Can You Cancel a Registered Gift Deed?

K. Sarwanamma was the donee under a registered gift deed made by Renikuntla Rajamma. In the deed, Rajamma kept for herself the right to use the property and receive its rents during her lifetime. On 5 March 1986, she signed a revocation deed that claimed to cancel the gift. Sarwanamma then filed O.S. No. 979 of 1989, asking the court to declare the revocation deed null and void.

Rajamma fought the suit. She said the gift deed was tainted by fraud, misrepresentation and undue influence. She also said it was a sham, made because she feared that Sankaraiah would grab the property.

The Trial Court rejected these claims. It found the gift validly made and accepted, and therefore irrevocable. It also held that keeping lifetime enjoyment did not affect the deed's validity. Rajamma had taken no steps to challenge the gift for more than 12 years, and the court treated that as a sign the gift was voluntary and free from undue influence, misrepresentation or suspicion. The First Additional District Judge, Warangal agreed with the Trial Court.

The First Appellate Court spotted a gap in her story. Sankaraiah had died three years before Rajamma signed the revocation deed. If the gift had really been made to protect the property from him, there was no reason to wait three years after his death before revoking it.

The High Court of Judicature, Andhra Pradesh at Hyderabad dismissed Second Appeal No. 809 of 2003. It held that the claims of undue influence and fraud had been thoroughly disproved at trial. The case then reached the Supreme Court under the name Renikuntla Rajamma (D) by LRs, which shows that her legal representatives were pursuing the appeal.

An apparent conflict between two earlier Supreme Court decisions led to the case being referred to a larger bench.

• Naramadaben Maganlal Thakker v. Pranjivandas Maganlal Thakker & Ors. (1997) 2 SCC 255: The Court read the gift deed and the cancellation deed and held that "the gift in favour of the donee was conditional and that there was no acceptance of the same by the donee".
• K. Balakrishnan v. K. Kamalam & Ors. (2004) 1 SCC 581: A mother gifted a specified share of property she had inherited from her maternal grandfather to her minor son and four-year-old daughter. The property included a school building. The deed said the responsibility to sign for the school and the right to income would stay with her during her lifetime and then pass to the donee. The Court held she had clearly transferred ownership and title in that share, and that a donor may transfer title by gift while reserving possession and enjoyment during her lifetime.

The Bench said it was in respectful agreement with the statement of law in K. Balakrishnan.

The statutory question was simple. Does Section 123 require the donor to hand over possession, in addition to signing a registered deed? The Bench read Sections 122 and 123 together and said no. For immovable property, the transfer "must be effected" by a registered instrument. Nothing in the section makes delivery of possession a condition for a valid gift.

The history of Section 129 supported this reading. Before Act No. 20 of 1929, Section 129 said that nothing in the Chapter related to gifts of moveable property made in contemplation of death, or would be deemed to affect any rule of Muhammadan law or, "save as provided by section 123", any rule of Hindu or Buddhist law. In other words, Hindu and Buddhist rules stayed untouched by the Chapter except where they conflicted with Section 123. Act No. 20 of 1929 then deleted the words "or, save as provided by Section 123, any rule of Hindu or Buddhist Law". The Court held that the law today protects only rules of Muhammadan law from the Chapter on gifts, and that Section 123 supersedes Hindu-law rules insofar as they required delivery of possession to the donee.

The Court upheld the High Court's decree in Sarwanamma's favour. Several facts were not in dispute:

• the registered deed was executed;
• two witnesses attested it; and
• all three courts below had found that Sarwanamma accepted the gift.

The recitals in the deed proved an absolute transfer of title to her. Rajamma kept only the right to use the property during her lifetime.

• The "no possession, no gift" argument is closed. A donor can pass ownership of immovable property through a registered, accepted deed while keeping the right to use it for life.
• Naramadaben is confined to its facts. The Court said that gift was conditional and was not accepted by the donee, so it could not operate as a gift. That decision cannot be read as authority that delivery of possession is an essential requirement for a valid gift.

• Collect the paperwork first. Gather the registered gift deed, any revocation deed, rent receipts, the names of the attesting witnesses, and any evidence that the donee accepted the gift.
• Know the forum. Sarwanamma filed a civil suit (O.S. No. 979 of 1989) for a declaration that the revocation deed was null and void. The case then moved through the first appellate court, the High Court and finally the Supreme Court.
• Note the donor's mistake in this case. Rajamma's revocation deed of 5 March 1986 did not undo the accepted gift.
• Preserve the timeline. The Trial Court treated the donor's failure to challenge the gift for more than 12 years as a sign that it was voluntary. The First Appellate Court noted she waited three years after Sankaraiah's death before revoking.