Date of the Judgment: 24 January 2022
Citation: Civil Appeal No. 364 of 2022
Judges: M.R. Shah, J., and Sanjiv Khanna, J.
Can a gift deed be considered valid if the donor’s intention is questionable? The Supreme Court of India addressed this issue in a recent case, examining the validity of a gift deed where the donor’s understanding and voluntariness were challenged. The Court upheld the concurrent findings of the lower courts, emphasizing the importance of proving the donor’s free will and understanding in gift transactions. This judgment was delivered by a two-judge bench comprising Justice M.R. Shah and Justice Sanjiv Khanna, with the opinion authored by Justice Sanjiv Khanna.
Case Background
The case revolves around a land dispute between Keshav, the nephew of the deceased Hardei, and Gian Chand, the son of Hardei’s brother. Hardei, who passed away in 1991 without any children, owned land in Mouza Jakharal and Mohalo Talai. Gian Chand and Dhanbir, filed a suit claiming that Hardei had gifted the land to them via a registered gift deed dated 23rd December 1985. Keshav contested this claim, asserting that he was a tenant on the land and that Hardei had never intended to gift the land to Gian Chand and Dhanbir.
Timeline
| Date | Event |
|---|---|
| 23rd December 1985 | Gift deed purportedly executed by Hardei in favor of Gian Chand and Dhanbir. |
| 1st January 1986 | Gift deed registered with the Sub-Registrar, Salooni. |
| 1989 | Gian Chand and Dhanbir apply for mutation of the land in their names. Hardei objects and denies executing the gift deed. |
| 13th May 1989 | Application for mutation rejected by revenue authority due to Hardei’s objection. |
| 1991 | Hardei passes away. |
| 4th/6th December 1991 | Gian Chand and Dhanbir file Civil Suit No. 149 of 1991 seeking declaration of ownership based on the gift deed. |
| 17th December 1997 | Trial court dismisses the suit, finding the gift deed to be of “decrepit origin”. |
| 1998 | First appellate court dismisses the appeal, upholding the trial court’s decision. |
| 14th June 2010 | High Court allows the second appeal, reversing the concurrent findings. |
| 28th August 2017 | Supreme Court sets aside the High Court judgment and remits the matter for fresh hearing. |
| 8th August 2018 | High Court allows the second appeal, decreeing the suit in favor of Gian Chand and Dhanbir. |
| 24th January 2022 | Supreme Court allows the appeal, setting aside the High Court judgment and upholding the decisions of the trial court and first appellate court. |
Course of Proceedings
The trial court, the Sub-Judge 1st Class, Chamba, Himachal Pradesh, dismissed the suit, stating that the gift deed was of “decrepit origin” and that Hardei had opposed the mutation of the land during her lifetime. The first appellate court, the District Judge, Chamba Division, also dismissed the appeal, affirming the trial court’s findings. However, the High Court of Himachal Pradesh initially allowed the second appeal, reversing the concurrent findings. The Supreme Court then set aside this judgment and remitted the matter back to the High Court. In a subsequent judgment, the High Court again allowed the second appeal in favor of the plaintiffs. This decision was then challenged before the Supreme Court.
Legal Framework
The judgment refers to Section 122 and Section 123 of the Transfer of Property Act, 1882, which deal with the definition of a gift and how to effect a transfer by gift.
*Section 122 of the Transfer of Property Act, 1882* defines a gift as “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 of the Transfer of Property Act, 1882* states how a gift must be effected, stating that “For the purpose of making 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.”
Arguments
Arguments by Gian Chand and Dhanbir (Plaintiffs):
- The gift deed was a registered document and thus, enjoys a presumption of truth.
- Devia (PW-4), an attesting witness, and Ratan Chand (PW-3), a witness present during registration, testified to the execution of the gift deed.
- Hardei was explained the contents of the document at the time of registration and she had then appended her thumb impression.
Arguments by Keshav (Defendant):
- Hardei was an old, illiterate lady who lived with Keshav, who took care of her daily needs.
- There was no reason for Hardei to execute a gift deed in favor of the plaintiffs when she was dependent on Keshav.
- Hardei had denied executing the gift deed before the revenue authority in 1989.
- The plaintiffs did not take any steps for mutation of the land in their favor from 1986 to 1989.
- Keshav was in possession of the land as a tenant for the last 15 years, as admitted by Hardei before the revenue authorities.
| Main Submission | Sub-Submissions (Plaintiffs) | Sub-Submissions (Defendant) |
|---|---|---|
| Validity of Gift Deed | ✓ Registered document, presumption of truth. ✓ Attesting witness and witness to registration testified. ✓ Hardei understood contents at registration. |
✓ Hardei was old, illiterate, and dependent on Keshav. ✓ No reason for Hardei to gift land to plaintiffs. ✓ Hardei denied executing the gift deed. ✓ Plaintiffs did not apply for mutation for 3 years. ✓ Keshav was in possession as tenant. |
Innovativeness of the argument: The defendant’s argument was innovative in challenging the very voluntariness and intention behind the gift deed, highlighting the circumstances surrounding Hardei’s life and her dependence on Keshav, which raised doubts about her free will in executing the gift deed.
Issues Framed by the Supreme Court
The Supreme Court did not explicitly frame issues in the judgment, but the core issue revolved around:
- Whether the High Court was correct in reversing the concurrent findings of the trial court and the first appellate court, which had held the gift deed to be invalid.
- Whether the gift deed was executed voluntarily by Hardei with free will and understanding.
Treatment of the Issue by the Court
| Issue | How the Court Dealt with the Issue |
|---|---|
| Whether the High Court was correct in reversing the concurrent findings of the trial court and the first appellate court? | The Supreme Court held that the High Court erred in reversing the concurrent findings of the lower courts, which had considered the factual context and circumstances surrounding the execution of the gift deed. The Supreme Court emphasized that these findings were not perverse and were based on a holistic examination of evidence. |
| Whether the gift deed was executed voluntarily by Hardei with free will and understanding? | The Supreme Court upheld the lower courts’ findings that the gift deed lacked voluntariness and animus. The Court noted that Hardei was an old, illiterate woman dependent on Keshav, and there was no clear reason why she would gift her land to the plaintiffs. The Court also considered the fact that Hardei had denied executing the gift deed before the revenue authority. |
Authorities
The following authorities were considered by the court:
| Authority | Court | How it was Considered |
|---|---|---|
| Rao Saheb v. Rangnath Gopalrao Kawathekar (Dead By LRs) and Others, (1972) 4 SCC 181 | Supreme Court of India | The Court cited this case to support the principle that if a party pleads that they did not know the contents of a document, the party proving the document must show that the executing party had knowledge of its contents. |
| Krishna Mohan Kul alias Nani Charan Kul and Anr. v. Pratima Maity and Ors., (2004) 9 SCC 468 | Supreme Court of India | The Court cited this case to emphasize that in fiduciary relationships, when the validity of a transaction is in question, it is relevant to see if the person conferring the benefit had competent and independent advice. |
| Ladli Parshad Jaiswal v. The Karnal Distillery Co. Ltd., Karnal and Others, AIR 1963 SC 1279 | Supreme Court of India | The Court cited this case to state that the question of whether a person was in a position to dominate the will of another and procure a deed by undue influence is a question of fact, and a finding thereon is a finding of fact, which is not liable to be reopened in second appeal. |
| Bellachi (D) by LRs. v. Pakeeran, (2009) 12 SCC 95 | Supreme Court of India | The Court cited this case to reiterate that a finding on undue influence is a finding of fact, which cannot be reopened in second appeal. |
| Nazir Mohamed v. J. Kamala and Others, 2020 SCC OnLine SC 676 | Supreme Court of India | The Court cited this case to support the principle that concurrent findings of fact can be interfered with in second appeal only if they are perverse or some gross illegalities have been committed. |
| Hero Vinoth (Minor) v. Seshammal, (2006) 5 SCC 545 | Supreme Court of India | The Court cited this case to support the principle that concurrent findings of fact can be interfered with in second appeal only if they are perverse or some gross illegalities have been committed. |
The Court also considered the following legal provisions:
- Section 122 of the Transfer of Property Act, 1882: Definition of a gift.
- Section 123 of the Transfer of Property Act, 1882: How a gift must be effected.
- Section 16(3) of the Indian Contract Act, 1872: Undue influence in contracts, particularly concerning pardanashin ladies, which the court applied to old, illiterate, ailing or infirm persons.
Judgment
| Submission | Treatment by the Court |
|---|---|
| Plaintiffs’ submission that the gift deed is a registered document and thus enjoys presumption of truth. | The Court acknowledged that a registered document carries a presumption of truth but emphasized that this presumption is rebuttable. The Court held that the lower courts were correct in considering the surrounding circumstances and factual context to determine the validity of the gift deed. |
| Plaintiffs’ submission that the attesting witness and witness to registration testified to the execution of the gift deed. | The Court noted the testimony of the witnesses but highlighted the discrepancies and contradictions in their statements, as pointed out by the lower courts. The Court also noted that the trial court and first appellate court had considered the lack of voluntariness and animus of Hardei to execute the gift deed. |
| Plaintiffs’ submission that Hardei was explained the contents of the document at the time of registration. | The Court did not give much credence to this submission as the lower courts had found that Hardei was an old, illiterate woman with auditory impairment, who was dependent on Keshav. The Court found that the lower courts were right in considering that the gift deed was not executed voluntarily by Hardei. |
| Defendant’s submission that Hardei was old, illiterate, and dependent on Keshav. | The Court agreed with this submission, noting that this was a crucial factor in determining the validity of the gift deed. The Court stated that the lower courts had rightly considered the factual context and circumstances surrounding the execution of the gift deed. |
| Defendant’s submission that there was no reason for Hardei to gift land to plaintiffs. | The Court accepted this submission, stating that the lack of any apparent reason for Hardei to gift her land to the plaintiffs raised doubts about the genuineness of the gift deed. |
| Defendant’s submission that Hardei denied executing the gift deed before the revenue authority. | The Court gave significant weight to this submission, stating that Hardei’s denial of executing the gift deed during her lifetime was a major factor in determining that the gift deed was not valid. |
| Defendant’s submission that plaintiffs did not apply for mutation for 3 years. | The Court considered this as a relevant factor that supported the defendant’s case. The Court noted that the plaintiffs’ delay in seeking mutation of the land raised doubts about the validity of the gift deed. |
| Defendant’s submission that Keshav was in possession as tenant. | The Court accepted the factual finding of the lower courts that Keshav was in possession of the land and was looking after Hardei’s needs. |
How each authority was viewed by the Court?
The Court relied on Rao Saheb v. Rangnath Gopalrao Kawathekar (Dead By LRs) and Others, [(1972) 4 SCC 181]* to emphasize that the burden of proving that the executant of a document had knowledge of its contents lies with the party seeking to prove the document. The Court used Krishna Mohan Kul alias Nani Charan Kul and Anr. v. Pratima Maity and Ors., [(2004) 9 SCC 468]* to highlight that in fiduciary relationships, it is essential to show that the person conferring the benefit had competent and independent advice. The Court cited Ladli Parshad Jaiswal v. The Karnal Distillery Co. Ltd., Karnal and Others, [AIR 1963 SC 1279]* and Bellachi (D) by LRs. v. Pakeeran, [(2009) 12 SCC 95]* to reiterate that a finding on undue influence is a finding of fact and cannot be reopened in second appeal. The Court used Nazir Mohamed v. J. Kamala and Others, [2020 SCC OnLine SC 676]* and Hero Vinoth (Minor) v. Seshammal, [(2006) 5 SCC 545]* to support the principle that concurrent findings of fact can be interfered with in second appeal only if they are perverse or some gross illegalities have been committed.
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily influenced by the following factors:
- The concurrent findings of the trial court and the first appellate court, which had thoroughly examined the factual matrix and concluded that the gift deed lacked voluntariness and animus.
- The fact that Hardei was an old, illiterate woman who was dependent on Keshav for her daily needs, which raised doubts about her free will in executing the gift deed.
- Hardei’s denial of executing the gift deed before the revenue authority, which was a crucial piece of evidence contradicting the plaintiffs’ claim.
- The plaintiffs’ failure to seek mutation of the land in their names for about four years after the execution of the gift deed, which further weakened their case.
| Sentiment | Percentage |
|---|---|
| Concurrent Findings of Lower Courts | 30% |
| Hardei’s Age, Illiteracy, and Dependency | 30% |
| Hardei’s Denial of Gift Deed | 25% |
| Plaintiffs’ Delay in Seeking Mutation | 15% |
| Ratio | Percentage |
|---|---|
| Fact | 70% |
| Law | 30% |
Logical Reasoning:
The Court considered the alternative interpretation that the registered gift deed should be presumed valid. However, this was rejected because the court found that the concurrent findings of the lower courts were based on a holistic examination of the facts and evidence. The court held that the presumption of truth of a registered document is rebuttable and that in this case, the surrounding circumstances and factual context supported the conclusion that the gift deed was not valid.
The Supreme Court upheld the decisions of the trial court and the first appellate court, stating that the High Court erred in reversing their concurrent findings. The Court emphasized the importance of proving the donor’s free will and understanding in gift transactions, especially when the donor is an old, illiterate, or infirm person. The Court found that the gift deed in question lacked the necessary voluntariness and animus, thus rendering it invalid.
The Court stated, “When a person obtains any benefit from another, the court would call upon the person who wishes to maintain the right to gift to discharge the burden of proving that he exerted no influence for the purpose of obtaining the document.” The court also observed, “The question whether a person was in a position to dominate the will of the other and procure a certain deed by undue influence is a question of fact, and a finding thereon is a finding of fact, and if arrived at fairly in accordance with the procedure prescribed, it is not liable to be reopened in second appeal.” The Court further stated, “These concurrent findings are not perverse but rather good findings based upon cogent and relevant material and evidence on record.”
The majority opinion was delivered by Justice Sanjiv Khanna, with Justice M.R. Shah concurring.
Key Takeaways
- A registered gift deed does not automatically guarantee validity; the donor’s free will and understanding are crucial.
- Courts will scrutinize gift deeds, especially when the donor is old, illiterate, or infirm, and may require proof of independent advice.
- Concurrent findings of lower courts based on a thorough evaluation of facts are given significant weight by the Supreme Court.
- The burden of proving the validity of a gift deed lies with the party claiming the benefit, especially when there is a fiduciary relationship or the donor is vulnerable.
Directions
The Supreme Court did not issue any specific directions in this case. The judgment simply set aside the High Court’s decision and upheld the decisions of the trial court and the first appellate court.
Specific Amendments Analysis
There is no specific amendment analysis in this judgment.
Development of Law
The ratio decidendi of this case is that a registered gift deed does not automatically guarantee its validity, especially when the donor is old, illiterate, or infirm. The court emphasized that the donor’s free will and understanding are paramount, and the burden of proving these elements lies with the party claiming the benefit of the gift. This judgment reinforces the principle that courts will scrutinize gift deeds and may require proof of independent advice, particularly in cases involving vulnerable donors. This decision does not change the previous positions of law but rather reinforces existing principles.
Conclusion
In conclusion, the Supreme Court’s decision in Keshav vs. Gian Chand underscores the importance of proving the donor’s free will and understanding in gift transactions. The Court upheld the concurrent findings of the lower courts, emphasizing that a registered gift deed does not automatically guarantee validity. This judgment serves as a reminder that courts will scrutinize gift deeds, especially when the donor is vulnerable, and may require proof of independent advice to ensure the transaction is fair and equitable.
Category
Parent Category: Transfer of Property Act, 1882
Child Categories: Gift, Section 122, Transfer of Property Act, 1882, Section 123, Transfer of Property Act, 1882, Property Law, Land Dispute
FAQ
Q: What is a gift deed?
A: A gift deed is a legal document that transfers ownership of property from one person (the donor) to another (the donee) without any payment or consideration. It must be registered to be legally valid for immovable property.
Q: Does a registered gift deed guarantee its validity?
A: No, a registered gift deed does not automatically guarantee its validity. The donor’s free will and understanding are crucial. If there are doubts about the donor’s capacity or intention, the court may scrutinize the transaction.
Q: What happens if the donor is old or illiterate?
A: If the donor is old, illiterate, or infirm, the court will be more cautious and may require additional proof that the donor understood the nature and consequences of the gift. The burden of proof lies on the donee to show that no undue influence was exerted.
Q: What is the significance of concurrent findings of lower courts?
A: Concurrent findings of lower courts, based on a thorough evaluation of facts, are given significant weight by the Supreme Court. These findings can only be reversed if they are perverse or if there are gross illegalities.
Q: What should one keep in mind while executing a gift deed?
A: It is crucial to ensure that the donor fully understands the nature of the transaction and is acting out of their own free will. It is advisable to seek independent legal advice, especially if the donor is old, illiterate, or infirm.
Source: Keshav vs. Gian Chand