Gift deed can't be revoked ordinarily, if no such right reserved: Supreme Court

New Delhi: The Supreme Court has said a gift of property made validly cannot ordinarily be suspended or revoked, when no such right is reserved under the gift deed.

 A bench of Justices Pankaj Mithal Ujjal Bhuyan explained as per Section 126 of the Transfer of Property Act, 1882, a gift can be revoked if the donor and donee may agree for the suspension or revocation on the happening of any specified event which does not depend on the will of the donor. 

Secondly, the court said, a gift which is revocable wholly or in part with the agreement of the parties, at the mere will of the donor is void wholly or in part as the case may be. Thirdly, a gift may be revoked if it were in the nature of a contract which could be rescinded. 

In its judgment on October 24, the court dismissed a plea by N Thajudeen against the Madras High Court which declined to interfere with a decree of a suit for recovery of 3750 square feet situated in District Cuddalore on basis of a gift deed made in 1983 to Tamil Nadu Khadi and Village Industries Board, to be used for manufacturing Khadi Lungi and Khadi Yarn etc.

In the case, the court found the gift was absolute with no right reserved for its revocation in any contingency. In the absence of any clause in the gift deed authorising revocation, it could not have been revoked as alleged by the revocation deed in 1987, it noted. 

"The revocation deed of 1987 is void ab initio and is of no consequence which has to be ignored," the bench said.

Dealing with the contention of the appellant, the bench said, "The non-utilisation of the suit property for manufacturing Khadi Lungi and Khadi Yarns etc, the purpose set out in the gift deed, and keeping the same as vacant may be a disobedience of the object of the gift but that by itself would not attract the power to revoke the gift deed. There is no stipulation in the gift deed that if the suit property is not so utilised, the gift would stand revoked or would be revoked at the discretion of the donor." 

The court also rejected a contention that the suit was barred by limitation, saying said the principle is that the suit for a declaration for a right cannot be held to be barred so long as right to property subsist.