Gift deed vs will: SC rules in woman's favour after 30-year dispute

Grounds for cancelling a gift deed have to be established before a court, says legal expert

A woman was embroiled in a court battle stretching almost 30 years with her brother over their late father's property. The father gifted the property to the woman through a registered deed in 1985, but the deal was cancelled in 1993 and a sale deed was executed in favour of the son. Ultimately, the Supreme Court ruled in the sister’s favour.

 

“When the document is called a gift, the executant cannot unilaterally cancel the deed nor can the sub registrar cancel in absence of cancellation clause. Grounds for cancellation of a gift deed are to be established in the court of law; hence the unilateral cancellation of the document is void,” said Vishwanathan Iyer, partner at law firm Anand Sharma and Associates.

 

What is the case

 

In June 1985, the father executed a deed gifting the property to his daughter on the condition that she would take possession only after the demise of both parents. However, on October 19, 1993, he cancelled this deed and executed a sale deed transferring the property to his son, thereby granting him full possession.

 

In 1994, the daughter filed a case against her brother in the trial court in Cherthala, Kerala. The court dismissed her plea in 2001, ruling in favour of the brother. In 2003, a fast track court in Alappuzha upheld the trial court’s decision and again ruled in the brother’s favour.

 

Undeterred, the sister filed an appeal in 2004 against the fast track court’s order in the Kerala High Court. In 2019, the High Court ruled in her favour, stating that the brother had no rightful claim to the property.

 

In 2023, the brother challenged this decision by filing an appeal in the Supreme Court of India.

 

What legal precedent does this judgement say?

 

“The judgment has set significant legal precedents concerning the classification, interpretation and interplay of documents: Wills, gifts, or settlement deeds, noting that that the document’s nomenclature is not conclusive; instead, the substance and intention of the parties must be assessed through a harmonious reading of its terms,” said Haaris Fazili, partner, DMD Advocates, another law firm.

 

“The court has further held that when there is any ambiguity in understanding the nature of the documents from its contents, even the subsequent conduct of the executant must be considered,” said Fazili.

 

Alay Razvi, managing partner at Accord Juris, explained key legal takeaways from the judgment:

 

Once a gift deed is executed, accepted and registered, it cannot be revoked unless specific revocation conditions are stipulated within the deed or can be legally proven in court.

 

Will comes into existence after the demise of the person and gift can be executed during the lifetime , which cannot be unilaterally cancelled. Will can be revoked at any point in time.

 

The Supreme Court highlighted that physical possession is not the sole indicator of acceptance.

 

Points for execution gift deed or will:

 

The document whether it is will or gift deed have to be clearly written without any ambiguity to prevent any future dispute.

 

Either gift deed or will, both should be registered before the sub registrar. It can always be challenged but genuineness remains always.

 

Witnesses who can testify in the event of any dispute. It strengthens its enforceability.  “It is important that all deeds are drafted in clear, concise and unambiguous language to avoid any doubt over the intent of such deed. It must also be ensured that documents which require registration under law, are mandatorily registered to make them binding and effective,” said Manmeet Kaur, Partner at Karanjawala & Co.