Source: Kerala High Court   

Why in News? 

Recently, the bench of Justice A. Badharudheen held that the formal requirements for executing a gift deed under the Transfer of Property Act,1882 (TPA) equally apply to a settlement deed. 

• The Kerala High Court   held this in the matter of Abraham, S/o Chacko and others v. Ajitha Jayakumar and others (2025). 

What was the Background of Abraham, S/o Chacko and others v. Ajitha Jayakumar and others (2025) Case? 

• The plaintiff filed a suit seeking declaration of her title over a plaint scheduled property and recovery of possession from the defendants who had allegedly trespassed upon it. 
• The plaintiff's claim was primarily based on a settlement deed (Ext. A1) executed by one late Ramachandran in her favour, which she contended gave her legal title to the property. 
• Late Ramachandran was the husband of the 3rd defendant and father of the 4th defendant, and he had executed the settlement deed on 28.07.1986 before his death on 03.01.1991. 
• The defendants 1 and 2 contended that they were bona fide purchasers who had acquired valid title to the property through sale deeds executed by defendants 3 and 4. 
• Defendants 3 and 4 claimed that after Ramachandran's death, the property devolved upon them as his legal heirs, being his widow and son respectively. 
• The defendants argued that the settlement deed relied upon by the plaintiff was a false and concocted document that was never genuinely executed by Ramachandran. 
• According to the defendants, the total property extent was 1 acre and 44 cents, out of which 27 cents were acquired by the Government for the Kallada Irrigation Project. 
• The plaintiff alleged that while she had been possessing and enjoying the property under the settlement deed, the defendants trespassed upon it in December 1994 after executing a partition deed and subsequent sale deeds. 
• The trial court, after examining the evidence including testimony from the document writer (PW3) and the plaintiff herself, declared that the plaintiff had perfected title over the property through the settlement deed. 
• Aggrieved by the trial court's decree and judgment dated 31st July 2004, defendants 1, 2, 7 and 8 filed this appeal before the Kerala High Court challenging the findings. 

What were the Court’s Observations? 

• The Court observed that even though Ext.A1 is a settlement deed, the essentials to complete a gift as mandated under Section 122 of the TPA would apply to settlement deeds as well, despite there being a slight difference between gift deeds and settlement deeds. 
• The Court noted that it is not mandatory to examine an attesting witness to prove a settlement deed when there is no specific denial of its execution, relying on the provisions of Section 68 of the Evidence Act and Section 123 of the TPA 
• The Court found that the plaintiff had successfully proved the execution and acceptance of the settlement deed, with the production of the original deed in her possession serving as vital evidence of acceptance. 
• Regarding the claim of defendants 1 and 2 as bona fide purchasers, the Court observed that they failed to exercise due diligence by not obtaining an encumbrance certificate to verify the property's liabilities before purchase. 
• The Court held that since the entire plaint schedule property had been transferred by Ramachandran through the settlement deed, nothing remained for defendants 3 and 4 to inherit, making their subsequent partition and sale deeds invalid. 
• The Court concluded that the appeal was meritless and deserved dismissal, upholding the trial court's finding that the plaintiff had perfected title over the property through the valid settlement deed. 

What is a Gift ? 

Section 122: “Gift” Defined 

A gift is a legal transfer of ownership of certain existing movable or immovable property.  

• Voluntary: The transfer must be made willingly, not under compulsion. 
• Without Consideration: No money or other form of payment is given in exchange. 
• Parties Involved: 
  • Donor: The person who gives the gift. 
  • Donee: The person who receives the gift. 
• Acceptance: The gift must be accepted by the donee (or someone on his/her behalf). 
  • Timing: Acceptance must occur during the donor’s lifetime and while the donor is capable of giving. 
  • If Not Accepted: If the donee dies before accepting, the gift is void.

Section 123: How Transfer is Effected 

The method for transferring a gift depends on the type of property: 

• Immoveable Property (e.g., land, buildings) 
  • Must be by Registered Instrument: The gift must be made through a registered document. 
  • Signed and Attested: The document must be signed by or on behalf of the donor and attested by at least two witnesses. 
• Moveable Property (e.g., jewelry, vehicles) 
  • By Registered Instrument: Can be transferred through a registered document as above, or 
  • By Delivery: The property can simply be delivered to the donee, in the same way goods are delivered when sold.