CIVIL APPEAL NO. 3034 OF 2012
The Supreme Court upheld a property transfer based on a settlement deed that required the transferee to care for the transferors and engage in charitable activities. A bench comprising Justice C.T. Ravikumar and Justice Sanjay Karol rejected the argument that consideration can only be in monetary form, affirming that taking care of the transferors and performing charitable work are valid forms of consideration for the transfer of immovable property. The Court observed, “What flows from the above-cited judgments as also provisions of law, is that ‘consideration’ need not always be in monetary terms. It can be in other forms as well.” referring to precedents on the matter.
The appeal was filed against a judgment by the Madras High Court, which partially overturned the concurrent findings of the Trial Court and First Appellate Court. The dispute involved the division of a coparcenary property among heirs and the validity of a 1963 settlement deed executed in favor of Govindammal, granting her two-thirds of the property. The deed required Govindammal to care for the transferors and continue charitable work. The respondents argued that the settlement deed was essentially a gift deed, as taking care of the transferors and doing charity work could not be considered valid consideration. In contrast, the appellants sought to uphold the findings of the lower courts, which had recognized the deed as a valid settlement. The High Court, however, treated it as a gift deed and modified the division of property.
The Supreme Court, setting aside the High Court’s judgment, stated that the 1963 deed was a settlement deed, not a gift deed. The Court emphasized that consideration need not always be monetary. The deed, which transferred the property to Govindammal in exchange for her care of the transferors and her commitment to charitable work, was a valid form of consideration under the law. The Court further stated that the High Court had erred in overturning the well-reasoned decisions of the Trial Court and First Appellate Court. Referring to the case Santosh Hazari v. Purushottam Tiwari (2001), the Court noted that for a second appeal to be maintainable, the substantial question of law must meet certain criteria, including whether it has been previously settled by law or a binding precedent, and whether it is material to the decision of the case. The Court concluded that none of these conditions were met in this case to justify the High Court’s reversal of the concurrent findings.