K. BALAKRISHNAN v. K. KAMALAM AND ORS

Citation: [2003] SUPP. 6 S.C.R. 1097

Court: Supreme Court of India

Bench: Y.K. SABHARWAL, D.M. DHARMADHIKARI

Judgment text

K. BALAKRISHNAN v. K. KAMALAM AND ORS. DECEMBER 18, 2003 [Y. K. SABHARWAL AND D. M. DHARMADHIKARI, JJ. ] Transfer of Property Act, 1872: Section 127. Gift-Acceptance of-By minor-Transfer ofproperty by-Validity- Mother gifted a portion ofher property to her minor son by registered giftdeed-Subsequently, she cancelled the gift-deed and executed a Will bequeathing the said property to her daughter-Minor son on 'attaining majority filed a suitfor declaration ofhis title to the gifted property-Trial court dismissed the suit holding that the donee was a minor and no one accepted the gift on his behalf-First appellate court allowed the appeal holding that a minor was not disqualified from receiving the gift and that acceptance could be e:>..

press or implied-But High Court held that the giftdeed was invalid because the donor had reserved to herselfthe possession and enjoyment ofthe property gifted-Correctness of-Held: There is no prohibition in law that ownership in property could not be gifted without , the possession and right of enjoyment-A minor is not incapable of receiving property-When a gift is made to a minor generally there is presumption of its acceptance-Express acceptance ofa gift by a minor not possible and implicit acceptance could be expected-Hence, gift-deed valid-High Court's order set aside. The appellant's deceased mother (donor) executed a registered gift-deed of 1/8th share of her property in favour of the appellant, who was a minor then and the first respondent-daughter. Under terms of the gift-deed ownership of the property, half-anii-half, to each of the two donees was transferred but the donor retained during her lifetime the possession and enjoyment of the property.

After the appellant had attained majority the donor executed a cancellation-deed whereby she cancelled the gift-deed and thereafter executed a Will bequeathing the same property comprising her lf8th share in favour of her daughter, the first respondent. Thereafter, the appellant-donee filed a suit for declaration of his title to the suit property based on the gift-deed and for a further declaration that the cancellation-deed and the Will were ineffective and void in law. The trial court dismissed the suit holding that the appellant was a minor at the time ofexecution of the gift-deed and ! hat no one had accepted the gift on his behalf. It, therefore, held that the gift-deed was invalid and passed no title to the donee. The first appellant court allowed the appeal holding that a minor in law was not disqualified from receiving the property under the giftdeed, that the appellant could accept the gift during his minority, and that such acceptance could be express or implied.

Hcwever, the High Court held that there was no transfer of property; that the entire right in the property gifted was reserved by the donor to herself and that there was no question of acceptance of the gift by the appellant. Hence the appeal. The following question of law arose before the Court: Whether the appellant, who was a minor on the date of execution of the gift-deed, could be held to have legally accepted the property gifted to him and the said gift-deed was irrevocable? Allowing the appeal, the Court HELD : I. The donor had very clearly transferred to the donees ownership and title in respect of her l/8th share in the properties. It was open to the donor to transfer by gift, title and ownership in the property and at the same time reserve its possession and enjoyment to herself during her lifetime. [1102-H; 1103-A] 2. 1. A minor suffers disability from entering into a contract but he is thereby not incapable of receiving property.

The Transfer of Property Act, 1872 does not prohibit transfer of property to a minor. [1104-B] 2. 2. The acquisition of property being generally beneficial, a child can take property in any manner whatsoever either under intestacy or by Will or by purchase or gift or other assurance inter-vivos, except K. BALAKRISHNAN v. K. KAMALAM 1099 where it is clearly to his prejudice to do so. A gift inter-vivas to a child cannot be revoked. There is a presumption in favour of the validity of a gift of a parent or a grandparent to a child, if it is complete. When a gift is made to a child, generally there is a presumption of its acceptance because express acceptance in his case is not possible and only an implied acceptance can be expected. 11106-E-FI Halsbwy's Laws of England Vol. 5(2) 4h Edn. , Paras 642 & 647, referred to. 2. 3. Section 127 ofthe Act clearly indicates competence ofa minor donee to accept the gift, if he is capable ofso doing.

Such acceptance of a gift can be made by himself or on his behalf by someone else. [1106-H) Firm of Ganeshdas Bhiwaraj v. Suryabhan, (1917) (XIII) Nagpur Law Reports 18; Munni Kunwar v. Madan Gopal, (1916) (XXXVIII) ILR All. 62; Firm of Ganeshdas Bhiwaraj v. Suryabhan, (1917) Vol. 39 Indian Cases; Sunder Bai v. Anandi Lal, AIR (1983) All. 23; Ponnuchami Servai v. Balasubramanian, AIR (1982) Mad. 281 and Vannathi Valappil Janaki v. Puthiya Purayil Paru, AIR (1986) Ker. 110, approved. 3. Non-mention of the fact of non-acceptance of the gift by the donee in the cancellation-deed reinforces the inference that the donormother herself, at the time of cancellation of the gift-deed, never assumed that the gift was not accepted and, therefore, it is revocable. (1109-H; 1110-A) Shankuntala Devi v. Amar Devi, (1986) HP 109 and Narayani Bhanumathi v. Lalitha Bhai, (1873) Kerala Law Times 961, approved. CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1036 of 2000.

From the Judgment and Order dated 6. 8. 99 of the Kerala High Court in S. A. No. 671 of 1992. WITH C. A. No. 4770 of 2001. Rajiv Mehta, Romy Chacko and M. P. Yinod for the Appearing parties. The Judgment of the Court was delivered by DHARMADHIKARI, J. : The only substantial question of law involved in this appeal is whether the appellant, who was minor on the date of execution of the gift-deed dated 24. 9. 1945, can be held to have legally accepted the property in suit gifted to him and the said gift-deed was irrevocable. The appellant shall hereinafter be described as 'the donee' and his deceased mother as the ' property given, he becomes so bound. " [Underlining by the Court] The last part of Section 127, underlined above, clearly indicates that a minor donee, who can be said to be in law incompetent to contract under Section 11 of the Contract Act is, however, competent to accept . a non onerous gift. Acceptance of an onerous gift, however, cannot bind the minor.

If he accepts the gift during his minority of a property burdened with obligation and on attaining majority does not repudiate but retains it, he would be bound by the obligation ?. ttached to it. Section 127 clearly recognises the competence of a minor to accept the gift. The provision of law is clear and precedents clarify the position. See the decisions of Judicial Commissioner in the case of Firm of Ganeshdas Bhiwaraj v. Suryabhan, (1917) XIII Nagpur Law Reports 18; Munni Kunwar v. Madan Gopal, (1916) (XXXVIII) ILR Allahabad 62 at 69 and Firm ofGeneshdas Bhiwaraj v. Swyabhan, (1917) Vol. 39 Indian Cases 46. The position in law, thus, under the Transfer of Property Act read with the Indian Contract Act is that "the acquisition of property being generally beneficial, a child can take property in any manner whatsoever either under intestacy or by Will or by purchase or gift or other assurance inter vivas, except where it is clearly to his prejudice to do so.

A gift intervivos to a child cannot be revoked. There is a presumption in favour of the validity ofa gift ofa parent or a grandparent to a child, if it is complete (See Halsbwy's Laws of England, Vol. 5(2) 4th Edn. Paragraphs 642 & 647]. When a gift is made to a child, generally there is presumption of its acceptance because express acceptance in his case is not possible and only an implied acceptance can be excepted. Section 122 (quoted above and underlined) covers the case of a minor donee being a person under legal disability. The section, therefore, employs the expression - 'accepted by or on behalf of donee'. As we have seen above, Section 127 (quoted above and underlined in its last part) clearly indicates competence of a minor donee to accept the gift, ifhe is capable ofso doing. Such acceptance ofa gift can be made by himself or on his behalf by someone else.

Reverting back to the facts of this case, the mother who is one of the guardians of the donee, was herself the donor and the minor was in her custody living with her in the same house. The minor's father, who is the natural guardian under Section 6 of the Hindu Minority and Guardianship Act, was also present and living with the minor in the same house jointly with other members of the family. The parties belong to an educated Kerala family. As is apparent from the :-ec:>rd, the donee was 16 years of age at the time of making of gift and as stated in the witness box, he understood and had knowledge that her mother had gifted the property to him and his younger sister. According to him after the execution ofthe gift-deed, the document written in Malayalam was brought to the house which was read by the donee and he handed it over to his father.

The document has been produced in the court from the custody of the daughter with whom the father lived at a time of filing of the suit by the minor. A question was put to the father as to whether he had accepted the gift on behalf of his minor son. His reply was that the minor son did not know about execution ofthe document and the son came to know about it only when his sister, on the basis of the deed of revocation, filed a suit against him for injunction in the year 1985. The father has, however, not stated that he himself had no knowledge of the execution of the gift-deed although he denies the version ofthe donee that the scribe brought the giftdeed and gave it to his wife and the wife gave it to him for safe custody. The father's reply was that the gift-deed remained with the wife.

Since the father lived with the daughter and had ~upported her case, he naturally denied the version of the minor of his having derived knowledge of the gift deed, its reading by him and handing over to the father. Where a gift is made in favour of a child of the donor, who is the guardian of the child, the acceptance of gift can be presumed to have been made by him or on his behalf without any overt act signifying acceptance by the minor. In the instant case, mother who is the natural guardian gifted the property to her minor son in the year 1945. The donee was an educated lad of 16 years of age, capable of understanding and living jointly with the donor. Knowledge ofthe execution ofthe gift would have been derived in normal circumstances, by the minor, being beneficiary, sooner or later after its execution. Knowledge of gift deed to both the parents as natural guardians and the donee is sufficient to indicate acceptance of gift by the minor himself or on his behalf by the parents.

, The gift deed was revoked by the mother much after its execution as late as in the year 1970. By that time, the donee had become major and he never repudiated the gift. We have examined the terms of the gift. :deed. Non-delivery of possession of the gifted property, non-exercise of any rights ofownership over it, and failure by the donee, on attaining majority, in getting his name mutated in official records are not circumstances negativing the presumption ofacceptance by the minor during his minority or on his attaining majority. The donor had reserved to herself, under the terms of gift deed, the right to manage, possess and enjoy the property during her life time. Since the possession and enjoyment of the property including management ofthe school were retained by the donor during her life time, the acceptance of the ownership of the property gifted could be by silent acceptance. Such acceptance is confirmed by its non-repudiation by his parents and by him on attaining majority.

As is the evidence on record, mother - the donor was herself the natural guardian of the minor donee. The father was also a guardian and had knowledge of the gift. He also did not repudiate the gift on behalf of the donee. The donee himself was of 16 years ofage and could understand the nature ofbeneficial interest conferred on him. He also had knowledge ofthe gift-deed and on attaining majority did not repudiate it. These are all circumstances which reasonably give rise to an inference, if not of express but implied acceptance of the gift. Where a gift is made by parent to a child, there is a presumption of acceptance of the gift by the donee. This presumption of acceptance is founded on human nature. 'A man may be. fairly presumed to assent to that to which he in all probability would assent if the opportunity ofdoiilg so were given to him'. [See Halsbury's Laws ofEngland, 4th Edition 20 paragraph 48]. In the case ofSundar Bai v.

Anandi Lal, AIR (1983) Allahabad 23, the donee was a child and in the care of the donor himself. The High Court held that in such circumstance, express acceptance could not be i:'isisted upon. In the case of Ponnuchami Servai v. Balasubramanian, AIR (1982) Madras 281, the father himself was the donor and execut~ a gift deed in favour of his minor son. The parties continued to stay tG>gether in the said property even after the gift. In these circumstances it was held that the gift in favour ofthe minor would be deemed to have been accepted as the father himself was the guardian and had himself executed the giftdeed. K. BALAKRISHNAN v. K. KAMALAM [DHARMADHIKARI, J. ] I 109 There is one more relevant fact in the present case. In the judgment of the courts below there is a mention that under the contents of the deed of cancellation dated 28. 3.

1970, there is no mention by the donor of the gift having not been accepted by the donee although it is said therein that 'none of the stipulations in the said gift have come into force. ' But she did not revoke the gift deed by specifically mentioning in the recital of the cancellation deed that the gift was not complete du~ to non-acceptance and she was therefore, making some other arrangement for succession to her property after her death. In the case of Vannathi Valappil Janaki v. Puthiya Purayil Paru, AIR (I 986) Kerala I I0, the donors were real uncles of the donees who were minor children. Subsequently the donors revoked the gift on the ground that the donees were not bestowing proper love and affection on the donors which might endanger their future safety.

The High Court of Allahabad on these facts inferred and came to the conclusion that the gift deed in favour of the minor children was definitely accepted or else there would have been mention in the revocation deed that the revocation was necessitated because the children no longer bestowed love and care on the donors. The relevant observations ofthe High Court deserve to be quoted:- "When the gift of immovable property is not onerous, only slight evidence is sufficient for establishing the fact ofacceptance by the donee. When it is shown that the donee had knowledge of the gift it is only normal to assume that the donee had accepted the gift because the acceptance would only promote his own interest. Mere silence may sometimes be indicative ofacceptance provided it is shown that the donee knew about the gift. No express acceptance is necessary for completing a gift.

Where the donors who were the real uncles of the donees stated in the deed of revocation that to allow the continued existence ofthe gift would endanger their future safety as the donees were not bestowing proper love and affection towards the donors which was expected by the donors from the donees as a recompense for the gift, that statement is clear indication that the gift had been accepted by the donees. " In the instant case, non-mention of the fact of non acceptance of the gift by the donee in the cancellation deed reinforces our inference that the donor mother herself, at the time of cancellation of the gift, never assumed that the gift was not accepted and therefore it is revocable.

As seen above, in the case of a minor donee receiving a gift from her parents, no express acceptance can be expected and is possible, and acceptance can be implied even by mere silence or such conduct of the minor donee and his other natural guardian as not to indicate any disapproval or repudiation of it. [See Shankuntala Devi v. Amar Devi, (1986) Himachal Pradesh 109 and Narayani Bhanumathi v. Lalitha Bhai, (1973) Kerala Law Times 961. In our considered opinion therefore, the trial court and the High Court were wrong in coming to the conclusion that there was no valid acceptance ofthe gift by the minor donee. Consequently, conclusion has to follow that the gift having been duly accepted in law and thus being complete, it was irrevocable under Section 126 ofthe Transfer of Property Act. Section 126 prohibits revocation of a validly executed gift except in circumstances mentioned therein. The gift was executed in 1945.

It remained in force for about 25 years during which time the donee had attained majority and had not repudiated the same. It was, therefore, not competent for the donor to have cancelled the gift and executed a Will in relation to the property. Consequently, Civil Appeal No. 1036 of 2000 filed by the donee succeeds and is hereby allowed. The impugned order of the High Court dated 6. 8. 1999 passed in Second Appeal No. 671 of 1992 and the judgment ofthe trial court dated 27. 9. 1989 are set aside. Consequently, the judgment of the first appellate court dated 21. 7. 1992 is hereby restored. The connected Civil Appeal No. 4770 of 2001 having been preferred by respondent K. Kamalam only against certain findings and ·observations contained in the impugned judgment of the High Court is dismissed. In the circumstances, parties shall bear their own costs. v. s. s. C. A. No. 1036/2000 allowed. C. A. No. 4770/2001 dismissed.