Unilateral Cancellation of Settled Property Rights Without Consent Legally Impermissible: Madras HC

The Madras High Court has ruled that a donor cannot unilaterally revoke a settlement deed once it has been accepted and acted upon by the donee. Justice Thirumagal Chandrasekar adjudicated the second appeal which challenged a First Appellate Court's decision that had reversed a trial court decree in favor of the plaintiff. The Bench was tasked with determining whether a father and mother could legally cancel a settlement deed executed in favor of their son years after he had attained majority and the property records had been mutated in his name.

Unilateral Revocation under Property Law

The Madras High Court examined the scope of Section 126 of the Transfer of Property Act, 1882 regarding the revocation of gifts. It observed that the defendants' attempt to cancel the 1974 settlement deed via a 1992 cancellation deed was legally unsustainable. The Bench noted that the plaintiff had already attained majority by the time of the purported cancellation, and no consent was obtained.

The Bench elaborated the law regarding revocation under Transfer of Property Act as "Once a gift is duly accepted by or on behalf of the donee and the gift is acted upon, the donor cannot unilaterally revoke the same, except in accordance with the circumstances contemplated under Section 126 of the Act."

Furthermore, the Bench dismissed the First Appellate Court's reliance on an unregistered partition deed to deny the plaintiff's title. It clarified that since the title flowed from the original settlement deed, any subsequent inconsistent stands or unregistered documents were secondary and could not override the primary title already vested in the plaintiff.

Observations on Appellate Procedure and Additional Evidence

The Madras High Court addressed the procedural lapse by the First Appellate Court in receiving additional documents without following the mandate of Order XLI Rule 28 of the Code of Civil Procedure, 1908. While the documents in this specific case (tax receipts) supported the plaintiff's claim, the Court emphasized the importance of following the prescribed mode of taking additional evidence.

Background

The dispute originated when the plaintiff's parents executed a settlement deed in 1974 in favor of their two minor sons. The plaintiff’s mother acted as the guardian and accepted the gift. Years later, in 1992, the parents executed a cancellation deed, claiming the settlement was never acted upon. Subsequently, in 2010, they executed new settlement and rectification deeds in favor of the second defendant (the plaintiff's brother). The plaintiff filed a suit for declaration and permanent injunction, asserting his title based on the 1974 deed. The Trial Court decreed the suit in the plaintiff's favor, but the First Appellate Court reversed it, prompting this Second Appeal. The Madras High Court ultimately found the First Appellate Court's reasoning flawed and restored the original decree.

Case Details:
Case No.: SA(MD).No.243 of 2013
Case Title: A.E.A. Sathiyamoorthy (died) & Ors. Vs S.P.Sivasubramaniyan
Appearances:
For the Petitioner(s): Mr.S. Meenkashi Sundaram for Mr. M. Sengu Vijay
For the Respondent(s): Mr. T. Selvan

Source: 2026 CaseBase(MAD) 21234