ARTICLE
23 April 2024

Gift Deed Executed By Senior Citizens Can Be Declared Null And Void Only If It Contains Stipulation On Maintenance By Transferee

SR
S.S. Rana & Co. Advocates

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A Gift Deed is a legal document that helps in voluntary transfer the ownership of a movable or immovable property from one person to another without any consideration.
India Family and Matrimonial
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Introduction

A Gift Deed is a legal document that helps in voluntary transfer the ownership of a movable or immovable property from one person to another without any consideration. The person who transfers the property is called the transferor, and the person who receives the property is called the transferee.1

A recent judgment of the Karnataka High Court held that the Gift Deed should not contain any demand of maintenance from the person receiving the property.2 The Hon'ble Court held that even though their conscious is in favor of the welfare of the senior citizens, their hands were tied by the law laid down by the Supreme Court3. Any stipulation would make the transfer of property an onerous burden on the transferee and would therefore be invalid under the Transfer of Property Act, 1882. For a gift deed to be valid, it must be free from any conditions or restrictions that would make it difficult or burdensome for the transferee to accept it.

The facts that led to this judgment were that the 3rd Respondent in the present case (previously the Petitioner before the learned Single Judge) had purchased a property under a registered Sale Deed in the name of the appellant with a condition that the same must be re-conveyed in his name and the entire sale consideration was paid by the 3rd Respondent. Thereafter, the Appellant in the present case, executed a registered Gift Deed, in favor of the 3rd Respondent in respect of the said property clearly mentioning in the Gift Deed that the entire sale consideration is paid by the 3rd Respondent.

In February 2016, the Appellant filed an application before the Assistant Commissioner for a declaration that the Gift Deed is null and void. The application was allowed and the registered Gift Deed, was cancelled and the property was reregistered in favor of present Appellant. The order of the Commissioner was challenged by the 3rd Respondent by filing a writ petition before the Karnataka High Court.

The learned Single Judge of this Court allowed the writ petition and quashed the order, passed by the Assistant Commissioner holding that the Gift Deed, does not contain any such stipulation that the transferee shall maintain the Senior Citizen. Hence, the present Appellant filed an Intra Court Appeal.

Arguments

The counsel of the Petitioner argued that the order passed by the Single Bench of the High Court was not maintainable as it was in contravention of the Sub-sections (1) and (2) of Section 23 of the of the Maintenance and Welfare of Parents and Senior Citizens Act, 2007. The Counsel also stated that the learned Single Judge has failed to appreciate the purpose of the Act which was framed with a view to provide maintenance and welfare of the parents and the senior citizens and to further ensure that the life, the property of the senior citizens is protected, and they are able to live with security and dignity. The Petitioner further submitted that the condition of the requirements in the Transfer Deed to be in 'writing' mandated by the learned Single Judge, made it an additional requirement which is not stipulated in Section 23(1) of the Senior Citizens Act.

The Counsel of the Respondents argued back by stating that there are two conditions that need to be fulfilled as per Sub-section (1) of Section 23 of the Senior Citizens Act, which are the transfer must have been made subject to condition that the transferee shall provide basic amenities and basic physical needs to the transferor and such transferee refuses or fails to provide such amenities and physical needs to the transferor. The counsel further submitted that since the petitioner had a Gift Deed registered to transfer the property, there is no stipulation mentioned about maintenance of the transferor by the transferee. Thus Section 122 of the Transfer of Property Act, 1882 could not override the Provisions of Section 23(1).

Decision

Dismissing the Appeal, the court concluded that the gift deed did not contain any stipulation of maintenance and in the absence of any condition stipulated in the documents, the provisions of Subsections (1) and (2) of Section 23 of the Senior Citizens Act could not be invoked. Relying on the law laid down by the Supreme Court in the case of Sudesh Chhikara vs Ramti Devi4, where the Hon'ble Supreme Court facing the similar issue held that-

"12. Sub-section (1) of Section 23 covers all kinds of transfers as is clear from the use of the expression "by way of gift or otherwise". For attracting sub-section (1) of Section 23, the following two conditions must be fulfilled:

  1. The transfer must have been made subject to the condition that the transferee shall provide the basic amenities and basic physical needs to the transferor; and
  2. the transferee refuses or fails to provide such amenities and physical needs to the transferor.

13. If both the aforesaid conditions are satisfied, by a legal fiction, the transfer shall be deemed to have been made by fraud or coercion or undue influence. Such a transfer then becomes voidable at the instance of the transferor and the Maintenance Tribunal gets jurisdiction to declare the transfer as void.

14. When a senior citizen parts with his or her property by executing a gift or a release or otherwise in favour of his or her near and dear ones, a condition of looking after the senior citizen is not necessarily attached to it. On the contrary, very often, such transfers are made out of love and affection without any expectation in return. Therefore, when it is alleged that the conditions mentioned in sub-section (1) of Section 23 are attached to a transfer, existence of such conditions must be established before the Tribunal."

While concluding the case the court held that its conscious was in favor of the welfare of the Senior Citizens, but its hands were tied due to the Hon'ble Supreme Court's judgment and all the lower courts were bound to follow the law laid down by the Apex Court.5

The Karnataka High Court thus concluded that the Petitioner was not able to make any ground to interfere with the impugned order, passed by the learned Single Judge and dismissed the appeal.

Conclusion

Gift deeds executed by senior citizens should be carefully crafted to ensure that all parties involved are aware of the rights and obligations associated with each party. In cases where a gift deed contains a stipulation on maintenance that is deemed to be unfair or illegal, it can be declared void by the courts. It is important for people executing such agreements to seek legal advice from qualified professionals in order to protect their interests and ensure that any agreement they enter is legally binding.

Footnotes

1. Section 122 of The Transfer of Property Act , 1882

2. Nanjappa v. State of Karnataka & Others (WRIT APPEAL No.573/2022)

3.Sudesh Chhikara v. Ramti Devi, 2022 SCC OnLine SC 1684

4. Sudesh Chhikara v. Ramti Devi, 2022 SCC OnLine SC 1684

5. Article 141 of the Constitution of India

For further information please contact at S.S Rana & Co. email: info@ssrana.in or call at (+91- 11 4012 3000). Our website can be accessed at www.ssrana.in

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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