  

on those findings dismissed.  5. Concurrent findings of facts recorded by the Courts below  

did not deter the appellants from preferring Civil Second Appeal  

No.809 of  2003 in  which  the appellants  made an attempt  to  

assail  the said findings.  The High Court,  however,  declined to  

interfere with the judgments and orders impugned before it and  

dismissed the second appeal of the appellant holding that the  

case set up by the defendant that the gift was vitiated by undue  

influence or fraud had been thoroughly disproved at the trial.  

The present appeal is the last ditch attempt by the defendants to  

assail the findings recorded against them.  6. When the  special  leave  petition  came up for  preliminary  

hearing before a Division bench of this Court, the only question  

which  was  urged  on  behalf  of  the  appellant  was  whether  

retention of possession of the gifted property for enjoyment by  

the donor during her life time and the right to receive the rents  

of the property in any way affected the validity of the gift.  That  

a gift deed was indeed executed by the donor in favour of the

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donee  and  that  the  donee  had  accepted  the  gift  was  not  

challenged and the finding to that effect has not been assailed  

even before us. So also the challenge to the gift on the ground  

of  fraud,  misrepresentation and undue influence,  having been  

repelled  by  the  Courts  below,  the  gift  stands  proved  in  all  

material  respects.   All  that  was  contended  on  behalf  of  the  

appellant was that since the donor had retained to herself the  

right to use the property and to receive rents during her life  

time, such a reservation or retention rendered the gift invalid. A  

conditional  gift  was  not  envisaged  by  the  provisions  of  the  

Transfer  of  Property  Act,  argued  the  learned  counsel  of  the  

appellant.  Inasmuch  as  the  gift  deed  failed  to  transfer,  title,  

possession and the right to deal with the property in absolute  

terms in favour of the donee the same was no gift in the eyes of  

law,  contended learned counsel  for  the  appellant.  Reliance  in  

support of that submission was placed by the learned counsel  

upon  the  decision  of  this  Court  in  Naramadaben  Maganlal  

Thakker  v.  Pranjivandas  Maganlal  Thakker  and  Ors.   

(1997) 2 SCC 255. 7.  On behalf of the respondents it was per contra argued that  

the validity of the gift having been upheld by the Courts below,  

the only question that remains to be examined was whether a

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gift which reserved a life interest for the donor could be said to  

be invalid. That question was, according to the learned counsel,  

squarely answered in favour of the respondents by the decisions  

of  this  Court  in  K.  Balakrishnan  v.  K.  Kamalam  &  Ors.   

(2004) 1 SCC 581. 8. Reliance  was  also  placed  by  the  learned  counsel  upon  

Bhagwan Prasad & Anr. v. Harisingh  AIR 1925 Nagpur   

199,  Revappa v. Madhava Rao AIR 1960 Mysore 97 and  

Tirath Singh v. Manmohan AIR 1981 Punj. & Haryana 174  

in support of the submission that transfer of possession was a  

condition  under  the  Hindu  Law for  a  valid  gift  which  Rule  of  

Hindu Law stood superseded by Section 123 of The Transfer of  

Property Act.  9. Chapter VII of the Transfer of Property Act, 1882 deals with  

gifts generally and,  inter alia, provides for the mode of making  

gifts. Section 122 of the Act defines ‘gift’ as a transfer of certain  

existing movable or immovable property made voluntarily and  

without consideration by one person called the donor to another  

called the donee and accepted by or on behalf of the donee. In  

order to constitute a valid gift, acceptance must, according to  

this provision, be made during the life time of the donor and  

while he is still capable of giving. It stipulates that a gift is void if

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the donee dies before acceptance.  10. Section 123 regulates mode of making a gift and, inter alia,  

provides that a gift of immovable property must be effected by a  

registered instrument signed by or on behalf of the donor and  

attested  by  at  least  two  witnesses.  In  the  case  of  movable  

property,  transfer  either by a registered instrument signed as  

aforesaid or by delivery is valid under Section 123. Section 123  

may at this stage be gainfully extracted:

“123. Transfer how effected – For the making of a gift   of immoveable property, the transfer must be effected by   a  registered  instrument  signed  by  or  on  behalf  of  the  donor, and attested by at least two witnesses.

For  the  purpose  of  making  a  gift  of  moveable   property,  the  transfer  may  be  effected  either  by  a   registered instrument signed as aforesaid or by delivery.

Such delivery may be made in the same way as   goods sold may be delivered.”  

11. Sections  124 to  129  which  are  the  remaining  provisions  

that comprise Chapter VII deal with matters like gift of existing  

and future property, gift made to several persons of whom one  

does  not  accept,  suspension  and  revocation  of  a  gift,  and  

onerous gifts including effect of non-acceptance by the donee of  

any  obligation  arising  thereunder.  These  provisions  do  not  

concern us for the present.  All that is important for the disposal  

of the case at hand is a careful reading of Section 123 (supra)  

which  leaves  no  manner  of  doubt  that  a  gift  of  immovable

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property can be made by a registered instrument singed by or  

on behalf of the donor and attested by at least two witnesses.  

When  read  with  Section  122  of  the  Act,  a  gift  made  by  a  

registered instrument duly signed by or on behalf of the donor  

and attested by at least two witnesses is valid, if the same is  

accepted by or on behalf  of the donee. That such acceptance  

must be given during the life time of the donor and while he is  

still capable of giving is evident from a plain reading of Section  

122 of the Act. A conjoint reading of Sections 122 and 123 of the  

Act makes it abundantly clear that “transfer of possession” of the  

property covered by the registered instrument of the gift duly  

signed by the donor and attested as required is not a sine qua  

non for  the  making  of  a  valid  gift  under  the  provisions  of  

Transfer of Property Act,  1882. Judicial  pronouncements as to  

the true and correct interpretation of Section 123 of the T.P. Act  

have for a fairly long period held that Section 123 of the Act  

supersedes  the  rule  of  Hindu  Law  if  there  was  any  making  

delivery of possession an essential condition for the completion  

of a valid gift. A full bench comprising five Hon’ble Judges of the  

High Court of Allahabad has in Lallu Singh v. Gur Narain and  

Ors. AIR 1922 All. 467 referred to several such decisions in

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which the provisions of Section 123 have been interpreted to be  

overruling the Hindu Law requirement of delivery of possession  

as a condition for making of a valid gift. This is evident from the  

following passage from the above decision where the High Court  

repelled in no uncertain terms the contention that Section 123 of  

the T.P. Act merely added one more requirement of law namely  

attestation and registration of a gift deed to what was already  

enjoined by the Hindu Law and that Section 123 did not mean  

that where there was a registered instrument duly signed and  

attested, other requirements of Hindu Law stood dispensed with:

“7.  Dr.  Katju,  on behalf  of  the  appellant,  has  strongly   contended that by Section 123 it was merely intended to   add  one  more  requirement  of  law,  namely,  that  of   attestation  and  registration,  to  those  enjoined  by  the  Hindu Law, and that the Section did not mean that where  there  was  a  registered  document  duly  signed  and  attested, all the other requirements of Hindu Law were   dispensed  with.  Section  123  has,  however,  been  interpreted by all the High Courts continuously for a vary   long period in the way first indicated, and there is now a   uniform consensus of opinion that the effect of Section   123 is to supersede the rule of Hindu Law, if there was   any,  for  making  the  delivery  of  possession  absolutely   essential for the completion of the gift. We may only refer   to a few cases for the sake of reference, Dharmodas v.   Nistarini Dasi (1887) 14 Cal. 446, Ballbhadra v. Bhowani   (1907) 34 Cal. 853, Alabi Koya v. Mussa Koya (1901) 24   Mad. 513, Mudhav Rao Moreshvar v. Kashi Bai (1909) 34   Bom.  287,  Manbhari  v.  Naunidh  (1881)  4  All.  40,   Balmakund  v.  Bhagwandas  (1894)  16  All.  185,  and   Phulchand v. Lakkhu (1903) 25 All. 358. Where the terms   of a Statute or Ordinance are clear, then even a long and   uniform  course  of  judicial  interpretation  of  it  may  be   overruled,  if  it  is  contrary to the clear meaning of the  

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enactment but where such is not the case, then it is our   duty to accept the interpretation so often and so long put   upon the Statute by the Courts, and not to disturb those   decisions, vide the remarks of their Lordships decisions,   of  the Privy  Council  in  the case of  Tricomdas Cooverji   Bhoja v. Sri Sri Gopinath Thakur AIR 1916 P.C. 182. We   are,  therefore,  clearly  of  opinion  that  it  must  now be   accepted that the provisions of Section 123 do away with   the necessity for the delivery of possession, even if it was   required by the strict Hindu Law.”

-      

12. The logic for the above view flowed from the language of  

Section 129 of the T.P. Act which as on the date of the decision  

rendered by the High Court of Allahabad used the words “save  

as provided by Section 123 of the Act”. Section 129 of the T.P.  

Act was, before its amendment in the year 1929, as under: “129.  Saving  of  donations  mortis  causa  and  Muhammadan  Law.-Nothing  in  this  Chapter  relates  to   gifts  of  moveable  property  made  in  contemplation  of   death,  or  shall  be  deemed  to  affect  any  rule  of   Muhammadan law  or, save as provided by section 123,   any rule of Hindu or Buddhist law”.

13. A  plain  reading  of  the  above  made  it  manifest  that  the  

“rules  of  Hindu  law” and  “Buddhist  Law”  were  to  remain  

unaffected by Chapter VII except to the extent such rules were  

in conflict with Section 123 of the Transfer of Property Act.  This  

clearly implied that Section 123 had an overriding effect on the  

rules  of  Hindu  Law  pertaining  to  gift  including  the  rule  that  

required possession of  the property gifted to be given to the  

donee.  The  decisions  of  the  High  Courts  referred  to  in  the

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passage extracted above have consistently taken the view that  

Section 123 supersedes the rules of Hindu law which may have  

required delivery of possession as an essential condition for the  

completion of a gift. The correctness of that statement of law  

cannot be questioned.  The language employed in Section 129  

before its amendment was clear enough to give Section 123 an  

overriding effect vis-a-vis rules of Hindu Law.  Section 129 was  

amended by Act No. 20 of 1929 whereby the words “or, save as  

provided by Section 123, any rule of  Hindu or Buddhist  Law”  

have been deleted. Section 129 of the T.P. Act today reads as  

under:  

“129.  Saving  of  donations  mortis  causa  and  Muhammadan Law – Nothing in this Chapter relates to   gifts  of  moveable  property  made  in  contemplation  of   death,  or  shall  be  deemed  to  affect  any  rule  of   Muhammadan law.”             

                      14. The above leaves no doubt that the law today protects only  

rules  of  Muhammadan  Law  from  the  rigors  of  Chapter  VII  

relating to gifts. This implies that the provisions of Hindu Law  

and Buddhist Law saved under Section 129  (which saving did  

not extend to saving such rules from the provisions of Section   

123 of the T.P. Act) prior to its amendment are no longer saved  

from the overriding effect of Chapter VII. The amendment has

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made the position more explicit  by bringing all  other rules of  

Hindu  and  Buddhist  Law  also  under  the  Chapter  VII  and  

removing the protection earlier available to such rules from the  

operation of Chapter VII.  Decisions of the High Court of Mysore  

in Revappa v. Madhava Rao and Anr. AIR 1960 Mysore 97   

and High Court of Punjab and Haryana in Tirath v. Manmohan  

Singh and Ors. AIR 1981 Punjab and Haryana 174, in our  

opinion, correctly take the view that Section 123 supersedes the  

rules  of  Hindu Law insofar  as  such rules  required  delivery  of  

possession to the donee. 15. The matter can be viewed from yet another angle.  Section  

123 of the T.P. Act is in two parts. The first part deals with gifts  

of immovable property while the second part deals with gifts of  

movable property. Insofar as the gifts of immovable property are  

concerned,  Section  123  makes  transfer  by  a  registered  

instrument  mandatory.  This  is  evident  from the  use  of  word  

“transfer  must  be  effected”  used  by  Parliament  in  so  far  as  

immovable  property  is  concerned.  In  contradiction  to  that  

requirement the second part of Section 123 dealing with gifts of  

movable property, simply requires that gift of movable property  

may  be  effected  either  by  a  registered  instrument  signed  as  

aforesaid or “by delivery”. The difference in the two provisions

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lies in the fact that in so far as the transfer of movable property  

by  way  of  gift  is  concerned  the  same can  be  effected  by  a  

registered instrument or by delivery.  Such transfer in the case  

of immovable property no doubt requires a registered instrument  

but the provision does not make delivery of possession of the  

immovable property gifted as an additional requirement for the  

gift to be valid and effective.  If the intention of the legislature  

was to make delivery of possession of the property gifted also as  

a condition precedent for a valid gift,  the provision could and  

indeed would have specifically  said so.   Absence of  any such  

requirement can only lead us to the conclusion that delivery of  

possession is not an essential prerequisite for the making of a  

valid gift in the case of immovable property. 16. That brings us to the decisions of this Court which have led  

to this reference. In K. Balakrishnan’s case (supra) the donor  

executed  a  gift  deed  of  a  specified  share  of  the  property  

inherited by her from her maternal grandfather in favour of her  

minor son who was the donee-appellant before the Court and  

her four year old daughter. The property gifted included a school  

building. The gift deed stipulated that the responsibility to sign in  

regard to the said school and the right to income would be with  

the donor during her lifetime and thereafter would be vested in

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the  donee.  After  the  execution  of  the  gift  deed  the  donor  

cancelled the same and made a will bequeathing the property in  

favour of her daughter whereupon the donee-appellant filed a  

suit for declaration of his title to the suit property on the basis of  

the  gift  and  a  further  declaration  for  annulment  of  the  

cancellation deed and the will executed by the donor. The Trial  

Court dismissed the suit while the First Appellate Court decreed  

the same.  The High Court restored the view taken by the Trial  

Court and held that when the donor had reserved to herself the  

right  to  sign  the  papers  with  respect  to  management  of  the  

school and the right to take usufruct from the property where  

the school was situated, no property was transferred under the  

deed. In appeal before this Court, the view taken by the High  

Court was reversed and that taken by the First Appellate Court  

restored.  This Court held:

“10. We have critically examined the contents of the gift   deed. To us, it appears that the donor had very clearly   transferred to the donees ownership and title in respect   of her 1/8th share in properties. It was open to the donor   to transfer by gift title and ownership in the property and   at the same time reserve its possession and enjoyment to   herself during her lifetime. There is no prohibition in law   that ownership in a property cannot be gifted without its   possession and right of enjoyment. Under Section 6 of   the Transfer of Property Act “property of any kind may be  transferred” except those mentioned in clauses (a) to (i).  Section 6 in relevant part reads thus:

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“6. What may be transferred.—Property of any kind  may be transferred, except as otherwise provided by this   Act or by any other law for the time being in force.

(a) * * * (b)  A  mere  right  to  re-entry  for  breach  of  a   

condition  subsequent  cannot  be  transferred  to  anyone  except the owner of the property affected thereby.

(c) * * * (d)  An  interest  in  property  restricted  in  its   

enjoyment to the owner personally cannot be transferred   by him.

(e) A mere right to sue cannot be transferred.”

11. Clause (d) of Section 6 is not attracted on the terms   of the gift deed herein because it was not a property, the   enjoyment  of  which  was  restricted  to  the  owner   personally. She was absolute owner of the property gifted   and it was not restricted in its enjoyment to herself. She  had inherited it from her maternal father as a full owner.  The  High  Court  was,  therefore,  apparently  wrong  in   coming  to  the  conclusion  that  the  gift  deed  was   ineffectual  merely  because  the  donor  had  reserved  to   herself  the  possession  and  enjoyment  of  the  property   gifted.”

(emphasis supplied)        17. We are in respectful agreement with the statement of law  

contained in the above passage. There is indeed no provision in  

law that ownership in property cannot be gifted without transfer  

of possession of such property. As noticed earlier, Section 123  

does not make the delivery of possession of the gifted property  

essential for validity of a gift.  It is true that the attention of this  

Court does not appear to have been drawn to the earlier decision  

rendered in  Naramadaben Maganlal Thakker (supra) where  

this Court had on a reading of the recital of the gift deed and the

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cancellation deed held that the gift was not complete. This Court  

had in that case found that the donee had not accepted the gift  

thereby making the gift incomplete. This Court, further, held that  

the  donor  cancelled  the  gift  within  a  month  of  the  gift  and  

subsequently  executed a  Will  in  favour  of  the  appellant  on a  

proper  construction  of  the  deed  and  the  deed  cancelling  the  

same this Court held that the gift in favour of the donee was  

conditional and that there was no acceptance of the same by the  

donee. The gift deed conferred limited right upon the donee and  

was to become operative after the death of the donee. This is  

evident from the following passage from the said judgment:

“7. It  would  thus  be  clear  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 the absolute owner of the property. The   question  is  whether  the  gift  in  question  had  become  complete under Section 123 of the TP Act? It is seen from   the recitals of the gift deed that Motilal Gopalji gifted the   property  to  the  respondent.  In  other  words,  it  was  a   conditional gift. There is no recital of acceptance nor is   there any evidence in proof of acceptance. Similarly, he   had specifically stated that the property would remain in   his  possession  till  he  was  alive.  Thereafter,  the  gifted   property would become his property and he was entitled   to collect  mesne profits in respect of the existing rooms  throughout his life. The gift deed conferred only limited   right upon the respondent-donee. The gift was to become   operative after the death of the donor and he was to be   entitled  to  have  the  right  to  transfer  the  property   absolutely by way of gift or he would be entitled to collect   the mesne profits. It would thus be seen that the donor  

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had  executed  a  conditional  gift  deed  and  retained  the   possession  and  enjoyment  of  the  property  during  his   lifetime…..”

18. The above decision clearly rests on the facts of that case. If  

the  gift  was  conditional  and  there  was  no  acceptance  of  the  

donee  it  could  not  operate  as  a  gift.  Absolute  transfer  of  

ownership  in  the  gifted  property  in  favour  of  the  donee  was  

absent in that case which led this Court to hold that the gift was  

conditional and had to become operative only after the death of  

the donee. The  judgment  is  in  that  view  clearly  

distinguishable and cannot be read to be an authority for the  

proposition  that  delivery  of  possession  is  an  essential  

requirement for making a valid gift.

19. In the case at hand as already noticed by us, the execution  

of registered gift deed and its attestation by two witnesses is not  

in dispute.  It has also been concurrently held by all the three  

courts below that the donee had accepted the gift. The recitals in  

the gift deed also prove transfer of absolute title in the gifted  

property from the donor to the donee. What is retained is only  

the right to use the property during the lifetime of the donor  

which does not in any way affect the transfer of ownership in  

favour of the donee by the donor.

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20. The  High  Court  was  in  that  view  perfectly  justified  in  

refusing to  interfere  with  the  decree  passed in  favour  of  the  

donee. This appeal accordingly fails and is hereby dismissed but  

in the circumstances without any orders as to costs.  

………………………………….…..…J.         (T.S. THAKUR)

………………………………….…..…J.         (V. GOPALA GOWDA)

    ………………………………….…..…J. New Delhi,   (C. NAGAPPAN) July 17, 2014