2007 (12) TMI 494 - SC - Indian Laws

Summary

Issues Involved:
1. Whether an averment made in the deed of gift regarding the handing over of possession is sufficient proof of acceptance by the donee.
2. Whether the gift deeds could be rescinded due to the appellant's failure to fulfill certain conditions.

Summary:

Issue 1: Proof of Acceptance of Gift

The primary issue was whether an averment in the deed of gift regarding the handing over of possession constitutes sufficient proof of acceptance by the donee. The appellant's parents executed registered deeds of gift in his favor, which included statements about the transfer of possession. The appellant filed a suit for a declaration of ownership and to set aside the cancellation of the gift deeds. The Trial Judge decreed in favor of the appellant, stating that the requirements of Sections 122 and 123 of the Transfer of Property Act were fulfilled, and the gift could not be rescinded based on a change in the donors' feelings.

The First Appellate Court and the High Court reversed this decision, concluding that there was no overt act of possession by the appellant, as he had not paid taxes or mutated his name in the revenue records. The Supreme Court, however, noted that the essential elements of a gift under Section 122 of the Transfer of Property Act include the absence of consideration, the donor, the donee, the subject matter, the transfer, and the acceptance. The Court emphasized that the Transfer of Property Act does not prescribe a specific mode of acceptance and that the circumstances surrounding the transaction are relevant. The Court cited precedents indicating that the handing over of possession raises a presumption of acceptance and that even silence can indicate acceptance.

The Court held that the recitals in the deeds of gift, which stated that possession had been handed over and accepted, were sufficient to presume acceptance. The burden of proof was on the donors to rebut this presumption, which they failed to do. The Court concluded that the relationship between the parties and the circumstances indicated acceptance of the gift.

Issue 2: Rescission of Gift Deeds

The defendants argued that the gift was onerous and that the appellant failed to fulfill the condition of contributing Rs. 1,00,000 at the time of his sister's marriage, leading to the cancellation of the gift deeds. The Supreme Court held that gifts do not contemplate payment of any consideration or compensation and must be voluntary. The Court found that the deeds of gift were not onerous and that the donors' claim of a condition was not supported by the evidence. The Court emphasized that once a gift is complete, it cannot be rescinded for any reason, including the subsequent conduct of the donee.

The Supreme Court set aside the judgments of the High Court and the First Appellate Court, restoring the Trial Court's decision in favor of the appellant. The appeal was allowed, and no costs were awarded.