Conditional Gifts are Incomplete until Conditions are Complied With

The Hon’ble Supreme Court (“Court”), in arecent case of Sarojini Amma vs. Velayudhan Pillai Sreekumar [Civil Appeal No. 10785 of 2018, decided on 26.10.2018],examined as to  whether a document styled as gift deed but admittedly executed for consideration, part of which has been paid and the balance promised to be paid, can be treated as a formal document or an instrument of gift. In the present case, the appellant had executed a gift deed in favour of the respondent. The gift deed clearly stated that the gift would take effect after death of the appellant and her husband, and that the condition was that the respondent would look after them. Later, the appellant executed a deed of cancellation. The respondent challenged the cancellation of the gift deed before the lower court and aggrieved by the said decisions of lower court, the respondent approached the Hon’ble High Court of Kerala which has set aside the earlier concurrent findings and dismissed the suit. The appellant challenging the decision of the Hon’ble High Court of Kerala filled this appeal before the Court. The Court after referring to the relevant provisions and judicial pronouncements, noted that there is no provision in law which states that ownership in property cannot be gifted without transfer of possession of such property. However, the conditions precedent of a gift as defined in Section 122 of the Transfer of Property Act, 1882 must be satisfied. A conditional gift only becomes complete on compliance of the conditions mentioned in the gift deed. The Court further noted that the gift deed was executed for a consideration and was in any case subject to the conditions that the respondent would look after the appellant and her husband, and also, the gift would take effect only after the death of the appellant. The Court held that the conditional gift of the property in question had not been completed and the appellant was well within her rights tocancel the deed.