Section 126 of the Transfer of Property Act, 1882 – Revocation & Suspension of Gifts

Section 126 of the Transfer of Property Act, 1882 – Revocation & Suspension of Gifts

1. Introduction

Gifts are among the most frequently employed modes of gratuitous property transfer in India. While Sections 122 and 123 of the Transfer of Property Act, 1882 (“TPA”) lay down the substantive and formal prerequisites of a valid gift, Section 126 deals with an equally crucial but often contentious question: when, and under what circumstances, may a gift be revoked or suspended? The answer implicates broader doctrinal concerns of freedom of disposition, certainty of title, and public policy against restraints on alienation. This article undertakes a critical analysis of Section 126, synthesising statutory text, historical and contemporary Indian case-law, and scholarly commentary.

2. Statutory Framework

2.1 Text of Section 126

“The donor and donee may agree that on the happening of any specified event, which does not depend on the will of the donor, a gift shall be suspended or revoked… A gift, which the parties agree shall be revocable wholly or in part at the mere will of the donor, is void… A gift may also be revoked in any of the cases (save want or failure of consideration) in which, if it were a contract, it might be rescinded… Save as aforesaid, a gift shall not be revoked.”[1]

2.2 Relationship with Other Provisions

  • Section 10 (TPA): voids conditions that absolutely restrain the transferee’s power of alienation.
  • Sections 122–123 (TPA): define and prescribe execution/acceptance of gifts; compliance thereof is a pre-condition to invoking Section 126.
  • Section 129 (TPA): formerly shielded certain Hindu/Buddhist gifts but, post-amendment, underscores the primacy of Chapter VII in all cases.[2]

3. Conceptual Foundations

Section 126 embodies two competing policies. On the one hand, it recognises the autonomy of the donor and donee to fashion conditions subsequent or precedent; on the other, it safeguards the donee against illusory transfers by invalidating clauses that leave revocation to the donor’s mere whim. Equally important is the section’s closing sentence, which makes its grounds of revocation exhaustive, thereby conferring stability upon completed gifts.[3]

4. Judicial Elaboration

4.1 Early Canon: Beharilal Ghosh v. Sindhubala Dasi (1917)

The Calcutta High Court recognised that, save in situations expressly contemplated by Section 126, a gift “cannot be revoked,” borrowing Lord Nottingham’s equity maxim that a donor must “lie down under his own folly.”[4] The Court emphasised that events warranting revocation must be external to the donor’s volition and that Section 126’s rescissory clause parallels the law of contracts—fraud, mistake, undue influence, etc.

4.2 Restraints on Alienation v. Conditional Revocation

A recurring controversy is whether a clause stating that the gift will stand cancelled if the donee transfers the property is permissible. In Jagdeo Sharma v. Nandan Mahto the Patna High Court held such a stipulation void because it imposed an absolute restraint on alienation, thereby offending Section 10; Section 126, being general, must yield.[5] The same reasoning underpinned the earlier Allahabad decision in Brij Devi v. Shiva Nandan Prasad.[6]

4.3 Conditional Gifts and Acceptance: Naramadaben Maganlal Thakker (1997)

The Supreme Court analysed a deed reserving life-interest and possession to the donor. Because possession and unequivocal acceptance were absent, the gift never perfected; its revocation was therefore valid.[7] Although decided primarily under Sections 122–123, the Court’s reasoning affirms that the condition precedent of acceptance exists independently of Section 126, and unless a gift is complete it cannot be suspended or revoked under Section 126 at all.

4.4 Retention of Usufruct Distinguished: Renikuntla Rajamma v. Sarwanamma (2014)

In Renikuntla the donor reserved possession/usufruct but expressly transferred title. The Supreme Court, resolving earlier discord, held that such reservation did not vitiate the gift because Section 123 does not mandate delivery of possession.[8] Notably, the Court contrasted Naramadaben, underscoring that retention of benefits (which may imply a condition subsequent) is not synonymous with a right of revocation forbidden by the latter half of Section 126.

4.5 Form versus Intention: Gomtibai v. Mattulal (1996)

Where a partition deed merely expressed an intention to gift but lacked a registered instrument and acceptance, the District Judge—and later the Supreme Court—found the gift inchoate.[9] This decision reinforces that Section 126 becomes relevant only post-completion of a valid gift; prior to that, issues of revocation fall within Sections 122–123.

4.6 Reserved Powers for Maintenance: Anthony Dias v. Ana F. Mascarenhas (2011)

The Bombay High Court upheld a clause permitting the donor to sell half the gifted property if necessary for her maintenance. Treating the clause as a partial revocation triggered by an event independent of the donor’s will (financial necessity), the Court invoked illustration (b) to Section 126.[10] The case illustrates judicial willingness to give effect to limited, purpose-oriented revocation clauses, provided they are not mere disguises for absolute restraints.

4.7 Gifts for Charitable Purpose and Failure of Condition

In Thakur Raghunath Ji Maharaj v. Ramesh Chandra the Supreme Court allowed revocation where land gifted for building a college was not utilised for that purpose within six months—an objective, donor-independent event.[11]

5. Doctrinal Synthesis

5.1 “Event Independent of Donor’s Will”

Courts demand that the triggering contingency be objective. Financial necessity (Anthony Dias), non-construction of a college (Thakur Raghunath), or alienation by the donee may satisfy this test only if the clause does not simultaneously impose an absolute restraint offending Section 10. A dichotomy therefore emerges:

  • Permissible: Event causing suspension/revocation that may happen (non-use for stipulated purpose).
  • Impermissible: Clause granting donor a unilateral right to reclaim “whenever he desires”, or that forbids alienation altogether.

5.2 Inter-Sectional Hierarchy

Section 10 operates at the level of public policy: freedom of alienation is paramount. Section 126, by contrast, is contractual, enabling parties to agree upon contingencies. Where the two clash, the public-policy mandate prevails (Jagdeo Sharma). Thus, Section 126 cannot be read in isolation; its generality is confined by the specific prohibition in Section 10 under the maxim generalia specialibus non derogant.

5.3 Completed v. Inchoate Gifts

Decisions such as Gomtibai and Naramadaben highlight the threshold requirement that a gift must be complete before Section 126 can bite. Absence of registration, attestation, or acceptance leaves nothing to revoke; instead, the transaction fails ab initio under Sections 122–123.

6. Policy Considerations and Comparative Insight

From a policy lens, Section 126 balances donor altruism with economic efficiency. Over-rigid irrevocability could deter benevolence where donors fear future hardship; excessive revocability would destabilise title and chill reliance interests. The Indian approach—allowing revocation on narrow, objective grounds—mirrors equitable doctrines in common-law jurisdictions while preserving statutory certainty.[12]

7. Conclusion

Section 126 of the TPA is a carefully crafted exception to the general irreversibility of gifts. Its judicial exposition reveals three controlling principles: (i) the contingency must be detached from the donor’s caprice; (ii) any clause amounting to an absolute restraint on alienation is void under Section 10; and (iii) the section presupposes a validly completed gift. Contemporary Supreme Court authority, especially Renikuntla Rajamma and Naramadaben Thakker, has clarified earlier ambiguities, thereby providing a coherent doctrinal roadmap. Practitioners should draft gift deeds with precision—identifying objective contingencies, ensuring statutory compliance, and avoiding restraints repugnant to Section 10—to harness the legitimate flexibility afforded by Section 126 while safeguarding the donee’s security of title.

Footnotes

  1. Transfer of Property Act, 1882, s. 126.
  2. Renikuntla Rajamma v. K. Sarwanamma, (2014) 9 SCC 445.
  3. Mulla, The Transfer of Property Act, 13th ed. (LexisNexis, 2022) at p. 1019.
  4. Beharilal Ghosh v. Sindhubala Dasi, 1917 SCC OnLine Cal 85.
  5. Jagdeo Sharma v. Nandan Mahto, 1981 SCC OnLine Pat 93.
  6. Mt. Brij Devi v. Shiva Nandan Prasad, AIR 1939 All 221.
  7. Naramadaben Maganlal Thakker v. Pranjivandas Maganlal Thakker, (1997) 2 SCC 255.
  8. Renikuntla, supra note 2.
  9. Gomtibai (Smt.) v. Mattulal, (1996) 11 SCC 681.
  10. Anthony Dias v. Ana F. Mascarenhas, 2011 SCC OnLine Bom 1206.
  11. Thakur Raghunath Ji Maharaj v. Ramesh Chandra, AIR 2001 SC 2340.
  12. For comparative perspective, see L. Smith, “Revocable Gifts in Equity” (2010) 126 L.Q.R. 30.