Property Law

Sridhar v. N. Revanna

AIR 2020 SC 824; (2020) 11 SCC 221

Facts

Muniswamappa gifted immovable property to his five-year-old grandson, N. Revanna, through two registered gift deeds in 1957.
The deeds stated that Revanna and any younger brothers born later would not have the right to alienate the property.
Revanna subsequently executed registered sale deeds in favour of several purchasers in 1985.
His sons challenged those sales.
They argued that:
Revanna was prohibited from alienating the property;
the gift also benefited his future younger brothers and their descendants; and
the purchasers acquired no valid title.

Whether the clause completely prohibiting alienation was valid.
Whether the gift was for the benefit of unborn persons and therefore governed by Section 13.
Whether Revanna acquired absolute ownership and could validly sell the property.

Section 10 TPA makes void a condition that absolutely restrains a transferee from disposing of the interest transferred.
The invalid restraint is severed, while the transfer itself ordinarily remains effective.
Section 10 applies to gifts as well as transfers for consideration.
Section 13 applies when an interest is actually created for an unborn person, subject to a prior interest.
Merely referring to persons who might later be born does not necessarily mean that the operative gift was made in their favour.

The deeds presently and absolutely gifted the property to Revanna.
They did not give him only a life interest or limited right of management.
The prohibition applied to every possible alienation and was therefore absolute.
Such a condition was directly contrary to Section 10.
The donor could validly transfer ownership, but could not simultaneously give absolute ownership and remove its essential power of alienation.
The condition was therefore void, while the gift in Revanna’s favour remained valid.
Section 13 did not apply because:
the actual donee was Revanna, who was alive when the gift was executed;
no separate proprietary interest was created for an unborn person;
reference to future younger brothers occurred only while describing the restraint.
Revanna consequently became the absolute owner.
His sons did not receive a present or reversionary title merely because they were his descendants.
Once the restraint was disregarded, Revanna possessed full power to sell.
The purchasers acquired valid title through the registered conveyances.