Gift of property need not be handed over

The Supreme Court has resolved an apparent conflict of views in its earlier judgments regarding the validity of gifts and stated that a gift of property would not be invalid if the possession is retained by the donor. "There is no provision in law that ownership in property cannot be gifted without transfer of possession of such property," the judgment said and added that possession of the gifted property is not essential for validity of a gift. In this case, Renikuntla Rajamma vs K Sawranamma, the donor retained the right to use the property during her lifetime. She also received rents. It was contended that since she retained the use of property the gift was invalid. Inasmuch as the gift deed failed to transfer title, possession and the right to deal with the property in absolute terms in favour of the donee the same was no gift in the eyes of law, it was contended. Rejecting the argument, the Supreme Court discussed Sections 122 and 123 of the Transfer of Property Act and stated that the retention of benefit did not affect the transfer of ownership in favour of the donee by the donor.

Bounced cheque penalty quashed
In a dispute between a property dealer and his driver over a bounced cheque, the Supreme Court last week set aside the order the Karnataka High Court which imposed a fine of Rs 8.5 lakh on the master. The property dealer issued a cheque of Rs 5 lakh to his driver to buy the latter's land. But the driver reneged from the sale agreement. Therefore, the master issued stop payment instructions to the bank. The driver filed a criminal complaint under Section 138 of the Negotiable Instruments Act against his master. He alleged that there was no sale agreement and he had given his master a hand loan of Rs 1.75 lakh four years earlier. Though this version of the driver was disbelieved by the trial court, the high court found substance in it and punished the master. The businessman appealed to the Supreme Court and alleged that the driver, whom he paid Rs 2,500 as monthly salary, had cooked up a story that he had given a hand loan. The Supreme Court examined the evidence and acquitted the property dealer in its judgment, Ramadas vs Krishnand.

54-year-old litigation closed

The Supreme Court last week closed a 54-year-old litigation over a piece of land in Kolkata on which a hospital had come up. The land had been changing hands along with litigation over its ownership, and with the coming into force of the Urban Land Ceiling Act, the West Bengal government also claimed ownership and handed over the land to the hospital. However, the high court ruled that the land was not surplus land and it could not be taken over. Meanwhile the hospital had already been running. Therefore, the owner could get only compensation, utilisation charge, interest and cost of litigation for the whole period. The Supreme Court, while deciding the case, Somnath Chakraborty vs Appollo Gleneagles Hospitals Ltd, directed the latter to deposit Rs 420 lakh in the court, so that it could be paid to the owner on showing the title deeds.

VRS does not bar pension
The Supreme Court has ruled that employees of public sector State Bank of Patiala who accepted a voluntary retirement scheme are entitled to pension if they had worked for 20 years. Similar cases from other public sector banks also have been quoted in the judgment to assert the right of the retiring staff. In this case, State Bank of Patiala vs Pritam Singh, the bank challenged several orders of the high court which had ordered payment of pension. The apex court dismissed all of them citing the pension regulations for public sector banks.

FCI petition on arbitration rejected

The Delhi High Court has dismissed a writ petition moved by Food Corporation of India, seeking a direction that it should not be charged enhanced fee demanded by Indian Council of Arbitration. The high court stated that "issues as to what amounts the Indian Council of Arbitration can charge can be decided in an appropriate proceedings, but definitely not by means of a writ petition." The court noted that there were 325 arbitration proceedings between the corporation and millers and most of these have been completed.

Board snubbed on daily wage issue
The Gujarat High Court has dismissed the appeal of the state Water Supply & Sewage Board and criticised it for violating its own policy for regularising workers kept on temporary basis for five to 15 years. In 1988, the government had passed a resolution to regularise workers in service. In 1994, it decided not to take temporary workers. But the board continued to take such workers and kept them for many years on daily wages. They moved the high court. The court held that the grouping of daily wagers on the basis of cut-off date of 30.11.1994 to deny benefits of Government Resolution dated 17.10.1988 were "illegal and arbitrary." On one hand, the board issued circular that no daily wagers shall be appointed from 30.11.1994 and "still the very board appointed hundreds of daily wagers in gross violation of their own policy and after passage of more than 15 years terming the action of appointing these daily wagers as illegal cannot be accepted and needs to be rejected. The board cannot punish others for their own wrongdoings," the judgment said.

Cancer charity wins tax case
The Income Tax Appellate Tribunal in Mumbai has quashed the order of the revenue authorities cancelling the registration of the Cancer Aid and Research Foundation for alleged violation of its aims and objects. The main object of the foundation was to provide monetary, medical and other assistance to poor people suffering from cancer. The authorities took action against the organisation on the ground that it had bought a BMW car costing Rs 32 lakh for a trustee, and it offered for commercial sale land allotted to it in Ratnagiri for a cancer hospital. The tribunal rejected these and other objections. The luxury car was bought for the trust though the dealer named the trustee as owner in the invoice. The land was offered for sale because the hospital could not be completed as there were not enough donors. These objections raised by the revenue authorities were rejected and the tribunal asserted that the registration should not be cancelled.