Voluntariness And Animus Necessary For Execution Of Valid Gift Deed ; Donee To Discharge Burden Of Proving That He Exerted No Influence: Supreme Court

The Supreme Court observed that voluntariness and animus are necessary for the execution of a valid gift deed.

"When a person obtains any benefit from another, the court would call upon the person who wishes to maintain the right to gift to discharge the burden of proving that he exerted no influence for the purpose of obtaining the document.", the bench comprising Justices MR Shah and Sanjiv Khanna observed in a judgment delivered on Monday.

Gian Chand and Dhanbir filed a civil suit for declaration that late Hardei had gifted the land to them during her lifetime vide registered gift deed. The suit was dismissed by the Trial Court observing that though the gift deed was a registered document, the document was of decrepit origin. The First Appellate Court affirmed these findings and dismissed the appeal. Allowing the second appeal, the High Court of Himachal Pradesh held that the gift deed satisfies the legal mandates of Sections 122 and 123 of the Transfer of Property Act, 1882 and being a registered document, it enjoys presumption of truth.

In appeal, the Apex Court bench noted the reasons given by the Trial Court to conclude that the plaintiffs case lacks base for a bona fide claim for decree of declaration.

9...Appreciation of evidence is an exercise based on facts and circumstances where the preponderance of probability can take varying form and configurations. What facts and circumstances have to be established to prove the execution of a document depends on the pleas put forward. Ordinarily, no one is expected to sign or execute a document without knowing its contents, but if it is pleaded that the party executing the document did not know the contents thereof then it may, in certain circumstances, be necessary for the party seeking to prove the document to place material before the court to satisfy it that the party who executed the document had the knowledge of its contents. Considering that the very origin of the gift deed was disputed by the executant during her lifetime, the lower courts were right in weighing the evidence of the gift deed on the touchstone of its validity first, rather than its form and content. The fact in issue in the present case is the voluntariness and animus necessary for the execution of a valid gift deed, which is to be examined on the basis of evidence led by the parties who could depose for the truth of this fact in issue. Decision and determination of the fact in issue is by examination of the oral evidence of those persons who can vouchsafe for the truth of the facts in issue.

The court observed that the High Court chose to ignore and not deal with the fact in issue in the background of the case, but was completely influenced by the evidence led to support execution and registration of the document, and not whether execution was voluntary and in exercise of unfettered will to effect gratuitous transfer of land in favour of the plaintiffs.

"When a person obtains any benefit from another, the court would call upon the person who wishes to maintain the right to gift to discharge the burden of proving that he exerted no influence for the purpose of obtaining the document. Corollary to this principle finds recognition in sub-section (3) to Section 16 of the Indian Contract Act, 1872 which relates to pardanashin ladies. The courts can apply this principle to old, illiterate, ailing or infirm persons who may be unable to comprehend the nature of document or contents thereof. Equally, one who bargains in the matter of advantage with a person who places confidence in him is bound to show that a proper and reasonable use has been made of that confidence. The burden of establishing perfect fairness, adequacy and equity is cast upon the person in whom the confidence has been reposed. Therefore, in cases of fiduciary relationships when validity of the transaction is in question it is relevant to see whether the person conferring the benefit on the other had competent and independent advice.", the court added.

Allowing the appeal and setting aside the High Court judgment, the bench said that the views and findings recorded by the lower courts are well reasoned and have taken into account several factors that repel and contradict the plaintiffs' claim of a valid execution of the gift deed by Hardei favouring them.