SRIDHAR & ANR. versus N. REVANNA & ORS. on 11 February 2020

1. This appeal has been filed by the plaintiffs against the judgmentdated 18.01.2012 of the High Court of Karnataka in Regular First AppealNo. 69 of 2002 by which the High court partly allowed the Regular FirstAppeal of the plaintiffs-appellants.

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2. Brief facts of the case for deciding this appeal are:

The parties shall be referred to as described in the suit. One ShriMuniswamappa, great grandfather of the plaintiffs and grandfather ofdefendant No.1, was the absolute owner of the suit schedule property.Shri Muniswamappa executed two gift deeds dated 05.06.1957 in favourof defendant No.1, N. Revanna. The gift deed was executed byMuniswamappa in favour of his grandson, N. Revanna. The gift deedalso contained a condition that donee and his younger brothers hereafterhad no right to alienate the scheduled property. Defendant No. 1, N.Revanna executed sale deeds dated 07.10.1985, 08.10.1985 and10.10.1985 in favour of defendant Nos. 2 to 5. Defendant Nos.6 and 7

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Awere the tenants of the premises. Original Suit No. 11133 of 1995 wasfiled by the plaintiffs-appellants against N. Revanna, defendant No.1,vendees as defendant Nos. 2 to 5 and defendant Nos.6 and 7 in whichfollowing reliefs have been claimed:

“PRAYERS:

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(a) to declare that the plaintiffs are the absolute owners of thesuit schedule properties or in alternative to declare that theplaintiffs are the revert loners in interests of the suit scheduleproperties; (b) to declare the alienations in favour of defendants 2 to 5 byCthe first defendant dated 7.10.1985, 8.10.1985 and 10.10.1985are null and void and set aside the same as the same is notbinding on these plaintiffs;

(c) to grant for permanent injunction restraining the defendants2 to 5 from taking possession of the suit schedule propertiesDfrom the defendants 6 and 7 and also restraining the defendants2 to 5 dismantling the suit schedule properties; (d) to direct defendants 2 to 5 deliver the vacant possession ofproperties comprised in item No.1 of the schedule propertieswhich they have taken possession from Sri SubramanayamEand Sri Selvaraj; and (e) award costs and such other reliefs as this Hon’ble Court maydeems fit in the circumstances of the case.”

3. The case of the plaintiffs was that N. Revanna received thesuit properties by registered gift deed dated 05.06.1957 from hisFgrandfather, Muniswamappa and as per the gift deed defendant No.1and his younger brothers who may be born had no right to alienate thesuit schedule property. It was pleaded that sale deed executed by defendantNo.1 is void and the plaintiffs being sons of defendant No.1 and greatgrandsons of Muniswamappa are the absolute owners of the property.GBoth the plaintiffs were minors and the suit was filed by their next friendand guardian paternal grandmother, Smt. Jayamma.

4. Defendant No.1 filed written statement supporting the case ofthe plaintiffs stating that as he was in dire need of money and proceededunder the bona fide belief that there was no legal impediment to sell theHproperty. Defendant No.7 also filed written statement. Defendant Nos. 2 to 5 filed a common written statement questioning the bona fideof the plaintiffs and their guardian. They pleaded that the plaintiffs havebeen set up by the vendor. Defendant No.1 acting in addendum in seekingto avoid the sale on a specious plea that there was a condition that theproperty could not have been alienated by defendant No.1. Trial Courtframed the following five issues:

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“1] Whether the plaintiff proves that plaintiffs have got absoluteright over the suit schedule properties?

2]Whether the plaintiff proves that defendant No.1 has no rightto alienate suit schedule property in favour of Defendant No.2 and Defendant No. 5 and that said alienation is not bindingCon the plaintiffs?

3]Whether the defendants prove that condition of restraint onalienation is void in law?

4]Whether the plaintiffs are entitled to the relief sought?

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5]What order or decree?”

5. Issue Nos. 1 and 2 were answered in negative and Issue No. 3was answered in affirmative. The trial court held that the plaintiffs havefailed to prove that they have got absolute right over the suit scheduleproperty and they have also failed to prove that defendant No.1 had noright to alienate the property. The suit of the plaintiffs was dismissed bythe trial court vide its judgment and decree dated 21.11.2001.

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6. A Regular First Appeal was filed by the plaintiffs in the HighCourt. The High Court held that the trial court was clearly in error inholding that the condition imposed on defendant No.1 was void. TheHigh Court took the view that the benefits that defendant No.1 receivedby virtue of sale deed had to be given back to the plaintiffs. The HighCourt partly decreed the suit by passing the following order:

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“The plaintiffs’ condition that the property was worth multipletimes the sale price for which it was sold, is an unfortunatecircumstance. The interest of justice would demand that theplaintiffs be entitled to nothing more that what Revanna hadreceived under the sale Deeds. It is this alone which the plaintiffsshall be entitled to and it is accordingly decreed that the plaintiffsare entitled to the sale consideration received by Revanna underthe Sale Deeds. The plaintiffs are entitled to recover the same G

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Afrom defendant No. 1. Further, since defendant Nos. 2 to 5 wereequally responsible for creation of this circumstance, it would meetthe ends of justice if nominal costs are imposed on them, which inthe opinion of this court would be in the order of Rs. 25,000/-payable to the plaintiffs, jointly; though in law, the condition wasnot to be held void, in which event, though the plaintiffs could thenBclaim ownership to the property, having regard to the sequenceof events and the present circumstance, the claim of the plaintiffsto recover the property necessarily has to be denied. The order oftemporary injunction granted earlier stands vacated.”

7. The plaintiffs aggrieved by the judgment of the High CourtChave come up in this appeal.

8. Shri Jayant Kumar Sud, learned senior counsel appearing forthe appellants submits that the High Court even after deciding all theissues in favour of the plaintiffs erred in law in not declaring the saledeeds null and void and returning the property to the plaintiffs. It isDsubmitted that when the High Court held that the condition in the giftdeed executed by the Muniswamappa in favour of defendant No. 1 thatdonee shall not be entitled to alienate the schedule property was held tobe a valid condition the sale deeds executed by defendant No. 1automatically became void and were liable to be declared so. He submitsEthat defendant No. 1 in the gift deed executed by his grandfather hadonly a life stake who could not have alienated any of the properties.

9. Learned counsel for the appellant further submits that the giftdeed executed in favour of defendant No.1 on 05.06.1957 was not avalid gift deed. It being gift deed in favour of defendant No.1 and for theFbenefit of unborn person was void under Section 13 of the Transfer ofProperty Act.

10. Shri S.S. Javali, learned senior counsel, appearing for therespondents refuting the submissions of the learned counsel for theappellants contends that the gift deed dated 05.06.1957 was a valid giftGdeed and was not hit under Section 13 of the Transfer of Property Act.He further submits that the condition of gift deed dated 05.06.1957 thatdonee shall not be eligible to alienate the property, was a void condition.He has placed reliance on Section 10 of the Transfer of Property Act,1882. Learned counsel for the respondents submits that the High Courtcommitted an error in holding that condition of non-alienation was notHvoid.

11. We have considered the submissions of the learned counsel ofthe parties and perused the records.

12. The short question to be considered and answered in this appealis “as to whether defendant No.1 had right under gift deed dated05.06.1957 to alienate the suit properties”? The trial court has held thatthe condition in the gift deed that the donee shall not be eligible to alienatethe property was void and defendant No.1 has validly executed the saledeeds in favour of defendant Nos. 2 to 5. The trial court has resultantlydismissed the suit. The High Court had taken the contrary view that theabove condition of the gift deed was not void. Further, the High Courtdid not annul the sale deed rather granted limited relief to the plaintiffsthat the plaintiffs are entitled to receive back the consideration whichwas received by defendant No.1 by execution of three sale deeds dated07.10.1985, 08.10.1985 and 10.10.1985. The suit of the plaintiffs for restof the prayers was dismissed.

13. Before we proceed to consider the respective submissions, itis necessary to look into the relevant portions of the gift deed dated05.06.1957. The gift deed was executed by Muniswamappa claiming tobe sole and absolute owner of the premises bearing Municipal No. 324and 325. Defendant No.1, N. Revanna was a minor aged five yearsrepresented by his father, a natural guardian, M. Narayanappa. Therelevant portion of the gift deed is as follows:

“NOW THIS INDENTURE WITNESSETH that inpursuance of the aforesaid agreement and in consideration ofextreme love and affection which the donor cherishes for thedonee his grandson and the donee’s, offspring’s and the donee’syoung brothers and their male offspring’s who may be bornhereafter he the donor doth hereby grant, convey, makeover andtransfer by way of gift to the done above name the immovableproperty described in the schedule hereunder given which bearsMunicipal No. 324, Old Poor House Road Civil Station Bangalore,to be taken by his as a gift subject to the conditions hereinaftermentioned.

The donor covenants with the donee, that on the date ofthese presents, the property that is now endowed as a gift is freefrom all encumbrances, liens, charges, attachments from Courtand lispardens and that he has absolute and unimpeachable right A

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Ato grant it as a gift and that no one else has any right to questionthe same.

The donor has this day handed over possession of theproperty hereby gifted to the donee, in accordance with Law whichthe donee shall enjoy on and from this date, over which she canBexercise all rights of ownership subject to the conditions detailedhereinafter namely:-

1. The Donee or his younger brothers who may be bornhereafter have no right to alienate the schedule propertyin any manner whatsoever by way of sale, gift mortgageor otherwise.

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2. The donee or his younger brothers who may be bornhereafter shall enjoy the property during his or their lifetime as the case may be and on his or their demise itshall devolve on his or their male children then survivingDwho shall be at liberty to deal with the propertymentioned in the schedule hereunder in any mentionedher their to do with unstructed gifts.

3. In case the Donee or his younger brother or brotherswho may be born hereafter die issue-less, the saidEproperty hereby gifted shall devolve on SriSOMESWARASWAMY of Sri Someswara TempleUlsoor Civil Station Bangalore, for the benefit of thesaid Temple.”

14. The gift deed categorically states: “donor doth hereby grant,Fconvey, makeover and transfer by way of gift to the donee above namedthe immovable property described in the schedule hereunder”. The giftdeed in favour of the donor was absolute and who was to exercise rightsof ownership subject to the conditions detailed in the gift deed. One ofthe conditions which was enumerated in the gift deed was that “thedonee or his younger brothers who may be born hereafter have no rightGto alienate the schedule property in any manner whatsoever by way ofsale, gift mortgage or otherwise”.

15. The gift deed further stated that “donee or his younger brotherswho may be born hereafter shall enjoy the property during his or theirlife time as the case may be and on his or their demise it shall devolve onHhis or their male children then surviving who shall be at liberty to dealwith the property mentioned in the schedule hereunder in any manner”.

16. The question to be answered is as to whether defendant No.1who was gifted the schedule property had no right to alienate the scheduleproperty in any manner whatsoever. The reliance has been placed bythe counsel of the respondents on Section 10 of the Transfer of PropertyAct which is to following effect:

“10. Condition restraining alienation.—Where propertyis transferred subject to a condition or limitation absolutelyrestraining the transferee or any person claiming under him fromparting with or disposing of his interest in the property, the conditionor limitation is void, except in the case of a lease where thecondition is for the benefit of the lessor or those claiming underhim:

Provided that property may be transferred to or for thebenefit of a women (not being a Hindu, Muhammadan or Buddhist),so that she shall not have power during her marriage to transferor charge the same or her beneficial interest therein.”

17. Section 10 expressly provides that where property is transferredsubject to a condition or limitation absolutely restraining the transfereeor any person claiming under him from parting with or disposing of hisinterest in the property, the condition or limitation is void. According toSection 10 any condition restraining the transferee the right of alienationis void. A plain reading of Section 10 of Transfer of Property Act makesit clear that the condition in the gift deed dated 05.06.1957 that defendantNo. 1 shall not alienate the property is a void condition.

18. Learned counsel for the respondents has rightly placed relianceon the judgment of Allahabad High Court in Smt. Brij Devi vs. ShivaNanda Prasad and others, AIR 1939 Allahabad 221, wherein theHigh Court had occasion to consider Sections 10 and 126 of the Transferof Property Act. In the above case also gift deed came into considerationwhich contained a condition that “The donee or his successors will haveno right to transfer or mortgage”. The Division Bench of the High Courthad laid down:

“Now the law of conditions in regard to the transfer ofproperty is contained in Ch. 2 of the T.P. Act. No conditiontherefore, in our judgment, imposed upon a donee can be valid if itis inconsonant with the provisions of Section 10 of the Act. Thecontention, of learned Counsel for the plaintiffs that Section 126

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SUPREME COURT REPORTS

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is an absolute exception to Section 10 and that in view of theterms of the former Section the donor was entitled to impose acondition entitling him to revoke upon any event happening includingan alienation by the donee, provided that event did not depend onthe will of the donor in our judgment is unsound. It is the duty ofthe Court to give full effect to every Section of an enactment. Wesee no difficulty in reconciling the provisions of Sections 10 and126. Section 10 embodies the general principle that a transfer ofimmovable property may not impose a condition restraining thetransferee from alienating the interest conveyed to him absolutelyexcept in the case of a lease where the condition is for the benefitof the lessor. This general provision, in our judgment, applies to alltransfers including gifts. Apart from the condition restrainingalienation by a lessee, there is no other exception.”

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19. The Allahabad High Court in the subsequent judgment in Smt.Prem Kali vs. Deputy Director of Consolidation, Sitapur andDothers, 2016 (116) ALR 794, followed the earlier judgment of theHigh Court. In paragraph 15 following was laid down:

“15. A bare reading of Sections 10 and 126 of Act, 1882,shows that Section 10 lays down that in a transfer, the conditionrestraining alienation, cannot be inserted. Section 126 of Act, 1882Elays down that on happening of certain condition, not dependedon the will of the donor, the gift can be suspended or revoked.Present case is not covered under Section 126. According to therespondent, gift can be conditional. But there is no question as towhether a gift can be conditional but the real question is thatcondition, which has been specifically prohibited under Section 10Fof Act, 1882 can be imposed in the gift or not. There is no reasonto hold that the condition which is specifically prohibited underSection 10 of Act, 1882 is not applicable to gift. This questioncame for consideration before various Courts in under noted casesfrom time to time, viz Re Dugdale (1888) 38 Ch D 176; NabobGAmiruddaula Vs Nateri (1876) 6 Mad HC 356 (Mohomedan Law);Anantha Vs Nagamuthu (1882) ILR 4 Mad 200; Ali Hasan VsDhirja : (1882) ILR 4 All 518; Bhairo Vs. Parmeshri: (1885) ILR7 All 516; Muthukamara Vs. Anthony (1915) ILR 38 Mad 867, 24IC 120; Narayanan Vs Kannan (1884) 7 Mad 315, Brij Devi v.Shiv Nanda Prasad:AIR 1939 All 221; Giani Ram Vs Balmakand E

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:(1956) 58 Punj LR 114 : AIR 1956 Punj 255; Ramasamy and orsVs. Wilson Machine Works AIR 1994 Madras 222 (NOC), JagdeoSharma Vs. Nandan Mahto: AIR 1982 Pat. 32 and GorachandMukherji Vs. Smt. Malabika Dutta: AIR 2002 Cal 26. This Courthas already taken the view that condition restraining donee fromalienation of gift, cannot be imposed and such a condition is voidunder Section 10 of the Act, 1882. I respectfully agree with theaforesaid view taken in Brij Devi (supra).

20. Now, we come to the submission of the learned counsel forthe appellants that gift deed was hit by Section 13 of the Transfer ofProperty Act. Section 13 of the Transfer of Property Act provides:

“Section 13. Transfer for benefit of unborn person.—Where,on a transfer of property, an interest therein is created for thebenefit of a person not in existence at the date of the transfer,subject to a prior interest created by the same transfer, the interestcreated for the benefit of such person shall not take effect, unlessit extends to the whole of the remaining interest of the transferorin the property.”

21. A perusal of the gift deed as noted above indicates thatMuniswamappa gifted the immovable property to his grandson, N.Revanna. Gift was not in favour of any unborn person rather gift was infavour of N. Revanna who was a minor, five years old. The referenceof donee and his younger brothers or their male children was madewhile enumerating the conditions as contained in the gift deed. Thecondition was put on the donee and his younger brothers who may beborn after the execution of the gift deed. The condition put on personunborn is entirely different from execution of gift deed in favour of aperson who is not born. Thus, the gift was clearly a gift in favour ofdefendant No.1 and not in favour of unborn person, thus, Section 13 hasno application in the facts of the present case.

22. Learned counsel for the appellants has placed reliance on thejudgment of this Court in F.M. Devaru Ganapathi Bhat vs. PrabhakarGanapathi Bhat, (2004) 2 SCC 504, in support of his submission basedon Section 13 of the Transfer of Property Act. The gift deed whichcame into consideration in the aforesaid case has been reflected inparagraph 4 of the judgment which is to the following effect:

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“4. In the gift deed, the donor retained Property SurveyNo. 306 for her livelihood till demise. The contention is that ontrue construction of the gift deed on demise of Mahadevi, theappellant became the absolute owner of Property Survey No.306. The respondent has no right over it. The answer would dependupon the construction of the gift deed. The original gift deed is inKannada language. When translated in English, it reads as under:

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“THIS DEED OF GIFT OF IMMOVABLE PROPERTIESAND HOUSE in village is executed on this, the 9th day ofSeptember, 1947, by Smt Mahadevi, w/o Subraya Bhat, aged about25 years, occupation, housewife, belonging to Havyaka community,r/o Keramane, Yalugar village of Siddapur taluk, in favour of DevaruGanapathi Bhat, aged about 13 years, r/o Keramane, Yalugar villageof Siddapur taluk.

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WHEREAS, I am the owner of the below-mentionedimmovable properties and house. In order to protect the interestDof the below-mentioned properties and house, I am thinking to giftall the properties by way of a gift to a suitable person. As you aremy brother’s son and also you have gained love and affection ofmine and also as the land and house were previously your ancestralproperty, hence I have decided to gift the immovable propertyEand house therein to you. ………………………………………..In case any male children are born to your parents, you shallenjoy the described immovable property and house with thosemale children as a joint holder. Therefore, this deed of gift ofimmovable properties, house etc. has been executed ……… .”

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23. The gift deed in the above case was also in favour of DevaruGanapathi Bhat, aged about 13 years, this Court held that Section 13 hasno applicability to the facts of the above case. In paragraph 12 followinghas been laid down:

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“12. There is no ban on the transfer of interest in favour ofan unborn person. Section 20 permits an interest being createdfor the benefit of an unborn person who acquires interest upon hisbirth. No provision has been brought to our notice which stipulatesthat full interest in a property cannot be created in favour of anunborn person. Section 13 has no applicability to the facts andcircumstances of the present case. In the present case, the donor

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gifted the property in favour of the appellant, then living, and alsostipulated that if other male children are later born to her brother,they shall be joint holders with the appellant. Such a stipulation isnot hit by Section 13 of the Act. Creation of such a right ispermissible under Section 20 of the Act. The respondent, thus,became entitled to the property on his birth. In this view, there isalso no substance in the second contention.

24. The above judgment of this Court clearly supports thesubmission of the learned counsel for the respondents that Section 13has no application in the present case.

25. In view of the foregoing discussions, we are of the clear opinionthat the High Court erred in holding that defendant No.1 was not entitledto transfer the property which was received by gift deed dated05.06.1957. The plaintiffs were not entitled for declaration as sought forin the suit. There is no merit in the appeal. The appeal is accordinglydismissed.

Divya Pandey

Appeal dismissed.

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