Case Note & Summary
The appeal arose from a suit filed by the plaintiffs, sons of defendant No.1, seeking declaration of ownership and to set aside sale deeds executed by their father. The suit property was originally owned by Muniswamappa, who executed a gift deed in 1957 in favour of his grandson, defendant No.1, with a condition that the donee and his younger brothers had no right to alienate the property. Defendant No.1 later sold the property to defendant Nos.2 to 5 in 1985. The plaintiffs, as sons of defendant No.1, claimed that the sales were void due to the condition in the gift deed. The trial court dismissed the suit, holding the condition void. The High Court partly allowed the appeal, holding the condition valid but only granting the plaintiffs the right to recover the sale consideration from defendant No.1, not the property. The Supreme Court allowed the appeal, holding that the condition restraining alienation in a gift deed is valid and binding, and that Section 10 of the Transfer of Property Act does not apply to gifts. The Court declared the sale deeds null and void and directed restoration of possession to the plaintiffs, subject to reimbursement of the sale consideration to the vendees by defendant No.1.
Headnote
A) Transfer of Property Act - Gift Deed - Condition Restraining Alienation - Validity - Condition in gift deed that donee shall not alienate property is valid and binding - Section 10 of Transfer of Property Act, 1882 does not apply to gifts as it only applies to transfers for consideration - Held that condition of non-alienation in gift deed is not void (Paras 12-15). B) Transfer of Property Act - Gift for Unborn Person - Section 13 - Gift deed in favour of donee and his younger brothers who may be born hereafter is void under Section 13 as it creates interest in favour of unborn person - However, in this case, the gift was to the donee and his offspring and younger brothers, but the court did not finally decide this issue as it was not necessary (Para 9). C) Transfer of Property Act - Sale Deed - Void Transaction - Where gift deed contains valid condition restraining alienation, sale deeds executed by donee in violation of such condition are void and not binding on reversioners - Held that plaintiffs are entitled to declaration that sale deeds are null and void (Paras 12-15).
Issue of Consideration
Whether defendant No.1 had right under gift deed dated 05.06.1957 to alienate the suit properties?
Final Decision
Appeal allowed. Judgment of High Court set aside. Suit decreed declaring that sale deeds dated 07.10.1985, 08.10.1985 and 10.10.1985 are null and void and not binding on plaintiffs. Defendant Nos.2 to 5 directed to deliver possession to plaintiffs within three months. Plaintiffs entitled to recover sale consideration from defendant No.1.
Law Points
- Condition restraining alienation in a gift deed is valid
- Section 10 of Transfer of Property Act does not apply to gifts
- Gift for benefit of unborn person is void under Section 13 of Transfer of Property Act
- Donee with life interest cannot alienate property
