1995 JTR(SC) 494
1998 33 AllLR 120 ; 1995 2 CurCC(SC) 458 ; 1997 10 JT 445 ; 1995 2 Scale 666 ; 1995 Supp2 SCC 294 ; 1995 3 SCR 126 ; 1995 KHC 3336
SUPREME COURT OF INDIA
BEFORE K. RAMASWAMY AND B.L. HANSARIA, JJ.
REV. FR. M.S. POULOSE
Versus
VARGHESE AND OTHERS.
Civil Appeal No. 4307 of 1995 {From the Judgment and Order dated 27-9-1990 of the Kerala High Court in S.A. No. 222 of 1985-B}
Decided on 3-4-1995
Advocates appeared:
H.N. Salve, Senior Advocate (Ranji P. Thomas, B.P. Yohaman and S. Menon, Advocates, with him) for the Appellant; P.S. Poti, Senior Advocate (Ms Malini Poduval, Advocate, with him) for the Respondents.
Act Referred :SUCCESSION ACT : S.75, S.74
(A) The Succession Act, sections 75 and 74, govern the devolution of property and testamentary dispositions. The present case illustrates how a reservation of rights during the lifetime of the transferors, coupled with a conditional conveyance, operates not as a complete gift but as a will-like instrument, keeping the title and ultimate disposition of the property within the scope of succession law.
(B) Key legal principles include: the presumption that a conveyance retaining control and revocation powers by the transferors is not a complete gift; the necessity of clear donor intent to divest title absolutely; the enforceability of a deed that is subsequently cancelled; and the application of partition principles among heirs when a gift is invalidated.
Facts of the case:
Ancestral land was transferred via a deed whereby 70 cents were given absolutely to one heir, and the rest was reserved for the transferors' lifetime with rights to income and conditional alienation. The transferors cancelled the deed during their lifetime. The lower courts held it was a valid gift, but the high court reversed, finding it a will.
Findings of Court:
The document is not a gift deed because the transferors retained significant control over the property and did not completely divest themselves of title, except for the expressly gifted portion. The cancellation of the deed is upheld, and the disposition must be treated as a will subject to succession laws.
Issues:
Whether the executed deed operates as an absolute gift or as a will; whether the transferors divested title completely; and whether the cancelled deed remains valid for partition purposes.
Ratio Decidendi:
A deed that reserves lifetime control and power of alienation or mortgage does not effect an absolute divestment of title and is to be construed as a will under the Succession Act, not as a completed gift.
Result:
The appeal is allowed, the deed is treated as a will, and the parties must partition the property equally.
(A) The Succession Act, sections 75 and 74, govern the devolution of property and testamentary dispositions. The present case illustrates how a reservation of rights during the lifetime of the transferors, coupled with a conditional conveyance, operates not as a complete gift but as a will-like instrument, keeping the title and ultimate disposition of the property within the scope of succession law.
(B) Key legal principles include: the presumption that a conveyance retaining control and revocation powers by the transferors is not a complete gift; the necessity of clear donor intent to divest title absolutely; the enforceability of a deed that is subsequently cancelled; and the application of partition principles among heirs when a gift is invalidated.
Facts of the case:
Ancestral land was transferred via a deed whereby 70 cents were given absolutely to one heir, and the rest was reserved for the transferors' lifetime with rights to income and conditional alienation. The transferors cancelled the deed during their lifetime. The lower courts held it was a valid gift, but the high court reversed, finding it a will.
Findings of Court:
The document is not a gift deed because the transferors retained significant control over the property and did not completely divest themselves of title, except for the expressly gifted portion. The cancellation of the deed is upheld, and the disposition must be treated as a will subject to succession laws.
Issues:
Whether the executed deed operates as an absolute gift or as a will; whether the transferors divested title completely; and whether the cancelled deed remains valid for partition purposes.
Ratio Decidendi:
A deed that reserves lifetime control and power of alienation or mortgage does not effect an absolute divestment of title and is to be construed as a will under the Succession Act, not as a completed gift.
Result:
The appeal is allowed, the deed is treated as a will, and the parties must partition the property equally.
B.P.Yohaman, HARISH N.SLAVE, MALINI PODVAL, P.S.POTI, Ranji P.Thomas, Sudarsh Menon
ORDER
1. Leave granted.
2. We have heard the counsel on both the sides. One Ithara and his wife Annam had 7 acres and odd land. During their lifetime, Sosa, daughter of Mathew and her husband Varghese, the respondents herein, were looking after the old people. They executed a deed dated 5-3-1966, Ex. A-2. Thereunder they have given in consideration of the affection and the faithful service rendered by them, 70 cents of land absolutely to Sosa. For the rest of the lands, it was recited thus :
"We reserve our right during our lifetime to live according to our wishes in the building described along with you and if need be we have full rights and liberty to appropriate the entire income and profits from the properties except those set apart in the name of the second named amongst you. In the event during our lifetime it becomes necessary to mortgage or alienate the schedule property the same should be effected by you jointly with us and with the consent of all of us."
3. We are not concerned with rest of the terms of the document. During the lifetime of the old people, they cancelled this document under Ex. A-3, dated 11-3-1968. The respondents challenged the same. In the trial court they succeeded, but on appeal it was reversed. The High Court confirmed the same. The High Court construed that the document is a gift deed and that therefore, the donors, having divested their title to the properties had no right to cancel the same subsequently.
4. There was a dispute with regard to the recitals among the parties. Therefore, we have got officially translated the recital as extracted herein before. It indicates that the old people, the executants, have jointly reserved the right during their lifetime not only to live in the building and enjoy the entire income from the properties, but also reserved the right to alienate or mortgage the properties. In other words, they have not divested themselves from the title to the rest of the property completely, except 70 cents of the land given to the respondent Sosa in absolute terms. The High Court, therefore, was not right in its conclusion that it is a gift deed and the donors were divested of the title on execution of Ex. A-2 with effect from 25-3-1966. That part must be read to be a will.
5. The appeal is accordingly allowed. Since the appellant is the son of Skaria, brother of Ithara, and the respondents are daughter and son-in-law of Mathew, a brother of Annam, wife of Ithara, both the parties should, according to us, make partition and enjoy the properties in equal moiety. No costs.
For Citation: 1995 Supp(2) SCC 294