Summary
The Supreme Court upheld a decree declaring the Tamil Nadu Khadi and Village Industries Board's title to land gifted to it by registered deed, holding that the gift was accepted and acted upon, could not be revoked under Section 126 of the Transfer of Property Act as no right of revocation was reserved, and that the suit, which also sought possession, was within the 12-year limitation under Article 65.
Issues
- Whether the registered gift deed dated 05.03.1983 was accepted and acted upon by the donee.
- Whether the gift could be validly revoked by the donor through a revocation deed when no right of revocation was reserved.
- Whether non-use of the gifted property for the purpose stated in the deed entitled the donor to revoke the gift.
- Whether the donee's suit for declaration of title and recovery of possession was barred by limitation.
Provisions considered
- Section 126, Transfer of Property Act, 1882Read as laying down that a gift cannot be revoked save in three situations: an agreed revocation on a specified event not dependent on the donor's will, a gift agreed to be revocable at the donor's mere will (which is void to that extent), and cases where it could be rescinded if it were a contract. None applied to the absolute gift deed in question, so the revocation deed was void ab initio. (¶¶ 12, 13, 14, 15)
- Article 58 of the Schedule, Limitation Act, 1963A suit for declaration of title falls under Article 58 with a three-year period from when the right to sue first accrues, but where further relief is claimed the declaration is ancillary and limitation is governed by the article for that further relief. (¶¶ 21, 22, 24)
- Article 65 of the Schedule, Limitation Act, 1963Applied to the relief of recovery of possession based on title, giving twelve years from when the defendant's possession becomes adverse; the suit for possession was therefore not barred and could not have been dismissed as time-barred. (¶¶ 22, 24)
Held
- The gift was accepted and acted upon: the deed itself recorded acceptance from its date, the donee took possession on the date of the gift, applied for mutation and raised construction. The deed was therefore valid and conferred absolute title on the donee. (¶¶ 6, 7, 8, 9, 10)
- Under Section 126 of the Transfer of Property Act a validly made gift ordinarily cannot be revoked, particularly where no right of revocation is reserved. Since the deed contained no agreed revocation event, no clause permitting revocation at the donor's will, and was not a contract liable to rescission, the revocation deed dated 17.08.1987 was void ab initio and had to be ignored. (¶¶ 12, 14, 15)
- Non-utilisation of the gifted land for the stated purpose of manufacturing Khadi products, leaving it vacant, may be a disobedience of the object of the gift but does not by itself give a power to revoke, absent any stipulation in the deed to that effect. (¶ 16)
- Since the gift was irrevocable, the revocation deed was meaningless for computing limitation. Where a suit for declaration of title also claims further relief, limitation is governed by the article applicable to that further relief; a suit for possession based on title attracts the 12-year period under Article 65, and a suit for declaration of title is not barred so long as the right to the property subsists. (¶¶ 20, 22, 23, 24)
Result
Appeal dismissed; the decree of the first appellate court, affirmed by the High Court, declaring the respondent's title and directing recovery of possession upheld.