Sister to get late father's property after 30-yr-fight

After about 30 years of fighting, a sister won a case in the Supreme Court of India against her brother in respect to possession of their father’s property who died in 1995. The primary reason why the two siblings went to court to fight was because their father executed a registered deed in 1985 which essentially said that the said property would be gifted to the daughter once he and her mother both died. In 1993, however, their father cancelled this registered deed executed in the daughter’s name and created a sale deed making the brother the sole owner of the property. On January 6, 1995, their father died and this is when the property dispute between the sister and brother intensified.

The daughter did not accept this unilateral cancellation of the 1985 executed deed and filed a case in a lower court, from where subsequently it reached the high court and then it went to the Supreme Court.

The brother contested that their father executed a “will” with his sister in 1985 and hence it can be cancelled. The sister however, contended that her father executed a “gift deed” and hence it cannot be unilaterally cancelled and so she is the entitled owner of the property left behind by their father. However, the Supreme Court said the registered deed executed by their father is a “gift by settlement” instrument. Thus, by this interpretation the property of the father belongs to the sister since once a gift deed has been acted upon, the same cannot be revoked unilaterally or cancelled without proving it in a court of law.

Read below to know how the father’s property was held to be belonging to the sister and what is the legal interpretation used by the Supreme Court of India including Section 122 of Transfer of Property Act, 1882, for such a judgement.

How did this fight start?
According to the order of the Supreme Court dated March 24, 2025, here are the details:

• On June 26, 1985, a father executed a deed where he gifted the family property to his daughter on the condition that possession will be after his and her mother’s demise.
• On October 19, 1993, the father executed a cancellation deed for this deed executed with the daughter in 1985 and executed a sale deed with the brother, thereby giving him full possession of the property.
• In 1994 a case was filed by the sister against her brother in Trial Court, Cherthala, Kerala.
• In 2001, the trial court at Cherthala dismissed the sister’s plea and ruled in the brother’s favour.
• In 2003 the Alappuzha fast track court affirmed the judgement of Cherthala trial court and ruled in the brother’s favour.
• In 2004 the sister filed an appeal against the order of the fast-track court in Kerala High Court.
• In 2019, Kerala High Court ruled in favour of the sister and said her brother cannot claim the property.
• In 2023, the brother filed an appeal against this High Court order in the Supreme Court of India.

Supreme Court tells which question of law about gift deed it will answer and why
According to the judgement of the Supreme Court, the following question of law was raised in the case being referred to here:

The Supreme Court said: “…The main test to find out whether the document constitutes a Will or a gift is to see whether the disposition of interest in the property is in praesenti (in the present time) in favour of the settlee or whether the disposition is to take effect on the death of the executant…The question to be decided herein is twin fold, whether the document of the year 1985 is a gift or Settlement or Will? and whether the requirements under law or conditions in the deed have been satisfied to vest a legal right?”

The reason for this question of law was also explained by the Supreme Court. It said if the disposition of the said property is to take effect on the death of the executant i.e. the father, it would be a Will. But, if the executant divests his interest in the property and vests his interest on the settlee, the document will be a settlement.

Precedent referred by the Supreme Court: Ramaswami Naidu and another v. Gopalakrishna Naidu and others. Precedent confirmed in case: P.K.Mohan Ram v. B.N. Ananthachary and Others.

Supreme Court explains the interplay between Gift and Settlement: There is an element of gift in every settlement

The Supreme Court said in its judgement order:

• The primary difference between the Gift and the Settlement is the existence of consideration in the settlement.
• Consideration is nothing but the quid pro quo, that each party to a contract is to perform or render a part of their obligation under the contract. In view of the fact that a gift is a voluntary disposition, it is essentially not an agreement and hence, the element of consideration is taken away from it.
• Settlement on the other hand is always coupled with consideration as it is mostly executed in favour of a family member.
• The gift or settlement of an immovable property has to be registered as per Section 17 of the Registration Act. The conditions regarding acceptance, reservation of life interest and restriction on revocation are applicable to both “gift and settlement”.
• The vesting of the right also takes place in both the cases. Therefore, there is an element of gift in every settlement.

The Supreme Court explains the interplay between Gift, Settlement and Will
The Supreme Court said:

• The element of voluntary disposition is common to all the three deeds. The element of gift is traceable to both “settlement” and “will”.
• As settled in law, the nomenclature of an instrument is immaterial and the nature of the document is to be derived from its contents. While so, a voluntary disposition can transfer the interest in the present time and in future, in the same document.
• In such a case, the document would have the elements of both the settlement and will. Such a document, then has to be registered and by operation of the doctrine of severability, becomes a composite document and has to be treated as both a settlement and will and the respective rights will flow with regard to each disposition from the same document.
• It is pertinent to mention here that the reservation of life interest or any condition in the instrument, even if it postpones the physical delivery of possession to the donee/settlee, cannot be treated as a will, as the property had already been vested with the donee/settlee.

Supreme Court says if transfer of interest takes place in present time then its gift or settlement otherwise its a will
The Supreme Court said:

• There must be a transfer of interest in praesenti (in the present time) for a gift or a settlement and in case of postponement of such transfer until the death of the testator, the document is to be treated as a will.
• The fact that a document is registered, cannot be the sole ground to discard the contents and to treat the document as a gift, just because the law does not require a will to be registered.
• What is not to be forgotten is that in case of a gift, it is a gratuitous grant by the owner to another person; in case of a settlement, the consideration is the mutual love, care, affection and satisfaction, independent and resulting out of the preceding factors; in case of a will, it is declaration of the intention of the testator in disposition of his property in a particular manner.

“Therefore, even when there is any ambiguity in understanding the nature of the documents from its contents, we are of the view that the subsequent conduct of the executant must also be considered to take a decision,” said the Supreme Court.

Supreme Court final judgement: Late father’s property belongs to sister and not brother
The Supreme Court said that the trial Court as well as the First Appellate Court had erroneously come to the conclusion that the document was a Will, without appreciating the law. “However, the Kerala High Court rightly set aside the concurrent judgments of the Courts below by treating the document as settlement in the judgment impugned herein. Accordingly, this appeal is dismissed, confirming the judgment passed by the High Court.”

“This judgment offers greater legal certainty in property transfer disputes, particularly those involving familial settlements. The Supreme Court has clarified that a settlement deed executed out of love and affection, with the donor reserving a life interest while granting the donee ownership, is legally recognized as a gift. Once a gift is accepted, it becomes irrevocable, and any unilateral cancellation by the donor is invalid (in the absence of any clause or reservation to cancel),” says Haaris Fazili, Partner, DMD Advocates.

The Supreme Court interpreted the legal provisions and explained the reason for the above judgement:

Once a gift deed has been acted upon, the same cannot be unilaterally cancelled
It is settled law that delivery of possession is not an essential condition to validate a gift or settlement. Therefore, for the document to be valid, it is sufficient if it is proved that the same was acted upon during the lifetime of the executant.

In the present case, it is not in dispute that the plaintiff has registered the instrument. Such registration by the plaintiff is possible only if the document was handed over by Defendant No.1 (the father). The plaintiff (daughter), when the suit was filed, was in possession of the original title deed. The stand of the defendants that the plaintiff took away the document later is unbelievable.

Even assuming that the original deed was returned after registration, the fact that it was already acted upon, cannot be altered. Once a gift has been acted upon, the same cannot be unilaterally cancelled.

Section 122 of Transfer of Property Act, 1882 says receipt and registration of gift deed would amount to acceptance of gift
Delivery of possession is only one of the methods to prove acceptance and not the sole method. The receipt of the original document by the plaintiff and registration of the same, would amount to acceptance of the gift and the transaction satisfies the requirement of Section 122 of the Transfer of Property Act, 1882.

The creation of life interest with rights to enjoy the income from the property is a plausible and justifiable reason for the plaintiff (daughter) not to reside in the premises. Once the document is declared as “gift”, Defendant No.1 (father) had no right to cancel the same unilaterally and the Sub Registrar had no right to register the cancellation deed.

Once the document is categorized as a gift, in the absence of any clause or reservation to cancel, the executant has no right to cancel the same. The reasons for cancellation or revocation of a gift have to be proved in a court of law. Therefore, according to us, the unilateral cancellation of the document is void and as a natural corollary, the sale deed dated 19.10.1993 executed by Defendant No.1 / father also, is invalid.

The facts on record also reveal that the other family members, namely, Defendant Nos.3 and 4 supported the case of Respondent No.1/plaintiff cannot be ignored. Furthermore, the recitals in the document apparently demonstrate and satisfy the requirement to classify the document as a “settlement”

What are some key legal takeaways from this judgement?
ET Wealth Online has asked various lawyers about what might be some key legal takeaways from this judgement. Here's what they said:

Vishwanathan Iyer, Partner, Anand Sharma and Associates: The current Supreme Court judgment put to rest the status of a 1985 deed of transfer executed by a father to his daughter. The salient judicial findings are:

The Court held that the 1985 document, though in the form of a "settlement deed," was a gift deed. It was executed out of natural love and affection and conveyed ownership in the property to the daughter but kept a life interest in her name. The Court held that the language employed in the document is ancillary to its nature and intent.

A gift or settlement deed validly executed and accepted cannot be withdrawn by the donor. The father's 1993 attempt to withdraw the 1985 deed and pass the property to his son was held to be ineffective.

The reservation of a life interest in the donor does not change the nature of the gift or settlement deed. The Court also felt that no such reservations can change the initial transfer of ownership to the beneficiary.

Natural love and affection can properly give gifts or deeds of settlement between kin as good consideration for property grants without money.

The Court explained that a gift or settlement of immovable property does not necessarily need actual possession; executing, registering the deed, and acceptance by the beneficiary is enough for transfer of ownership.

This ruling confirms that the character and intent of a property transfer define the legal document and that it cannot be revoked by a donor after signing.

Dr. Richa Mehta, Partner, Gandhi Law Associates: The judgment affirms that the nomenclature of the document (whether termed as a gift deed, settlement deed, or Will) is not determinative of its legal effect. What is critical is the intention of the parties and the actual transfer of rights. As observed, a gift or settlement deed may transfer rights immediately or may involve deferred rights, but the essential requirement is the acceptance of the gift, which does not necessitate the transfer of physical possession.

Additionally, the judgment emphasizes that delivery of possession is not an indispensable requirement for the validity of a gift or settlement, as long as there is clear evidence of acceptance by the donee or beneficiary. Finally, the judgment highlights that, in the case of a settlement deed, the settlor may retain a life interest, with the legal effect that the settlor remains an ostensible owner under Section 41 of the Transfer of Property Act, 1882.

In conclusion, the court categorically asserts that a gift, once executed and acted upon, cannot be unilaterally revoked by the donor unless specific provisions allowing such revocation are included in the deed itself or are permitted by law as provided under Section-126 of the Transfer of Property Act, 1882 wherein there are specific conditions laid for revocation of a gift deed.

Sonal Alagh, Partner, Alagh & Kapoor Law Offices:The Supreme Court of India has established a significant precedent in property law regarding gift settlements. The judgment states that the delivery of possession is not essential to validate a gift or settlement as long as the donee has accepted the gift and the donor has expressed clear intentions to transfer the property. Importantly, the court has clarified that once a gift is accepted through a settlement deed, it cannot be unilaterally cancelled by the donor, even if the donor retains a life interest in the property.

• Non-requirement of Delivery for Validating Gifts: The judgment reinforces the principle that the physical delivery of possession is not mandatory for the validation of gifts if the legal formalities are otherwise completed and the intention to gift is clear.
• Irrevocability of Accepted Gifts: It emphasizes that once a gift is accepted, the donor loses the right to revoke the gift unilaterally, safeguarding the donee's interests.
• Protection of Donee's Rights: This ruling protects the rights of donees against any capricious actions by the donor post-gift acceptance, thus ensuring stability and certainty in transactions involving gifts.

In this landmark judgment, the Supreme Court has underscored the sanctity of gift settlements, affirming that physical delivery of possession is not a prerequisite for their validity. This decision not only fortifies the legal position of donees by preventing donors from arbitrarily revoking accepted gifts but also simplifies the legal framework around gift transactions, providing clarity and assurance to parties involved in such deeds. This ruling is a pivotal step towards protecting the interests of recipients and upholding the intent of donors in property transactions.