Illoth Valappil Ambunhi (D) By LRs. v. Kunhambu Karanavan
Background
A person named Raman had executed a deed of gift of a property in favour of a deity-linked religious endowment ("the Bhandaram"). The appellant's predecessor claimed the gift never took legal effect because there was no evidence anyone accepted it on the deity's behalf, so Raman later cancelled the gift and sold the same property to him. The Kerala High Court, in second appeal, reversed the concurrent findings of the trial court and first appellate court and held the property belonged to the Bhandaram, prompting this further appeal to the Supreme Court.
Decision Breakdown
The Supreme Court held that once a valid gift is made and possession is treated as delivered, it cannot be unilaterally "cancelled" by the donor: any later cancellation deed and subsequent sale based on it are void and without authority. It further held that the three-year limitation period under Article 59 of the Limitation Act (for cancelling an instrument on grounds like fraud or mistake) did not apply here, since the donor never had the authority to revoke the original gift in the first place, making the subsequent documents a nullity from the outset rather than merely voidable. Agreeing with the High Court's reasoning, the Supreme Court dismissed the appeal, while leaving the appellant free to separately pursue a claim for damages/refund against the person who had sold him the property without good title.
Lesson Learnt
A property owner cannot simply "cancel" a gift deed they have already validly executed and then resell the same property to someone else: such a cancellation and any later sale based on it are void, and a buyer who relies on a defective title bears the risk of losing the property, though they may still have a separate claim for compensation against the seller.