The suit was initiated by the Tamil Nadu Khadi and Village Industries Board, which sought a declaration of its title over a property measuring approximately 3,750 square feet in Kotlambakkam Panchayat, Cuddalore District. This claim was based on a registered gift deed dated March 5, 1983, allegedly executed by the defendant-appellant and accepted by the plaintiff. The trial court dismissed the suit in 1994, citing the lack of acceptance and action on the gift deed.

However, the District Judge reversed this decision in 1997, affirming the gift’s validity, stating it had been acted upon and accepted. The High Court upheld this ruling in 2011, leading the defendant to file a special leave petition, which was later condoned.

The crux of the matter revolved around whether the gift deed was indeed acted upon and whether it remained valid despite a purported revocation in 1987. The analysis hinged on the provisions of the Transfer of Property Act, particularly Section 126, which delineates the circumstances under which a gift can be revoked.

The gift deed in question specified that the property was granted to the plaintiff for manufacturing Khadi Lungi and Khadi Yarn. Notably, it stipulated that neither the donor nor any legal heirs would retain any interest in the property post-gift. The court observed that the deed lacked any clause permitting revocation, rendering the revocation deed dated August 17, 1987, void.

Evidence presented during the proceedings demonstrated that the plaintiff had acted on the gift deed immediately after its execution, applying for mutation and taking possession of the property. These actions constituted clear acceptance and fulfillment of the deed’s terms, reinforcing its validity.

Under Section 126 of the Transfer of Property Act, a gift can only be revoked under specified conditions. The court found no evidence indicating an agreement between the donor and donee that would allow for revocation, nor did the deed itself provide any grounds for such action. Thus, the revocation was deemed ineffective, and the plaintiff retained full rights to the property.

Another critical aspect addressed was the limitation period for the suit. The initial court had concluded that the suit was barred by the limitation period of three years, starting from the alleged revocation date. However, since the gift deed was upheld as valid, the court ruled that the suit for recovery of possession was not subject to this limitation.

The court referenced the Limitation Act, clarifying that the suit for recovery of possession based on title would fall under Article 65, which provides a limitation period of 12 years. This conclusion was pivotal, as it underscored the ongoing nature of property rights and the extended timeframe available to the plaintiff for asserting those rights.

Ultimately, the appellate court and the High Court affirmed the plaintiff’s claim, highlighting that the gift deed was valid, could not be revoked, and that the suit for recovery of possession was not barred by limitation. The ruling reinforces critical legal principles regarding the nature of gift deeds and the limitations surrounding their revocation. The case serves as a significant reference point for understanding property rights and the enforceability of gift deeds in India.

The appeal was dismissed, affirming the lower courts’ decisions and underscoring the importance of properly executed legal documents and adherence to statutory provisions governing property transfers.