Essential Requirements To Complete Gift Deeds Under Transfer Of Property Act Would Also Apply To Settlement Deeds: Kerala High Court

The Kerala High Court has held that the requirements to complete a Gift deed provided under Transfer of Property Act would also apply to a settlement deed, even though there is a slight difference between the two. For context, Section 122 of the Transfer of Property Act pertains to Gifts and states, "Gift is the transfer of certain existing moveable or immoveable 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".Section 123 meanwhile states that acceptance of a Gift must be made during the lifetime of the donor and while he is still capable of giving; if the donee dies before acceptance, the gift is void.Justice A. Badharudheen passed the decision while considering an appeal challenging trial court's declaration that the plaint schedule property belonged to the 1st respondent (plaintiff). BackgroundThe suit was preferred by the plaintiff for declaration of her title over plaint schedule property and for recovery of possession from the defendants who had trespassed on the same. The plaintiff primarily relied on a settlement deed (Ext. A1) executed by one late Ramachandran, who was the husband of D3 and father of D4. Defendants 1 and 2 contended that they were the bona fide purchasers of the property who got title from defendants 3 and 4 after the property devolved upon them subsequent to the death of Ramachandran.After considering the evidence given by PW3 document writer and the plaintiff herself, the trial court found that the plaintiff perfected title over the property on the strength of the settlement deed. It also granted an injunction against the defendants.FindingsOne of the issues before the Court was whether the finding of the trial court as to the validity of the settlement deed was correct. Another issue was whether the claim of defendants 1 and 2 as bona fide purchasers would be successful.Relying on the decision of this Court in Gopinath K.I.V. v. K.I.V. Vimala, the learned Single Judge found that the provisions of S.123 of the TP Act and S.68 of the Evidence Act would apply in this case. Therefore, it would be mandatory to examine an attesting witness to prove the settlement deed. The Court observed:“…In fact, even though Ext.A1 is a settlement deed, the essentials to complete the gift as mandated under Section 122 of Transfer of Property Act, 1882 (`T.P Act' for short hereafter) would apply in cases of settlement deed also even though there is a slight difference between gift deed and settlement deed even if these terms are used interchangeably…”The Court also relied on the Apex's Court decision in Naresh Kumari v. Chameli and found that possession is not mandatory in this case as per S.123 TP Act. Since in the present transaction, the essential elements including acceptance are present, the Court found that the plaintiff perfected title through the settlement deed.With respect to the issue of whether the defendants 1 and 2 were bona fide purchasers, the Court held that they were not, since they were not vigilant enough to obtain an encumbrance certificate to enquire about the liabilities on the property purchased. The Court, thus, dismissed the appeal.Case No: RFA No. 491 of 2005-BCase Title: Abraham, S/o Chacko and others v. Ajitha Jayakumar and othersCitation: 2025 LiveLaw (Ker) 292Counsel for the Appellants: A.A. Mohammed Nazir, Denizen Komath, S. Santhosh KumarCounsel for Respondents: M.V.S. NampoothiryClick to Read/Download Order

Essential Requirements To Complete Gift Deeds Under Transfer Of Property Act Would Also Apply To Settlement Deeds: Kerala High Court

K. Salma Jennath

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