Source: Supreme Court 

Why in News? 

A bench of Justice JB Pardiwala and Justice R Mahadevan held that there must be a transfer of interest in praesenti for a gift or settlement and in case of postponement of such transfer until the death of the testator the document is to be treated as a will.  

• The Supreme Court held this in the case of NP Saseendran v. NP Ponnamma & Ors. (2025). 

What was the Background of NP Saseendran v. NP Ponnamma & Ors. (2025) Case?   

• The father originally executed a document dated 26th June 1985 (titled "Dhananischayaadharam") in favor of his daughter (Respondent No.1) regarding a specific property. 
• This document was initially interpreted differently by various courts: the trial Court and First Appellate Court viewed it as a Will, while the High Court later construed it as a gift deed or settlement. 
• After executing the 1985 document, the father subsequently cancelled it and executed a sale deed on 19th October 1993 in favor of his son (the appellant) for valid consideration. 
• The daughter (Respondent No.1) filed a lawsuit claiming the 1985 document was a gift deed and seeking a declaration of her right, title, and interest in the property. 
• During the pendency of the lawsuit, the father died on 06th January 1995, and his other legal heirs were impleaded as defendants. 
• The Trial Court dismissed the daughter's suit, and this dismissal was affirmed by the First Appellate Court, both considering the 1985 document as a Will rather than a gift. 
• The High Court then reversed the lower courts' decisions, setting aside their judgments and granting declaratory reliefs to the daughter by interpreting the 1985 document as a settlement/gift deed. 
• As a result of the High Court's judgment, the son (appellant) filed the present appeal challenging the High Court's interpretation and decision.

What were the Court’s Observations?

• The Court in this case discussed the law surrounding gift, settlement deed and will. 
• The Court observed that the gift has the following characteristics: 
  • Section 123 of Transfer of Property Act, 1882 (TPA) states how a gift is made. 
  • Section 126 of TPA states when can the gift be suspended or revoked. This section bars unilateral revocation. 
  • Section 127 enables the donor to impose any condition in the deed, which has to be accepted for the gift to take effect or in other words, the donee without accepting the obligation, cannot be said to have accepted the gift. 
  • A conspicuous reading of the provisions would disclose that for a gift of an immovable property to be valid, it has to be registered, universal cancellation of the gift is impermissible, and delivery of possession is not a condition sine qua non to validate the gift. 
• Further, the Court observed the following with regard to settlement deed: 
  • Section 2 (b) of Specific Relief Act, 1963 (SRA) defines settlement as a non-testamentary instrument whereby, there is a disposition or an agreement to dispose of any movable or immovable property to a destination or devolution of successive interest. 
  • Settlement would mean a disposition of one’s property to another directly or to vest in any such person after successive devolution of rights on other (s). 
  • Further, the circumstances and reasons that led to the execution of such a settlement deed are described as its consideration, which need not necessarily be of any monetary value. 
  • More often than not, it consists of love, care, affection, duty, moral obligation, or satisfaction, as such deed are typically executed in favour of a family member 
• With regard to will the Court observed the following: 
  • Will is a testamentary document dealt under the Indian Succession Act, 1925 (ISA). 
  • Will is defined under Section 2(h) as a legal declaration of the intention of the testator to be given effect after his death. 
  • Such a declaration is with respect to his property and must be certain. 
• The Court thus laid down that the legal position is well settled that there must be a transfer of interest in praesenti for a gift or settlement and in case of postponement of such transfer until the death of the testator the document is to be treated as a will. 
• The fact that the document is registered is not a sole ground to discard the contents and to treat the document as gift, just because law does not require will to be registered. 
• The nomenclature of the document is irrelevant and the contents of the document have to be read as a whole to understand the intent and object of the testator. 
• The Court in the facts of the present case held that the daughter’s acceptance was valid and it made the father’s cancellation and subsequent sale to son void.

What is the Difference Between Gift and Settlement Deed?

Here is a table comparing the differences between a Gift Deed and a Settlement Deed: 

What is the Difference Between Gift and Will? 

Here is a table comparing a Will and a Gift Deed: 

What is the Difference Between Gift, Will and Settlement Deed? 

Here is a table comparing Will, Gift Deed, and Settlement Deed: