Kerala High Court Rules Donor's Acknowledgement In Property Gift Deed Suffices As Proof Of Donee's Acceptance

Case title:

Kakkoth Radha & Others V. Bathakkathalakkal Batlak Musthaffa & Others 

Date of Order:

12th Day of June 2024

Bench:

The Honourable Mr. Justice K. Babu

Parties: 

Petitioner:

1. Kakkoth Radha D/O. Kunhambu, Kannookkara, Kavulla Valapp, P.O. Thana, Kannur - 12. 
2. Kakkoth Leela D/O. Radha, -Do- -Do- -Do
3. Kakkoth Shylaja D/O. Radha, -Do- -Do- -Do
4. Kakkoth Balan S/O. Kunhambu, Vattaparambil House, Mundayad, Elayavoor Amsom, Mundayad Desom, P.O. Elayavoor, Kannur. By Adv Sri.R.Parthasarathy

Versus

Respondents

1.    Bathakkathalakkal Batlak Musthaffa S/O. Ahammed, Mundayad Amsom, Athirakam Desom, Kannur. 

2.    Kakkoth Satheeshan S/O. Kumaran, Ekkala House, Elayavoor South, Mundayad, Kannur Dist. By Advs. Smt.M.A.Bindu Sri.V.R.Kesava Kaimal Sri.S.Venkatasubramonia Iyer Sr.

SUBJECT

Kerala High Court Rules Donor's Acknowledgement in Property Gift Deed Suffices as Proof of Donee's Acceptance. The court emphasised the important aspects of a lawful gift under Sections 122 and 123 of the Transfer of Property Act, 1886, noting that delivery of possession might suggest acceptance without verbal approval.

IMPORTANT PROVISIONS

• Section 122 of The Transfer of Property Act, 1886: The voluntary transfer of movable or immovable property from a donor to a donee in exchange for no consideration is known as a gift. Acceptance needs to happen while the donor is still alive. It void if the donee passes away before accepting the gift. 
• Section 123 of The Transfer of Property Act, 1886: The transfer of immovable property must be executed through a registered document that is attested by two witnesses and is signed by the donor or on their behalf. When it comes to moveable property, the transfer should be executed by delivery or a registered document that has been signed in the case of immovable property. Such a delivery might be carried out in the same manner as deliveries of sold products.
• Section 126 of The Transfer of Property Act, 1886: The donor and donee might agree that the gift will be suspended or withdrawn if a specific event occurs (not determined by the donor's will). However, if the parties agree that the gift is revocable at the donor's exclusive discretion, it becomes void (wholly or partially). A gift can be revoked in the same way that a contract could be terminated. Except as stated above, a gift cannot be cancelled. Transferees who receive a gift for consideration without notification maintain their rights. 
• Section 129 of The Transfer of Property Act, 1886: This Chapter is not linked to gifts of moveable property done in contemplation of death, nor may it be interpreted to impact any rules of Muhammadan law. 

OVERVIEW (Brief Facts)

Here, in this case the Plaintiff No.2 is Grandson of the Late Kunhimatha and Defendant No.1 is the daughter of Late Kunhimatha 

The plaintiffs pleaded the following: 

• Late Kunhimatha held a property (21.25 cents of land and a structure). Kunhimatha gave the dwelling home and 17 cents of land to her daughter Radha (defendant No.1).
• Radha did not take the gift. Kunhimatha revoked Radha's gift and transferred the entire property to plaintiff No.2 (Grandson) 
• Plaintiff No. 2 subsequently transferred the property to Plaintiff No. 1 (a stranger).
• The defendants sought to trespass and claim title to the land. 
• Plaintiff No.1 requests a declaration of title and accompanying remedy. 

Defendant No.1 pleaded the following: 

• Defendant No.1(daughter) pleads that she is the absolute owner of the property; her mother, Kunhimatha, gifted her 17 cents of land. She also duly accepted the gift during the lifetime of the Late Kunhimatha. 
• Kunhimatha created a right to stay in the house till the death. Plaintiff No.2 (The grandson) created some fake documents in favour of himself to claim the property, and with the same intent, he had trespassed over the plaint-scheduled property.  
• More, the defendant pleads that she got absolute rights and possession over the property when her mother (late Kunhimatha) released her right to take usufructs from the property in 1996. 
• The trial court decreed the suit that the defendant would be the absolute owner of the plaint schedule property based on its observations. The trial court observed that, Both the donor and the parties to the litigation confirmed the execution of the gift deed. The acceptance of the gift is established by several circumstances: respondent No.1 (the donee) produced the original gift deed, there were not any indications that the donee would have declined the gift, Balan, who had received part of the land from plaintiff No.2, reconveyed it to him, implying he was aware of the illegality of the plaintiff No.2's actions, and Kunhimatha herself executed a deed letting go her entire rights in favor of defendant No.1 (her daughter).
• The first appeal court overturned the trial court's judgement and judgment based on many findings, including the fact that just producing the gift deed was inadequate to establish acceptance of the gift in the donor's lifetime without proof that the donee was aware of it. The gift's non-onerous character does not indicate acceptance by defendant No. 1. Defendant No.1 fails to present proof that she was aware of the gift in 1991, when it was implemented. Her failure to provide evidence and face cross-examination compromised her allegation. Furthermore, defendant No.1 failed to transfer the property to her name or pay the applicable taxes.       

ISSUES RAISED

• Whether the first appellate court is appropriate in overturning the trial court's decision and decree based on the presumption that the gift did not take effect, notwithstanding the document indicating possession was passed over? 
• Whether delivery of possession constitutes acceptance of a gift, The parties' relationship is crucial in determining. 

ARGUMENTS BY APPELLANTS(Defendants)

• The appellants argue that the recitals in the deed declaring that the donor has transferred the title to the donee constitute a binding acknowledgement by the donor. 
• The appellants refer that The donor's reserve of lifelong enjoyment rights does not void the gift, and Delivery of the item does not constitute acceptance of the gift.  
• Silence can imply approval; no overt action is required to complete the donation transaction. 
• The appellants contend that the deed's recitals indicating the donor transferred possession to the donee are adequate to show acceptance. 

ARGUMENTS BY RESPONDENT (Plaintiff)

1. The Respondents argue that Plaintiff No.1 is a bona fide purchaser from Plaintiff No.2 (The Grandson of the late Kunhimatha)
2. The respondent argues that Defendant No.1 did not testify; hence, an unfavourable inference can be drawn against her, and Defendant No.1's inability to effect mutation and pay property taxes indicates that she did not act on the gift. 
3. The respondent contends that simply producing the gift deed does not indicate acceptance, and the execution of the gift has not been proven. 
4. The recitals are inadequate to prove acceptance since Defendant No.1 did not produce evidence to support her acceptance claim. 
5. The endorsement on Exhibit B1 and Kunhimatha's continuous payment of land tax and reserve of property rights show that Defendant No.1 did not accept the gift. 

COURT ANALYSIS 

• The court analysed the case and ruled in favor of the appellants/defendants' claim, citing major case laws and statutory provisions: 
• To be considered valid gift, a gift must be executed, registered, and accepted by the donee within the donor's lifetime as per Sections 122 and 123. Delivery of possession can serve as confirmation of acceptance, but express acceptance is not required.
• In the case of Asokan v. Lakshmikutty and Others (2007) 13 SCC 210, acceptance of a gift might be inferred from circumstances, including silence, without payment of consideration. Possession provided to the donee indicates acceptance. 
• The court cites Alavi v. Aminakutty Umma (1984 KHC 147), which established that recitals in a gift deed regarding possession delivery bind the donor and create a rebuttable presumption of acceptance.
• In the case of Parameswaran v. Lekshman (2013 (1) KHC 503), it was found that the gift deed's statements concerning possession indicate acceptance by the donee. 
• In Daulat Singh v. State of Rajasthan (2021) 3 SCC 45, it was determined that executing and registering a gift deed, combined with acceptance, results in the transfer of immovable property to the donee.
• The court ruled that the donor's reservation of life enjoyment rights does not invalidate the gift, notwithstanding the respondent's contention that Defendant No.1 did not accept it due to continuing payment of land tax and property rights. In Kuttian Padmini v. Nelliyullaparambath Mathu (2014 (1) KHC 759), the court ruled that the donor's continued payment of land tax and lack of immediate mutation are not significant given the donor-donee relationship and reserved life interest.
• The donor's release deed confirms the donee's acceptance and possession of the property, supporting the gift's validity. 

The court held that the first appeal court's acceptance findings were flawed and upheld the trial court's decision, addressing the significant legal concerns in the favor of the appellants. The appeal was granted.

CONCLUSION

In Conclusion, In the case of Kakkoth Radha & Others v. Bathakkathalakkal Batlak Musthaffa & Others, the Kerala High Court in Ernakulam decided in favour of the appellants/defendants. The court ruled that the donor's acknowledgment in the gift deed is sufficient evidence of the donee's acceptance. The court emphasised the important aspects of a lawful gift under Sections 122 and 123 of the Transfer of Property Act, 1886, noting that delivery of possession might suggest acceptance without the requirement for verbal approval. The appeal court's reversal of the trial court's ruling was determined to be flawed and the trial court's decree was reinstated, confirming that the donor's preservation of life enjoyment rights did not render the gift illegal. The appeal was granted, with significant legal issues resolved in favor of the appellants/defendants.