2003 (12) TMI 53 - SC - Income Tax

Whether the judgment of the courts below are vitiated because of the misreading of the evidence of PW-2, the attesting witness to the settlement deed? Whether the gift/settlement made by the father in favour of his married daughters of a reasonable extent of immovable property out of the joint Hindu family property is valid? Held that - A father can make a gift of ancestral immovable property within reasonable limits, keeping in view, the total extent of the property held by the family in favour of his daughter at the time of her marriage or even long after her marriage. We accept the appeal, set aside the judgments and the decrees passed by the courts below. It is held that the respondent had the capacity to make a gift to a reasonable extent of ancestral immovable property in favour of his daughters. The gift was not vitiated by fraud or misrepresentation. The appellants are held to be the absolute owners of the suit property and the respondent is injuncted from interfering with the peaceful possession and enjoyment of the suit property by the appellants perpetually.

Summary

Issues Involved:
1. Misreading of evidence of PW-2, the attesting witness to the settlement deed.
2. Validity of the gift/settlement made by the father of a reasonable extent of immovable property out of the joint Hindu family property to his married daughters.

Issue-wise Detailed Analysis:

1. Misreading of Evidence of PW-2:
The appellants argued that the trial court misread the evidence of PW-2, the attesting witness to the settlement deed, Exhibit A-1. The trial court believed the respondent's claim that he was taken to the Sub-Registrar's office to witness a document, not to execute a settlement deed. The trial court misconstrued PW-2's testimony, interpreting his statement as indicating that the respondent was taken to sign as a witness. However, PW-2 had actually stated that he was invited by the respondent to be a witness, and the respondent signed the document after reading it. The trial court failed to consider this part of PW-2's testimony and misinterpreted his statements, leading to a misreading of evidence. The Supreme Court found that the trial court's findings were based on a misreading of evidence, which made them perverse and unsustainable in law. The respondent's conduct, including denying his signature on various documents, further lacked credibility.

2. Validity of the Gift/Settlement:
The trial court held that the respondent had no authority to make a gift of ancestral property to his daughters, as it was joint Hindu family property. The first appellate court acknowledged that a father could gift a reasonable portion of ancestral property to his daughters but found that the total extent of the family property had not been proved, making it impossible to determine if the gift was reasonable. The Supreme Court, however, referred to numerous judgments, including those by the Madras High Court, which established that a father could make a gift of ancestral immovable property within reasonable limits to his daughters, either at the time of marriage or thereafter. The Supreme Court cited several cases, such as Anivillah Sundararamayya v. Cherla Seethamma and Pugalia Vettorammal v. Vettor Goundan, supporting the validity of such gifts.

The Supreme Court also referred to Mulla's Hindu Law, which allows a father to make reasonable gifts of ancestral immovable property for "pious purposes," and extended this rule to include gifts to daughters. The court noted that the reasonableness of such gifts depends on the family's status, the total extent of property held, and the value of the gifted property. In this case, the family held 3.16 acres, and the gift of 12 cents (approximately 1/26th of the total holding) was deemed reasonable. The respondent failed to prove that the gift was excessive or unreasonable.

Conclusion:
The Supreme Court set aside the judgments and decrees of the lower courts, holding that the respondent had the authority to make a reasonable gift of ancestral immovable property to his daughters. The gift was not vitiated by fraud or misrepresentation. The appellants were declared the absolute owners of the suit property, and the respondent was permanently restrained from interfering with their possession and enjoyment of the property. Each party was ordered to bear their own costs.