THAJUDEEN VERSUS TAMIL NADU KHADI AND VILLAGE INDUSTRIES BOARD, 2024 (SC) 839
Facts: In this case, the appellant-defendant executed a gift deed in 1983, transferring the suit property to the plaintiff-respondent for the purpose of manufacturing Khadi Lungi and Khadi Yarn, with a condition prohibiting the plaintiff from using the property for personal gain. The deed specified that neither the donor nor their heirs retained any rights to the property after the transfer, and the gift was made with the donor's full consent. The deed was absolute, with no conditions for revocation, and only stipulated the intended use of the property. However, in 1987, the appellant-defendant revoked the gift deed, which was challenged by the plaintiff-respondent by filing a suit for recovery of possession. The plaintiff argued that once the purpose set out in the gift deed (setting up a manufacturing unit for Khadi Lungi and Khadi Yarn) was fulfilled, and in the absence of any revocation conditions, the deed could not be revoked.
Issue:Whether a gift deed can be revoked ordinarily, particularly when no right of revocation is
reserved in the deed?
Observation: The JUDGMENT explained the conditions for revoking a gift deed under Section 126 of the Transfer of Property Act. Accepting the appellant's contention, the Court observed that a gift deed cannot be revoked if no right of revocation is reserved in the deed. The Court outlined three conditions under which a gift deed can be revoked and analyzed those conditions in light of the present case:
1. Agreement for Revocation on Specified Event: A gift deed may be revoked if the donor and donee agree to its revocation upon the happening of a specified event. In this case, the gift deed did not indicate that the donor and donee had agreed to the revocation of the gift deed upon any specified event. Therefore, this condition permitting revocation did not apply.
2. Revocation at the Will of the Donor: A gift deed would be void, wholly or partly, if the parties agreed that it could be revoked at the mere will of the donor. In the present case, there was no agreement between the parties for the revocation of the gift deed, either wholly or partly, or at the mere will of the donor. Therefore, this condition did not apply.
3. Gift in the Nature of a Contract: A gift deed may be revoked if it is in the nature of a contract that could be rescinded. However, the gift deed in question was not in the form of a contract, and therefore, this condition did not apply.
Accordingly, the appeal was dismissed.
