Holding

The conditional gift deed was not completed and was validly cancelled; therefore the donor’s later will is operative and the respondent’s claim fails.

Summary

Motilal Gopalji owned a property and executed a gift deed on 15 May 1965 in favour of the first respondent, reserving his right to retain possession and collect rents during his lifetime. Within a month he executed a cancellation deed on 9 June 1965, stating that the conditional gift had not been accepted and that possession remained with him, thereby cancelling the gift. He later executed a will on 17 May 1966 bequeathing the property to the appellant (his sister) and her brother, and died on 19 May 1966. The respondent sued for declaration of title and injunction; the trial court and the Gujarat High Court upheld his claim. The Supreme Court examined whether the gift deed had become complete under Sections 122 and 123 of the Transfer of Property Act, 1882, given the lack of acceptance and the donor’s retained possession, and whether the donor could validly cancel the gift. The Court held that the gift was conditional, never completed, and could be cancelled; the cancellation deed rendered the gift ineffective, so the will was operative. Consequently, the suit was dismissed and the lower courts' decrees were set aside.

Issues considered

Whether a conditional gift deed, without acceptance and with the donor retaining possession, becomes complete under Sections 122 and 123 of the Transfer of Property Act, 1882.
Whether the donor retained the power to cancel such a conditional gift deed after its execution.
Whether the subsequent will executed by the donor is operative after the cancellation of the gift deed.

Legislation cited

Transfer of Property Act, 1882s. 122, s. 123

Subjects

Transfer of Property Actgift deedconditional giftcancellation deedwillsuccessionacceptancepossessionspecial leave

Judgment

A NARAMADABEN MAGANLAL THAKKER
v.
·:PRANJIVANDAS MANGANLAL THAKKER AND ORS ...

SEPTEMBER 10, 1996 .. '

B [K. ~AMASWAMY, FAIZAN UDDIN AND G.B. PATTANAIK, JJ.)

'_Transfer of Prope1ty Act, 1882 :

· S.122, 123-Gift-Vift deed executed in favour of respondent-Can-
e celled by a subsequent deed-Thereafter Will executed in favour of appellant
and his brothe~onditional gift-To become operative 011 donor's --
death2-Before his death he executed the Will, after cancelling the gift
deed-Held, the gift deed had become ineffective and inoperative-17ie can-
cellation deed put an end to the gift deed.

D . CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3550 of
1979.
',
From the Judgment and Order dated 13.9.79 of the Gujarat High
Court in P.A. No. 421 of 1974.

E R.P. Bhatt, K.V. Sreekumar, Ms. Reema Bhandari, Ms. Alka Aggar-
wal and M.N. Shroff for the Appellant.

S.K. Dholakia and H.A. Raichura for the Respondents.

The following Order of the Court was delivered :
F
This appeal by special leave arises from the judgment of the Division
Bench of the Gujarat High Court made in FA No. 421/74 on September
13, 1979. The admitted facts are that one Motilal Gopalji was the owner
of the properties bearing Revenue Survey No. 172/8 situated in Pratap-
nagar area of the city of Baroda. The property consists of 15 rooms of the
G chaw! and an open land surrounding the same. The appellant is the sister
of the First respondent. Motilal Gopalji had executed gift deed, Ex.111
dated May 15, 1965 in favour of the respondent. Thereafter, he had
executed another deed, Ex.198 dated June 9, 1965, cancelling the said gift.
He executed a Will in favour of the appellant and another brother of the
H appellant on May 17, 1966. Motilal Gopalji died two days thereafter, i.e.,
780
N.M. THAKKER v. P.M. THAKKAR 781

May 19, 1966. Consequently, the resfiondent laid a suit in the Court of the A
Civil Judge, Senior Division in Baroda for declaration of his title to the
properties and injunction r~straining the appellant and her brother from
collecting the rents. The trial court decreed the suit. On appeal, it was
confirmed. Thus 'this appeal by special leave.

Shri R.P. Bhatt, learned senior counsel appearing for the appellant,
B
contended that a reading of the recitals of·the gift deed and the cancella-
tion deed do clearly indicate the intention of the donor and the donee,
namely, the gift was not complete. It was a conditional one. He reserved
life interest in the property and had not handed over the possession of the
property; nor had the donee accepted the gift, thereby, the gift was c
incomplete. The gift which was duly cancelled became inoperative during
the life time of the donor. The donor had cancelled it within one month of
the gift. Subsequently, he had executed a Will in favour of the appellant
and her brother. Thereby, the courts below were wrong in construing that
the gift became operative and by operation of gift deed dated May 15, 1965 D
the donor Motilal Gopalji was devoid of power to cancel the gift deed. It
is contended by Shri Dholakia, learned s~nior counsel for rhe respondent,
that the view taken by the High Co\Irt is correct in law. It is stated that
Motilal Gopalji had delivered symboiic possession to the respondent. What
he preserved was cinly right to collect rent for his maintenance and there-
after he had no power to cancel it. The recitals in the cancellation deed E
are not material. Only the recitals in the gift deed have to be considered.
On their own face value they do indicate that Motilal Gopalji had divested
·-> himself totally of the right, title and interest in the property, the subject
matter of the gift over. Consequently, he had no power to cancel the gift
and the Will executed by Motilal Gopalji was inoperative. We find no force F
in the contention for the respondent.

It is now well settled legal position that a document has to be read
harmoniously as a whole giving effect to all the clauses contained in the
document which manifest the intep.tion of the persons who execute the
document. The material part of the gift deed reads as under: G

"The said immovable property as described aBove with the ground
floor and with the ways to pass and with the water disposal and
with all other concerned rights, titles is gifted to you and the
possession whereof is handed over to you under the following H
782 SUPREME COURT REPORTS (1996) SUPP. 5 S.C.R.

A conditions to be observed by you and your heirs and legal repre-
sentatives as long as the Sun and the Moon shine. Therefore, now
I or my heirs or legal representatives have no right on the said
property. You and your heirs and legal representatives have be- '{. .
come the exclusive owners of the same. You and your heirs and "'
legal representatives are entitled to enjoy, to transfer or to use the
B said property as you like under the conditions mentioned in this
deed. Except myself, there is nobody's right, title, interest or share
on the said property : I have not mortgaged the same by any
document. Yet however anybody comes forward to claim the fight,
I shall remove the same.
c
The said property is gifted to you on such conditions that and you
are made owners by the gift deed of the said property on such
conditions that there are 15 rooms on the said property at present.
I am rightful to receive the rents and the mesne profit whatsoever
accrued from the said rooms throughout my life. I am only entitled
D to receive the mesne profit of the said property till I live. Therefore,
I, · the executant, shall be entitled to let out the said buildings .....
(rooms), to receive the rent amount to make all the other arran-
gement throughout my life. Similarly the said property shall be in
my possession till I live. Therefore, I have gifted this property to
E you by reserving permanently my rights to collect the mesne profit
of the existing rooms throughout my life. And by this gift deed the
Limited ownership right will be conferred to you till I live. After
my death you are entitled to transfer the said property. I shall not
give in any way my right to anybody to collect the mesne profit.
You may get transferred the said property in your name in support
F of this deed. This gift deed is executed to you under the aforesaid
conditions."

The material part of the cancellation deed reads as under :

G "I have on 15.5.65, executed a conditional gift deed of Rs. 9,000
in words Rupees nine thousand in favour of you. The said deed
has been presented in the office of the Sub Registrar, Baroda at
-
Serial no. 2153 of the book no. 1 and it is registered on 15.5.65.
The description of the property mentioned in the said deed is as
H under:"
N.M. THAKKER v. l'.M. THAKKAR 783

"I executed to you a conditional gift deed of the said property from A
sky to earth. You had promised me to fulfill the oral conditions
between us. But immediately after making the gift accordingly, you
denied to fulfill the said conditions. The possession of the gifted
property is not handed over to you. So in fact. you have not
accepted the conditional gift of the property and I am also not B
willing to act according toJ:he conditional gift. It is also mentioned
in the said conditional gift deed that the possession shall be kept
with me. And so accordingly my possession is continued. My
possession is from the beginning and it is permanent. You are not
ready to act according to our conditions. Therefore, I have .to
execute immediately this deed of cancelling the conditional gift C
deed between us. Therefore, I hereby cancel the conditional gift
deed dated 15.5.65 of Rs. 9,000 in words rupees nine thousand
present~d at the serial no. 2153 on 15.5.65 in the office of the
Sub-Registrar Baroda for registration. Therefore, the said condi-
tional gift deed dated 15.5.65 is hereby cancelled and meaningless. D

- The property under the conditional gift has not been and is not to
be transferred in your name. It will be at present and permanently
remain in my name."

Section 122 of the transfer of Property Act (for short, the "TP Act")
defines 'gift' to mean the transfer of certain existing movable or immovable E
property made voluntarily and without consideration, by one person, called
the donor, to another, called the donee, and accepted by or on behalf of
the donee.

Acceptance by or on behalf of the donee must be made during the F
· life time of the donor and while he is still capable of giving.

It would thus be clear that the execution of a registered gift deed,
acceptance of the gift and delivery of the property, together make the gift
complete. Thereafter, the donor is divested of his title and the donee
beCQmes the absolute owner of the property. The question is : whether the G
gift in question had become complete under Section 123 of the TP Act? It
is seen from the recitals of the gift deed that that Motilal Gopalji gifted
the property to the respondent. In other words, it was a conditional gift.
There is no recital of acceptance nor is there any evidence in proof of
acceptance. Similarly, he had specifically stated that the property would H
784 SUPREME COURT REPORTS (1996) SUPP. 5 S.C.R.

A remain in his possession till he was alive. Thereafter, ~he gifted property
would become his property and he was entitled to collect mesne profits in
respect of the existing rooms throughout his life. The gift deed conferred
only limited right upon the respondent-donee. The gift was to become
operative after the death of the donor and he was to be entitled to have ,-<
the right to transfer the property absolutely by way of gift or he would be
B
entitled to collect the mesne profits. It would thus be seen that the donor
had executed a conditional gift deed and retained the possession and
enjoyment of the property during his life time. The recitals in the cancel-
lation deed is consistent with the recitals in the gift deed. He had expressly
stated that the respondent had cheated him and he had not fulfilled the
c conditions subject to which there was an oral understanding between them.
Consequently, he mentioned that the conditional gift given to him was
cancelled. He also mentioned that the possession and enjoyment remained
with him during his life time. He stated, "I have to execute immediately this
deed of cancelling the conditional gift deed between us. Therefore I hereby
D cancel the conditional gift deed dated 15.5.65 of Rs. 9000 in words rupees
nine thousand presented at the Serial no. 2153 on 15.5.65 in the office of
the Sub-Registrar Baroda for registration. Therefore, the said conditional
gift deed dated 15.5.65 is hereby cancelled and meaningless. The property
under the conditional gift has not been and is not to be transferred in your
name." Thus he expressly made it clear that he did not hand over the
E possession to the respondent nor did the gift become complete during the
life time of the donor. Thus the gift had become ineffective and inoperative.
It was duly cancelled. The question then is : whether the appellant would
get the right to the property? It is not in dispute that after the cancellation
deed dated June 9, 1965 came to be executed, duly putting an end to the
conditional gift deed dated May 15, 1965, he executed his last Will on May
F
17, 1965 and died two days thereafter.

The appeal is accordingly allowed. The judgments and decrees of the
trial Court and the appellate court stand set aside. Consequently, the suit
stands dismissed. No costs.
G
G.N. Appeal allowed.

H