1981 (3) TMI 250 - SC - Indian Laws

Gift deed executed after due date under UP Land Ceiling Act invalidated for lacking adequate consideration

SONIA BHATIA Versus STATE OF UP.

The SC upheld the HC's decision invalidating a gift deed executed after the due date under the U.P. Imposition of Ceiling on Land Holdings Act, 1960. The ... Interpretation of sub-section (6) of s. 5 of the U.P. Imposition of Ceiling on Land Holdings Act, 1960 - Validity of the deed of gift executed after the due date - transfer for adequate consideration - Meaning of word 'Gift' and 'Adequate consideration' - distinction between a 'Gift' and 'Grant' - HELD THAT:- In the instant case the avowed object of sub-section (6) of section 5 of the Act is to prevent the large landholders from evading the ceiling law by executing transfers, instruments or gifts so as to reduce their surplus area. Where the two statutes have a common and identical object then the legal terms used in one statute must be given the same meaning in the other. It cannot be said that the words 'adequate consideration' appearing in sub-section (6) of s. 5 of the Act do not take their colour from the context but are in conformity with the main object of the Act, to prevent evasion of the ceiling law by large tenure holders in anticipation of the passing of the Ceiling Law. For these reasons, therefore, the argument of Mr. Kacker on this score must be rejected. We, therefore, hold that in view of the interpretation placed by this Court on the words 'adequate consideration' which fully applies to the present case and to the same language employed in sub- section (6) of s. 5 of the Act, a gift is not only impliedly but expressly excluded by the Act. We must remember that the Act is a valuable piece of social legislation with the avowed object of ensuring equitable distribution of the land by taking away land from large tenure holders and distributing the same among landless tenants or using the same for public utility schemes which is in the larger interest of the community at large. The Act seems to implement one of the most important constitutional directives contained in Part IV of the Constitution of India. If in this process a few individuals suffer severe hardship that cannot be helped, for individual interests must yield to the larger interests of the community or the country as indeed every noble cause claims its martyr. As this was the only point raised before us, we find no merit in the same. Thus, we hold that the High Court was right in allowing the writ petition in respect of the gift in question. The appeal fails and is accordingly dismissed but without any order as to costs. Appeal dismissed. ISSUES PRESENTED and CONSIDEREDThe primary issue considered by the Court was the interpretation of sub-section (6) of section 5 of the U.P. Imposition of Ceiling on Land Holdings Act, 1960 (the 'Act') and its proviso, particularly clause (b), to determine the validity of a deed of gift executed by Chunni Lal Bhatiya in favor of his granddaughter, Sonia. The core legal question was whether the gift, executed after the due date specified in the Act, could be considered valid under the proviso, which allows exceptions for transfers made in good faith and for adequate consideration.ISSUE-WISE DETAILED ANALYSISRelevant Legal Framework and PrecedentsThe Act, as amended, imposes a ceiling on land holdings and mandates that any transfer of land made after January 24, 1971, which would have been declared surplus under the Act, shall be ignored. However, the proviso to sub-section (6) of section 5 allows exceptions for transfers made in good faith, for adequate consideration, and under an irrevocable instrument, provided they are not benami transactions or for the immediate or deferred benefit of the tenure holder or their family members.Court's Interpretation and ReasoningThe Court emphasized that the legislative intent was to prevent large landholders from evading the ceiling law through fictitious transfers. The term 'transfer' was understood in its general legal sense, as defined in the Transfer of Property Act, which governs all transfers of movable or immovable properties. The Court noted that 'consideration' is a term of well-known legal significance, as defined by section 2(d) of the Contract Act, and must be interpreted in its popular sense.Key Evidence and FindingsThe District Judge had found the gift to be bona fide and executed in good faith. However, the High Court had held that a gift, being a transfer without consideration, did not fulfill the essential ingredient of 'adequate consideration' required by clause (b) of the proviso. The High Court's view was that the word 'adequate' qualifying 'consideration' ruled out a gift, which is purely gratuitous and without monetary consideration.Application of Law to FactsThe Court analyzed the definitions of 'gift' and 'consideration' from various legal dictionaries and authorities, concluding that a gift is a voluntary transfer without consideration. The Court held that the term 'adequate consideration' implies a monetary equivalent or valuable benefit, which is absent in a gift. The Court found that the legislative intent was to exclude gifts from the ambit of clause (b) of the proviso by using the term 'adequate consideration.'Treatment of Competing ArgumentsThe appellant argued that love and affection could constitute consideration for a gift. The Court rejected this argument, stating that love and affection are motives, not legal considerations. The Court emphasized that the legislature's use of 'adequate' to qualify 'consideration' clearly excludes gifts, as love and affection cannot be measured in monetary terms.ConclusionsThe Court concluded that the gift in question did not meet the requirements of clause (b) of the proviso, as it lacked adequate consideration. The Court upheld the High Court's decision, dismissing the appeal.SIGNIFICANT HOLDINGSThe Court held that 'adequate consideration' excludes gifts, as they are transfers without monetary consideration. The Court emphasized that the legislative intent was to prevent evasion of the ceiling law by excluding gratuitous transfers from the protection of the proviso. The Court stated, 'The words 'adequate consideration' clearly postulate that consideration must be capable of being measured in terms of money value.'The Court also highlighted that individual hardships resulting from the application of the Act cannot override the broader social objective of equitable land distribution. The Court remarked, 'If in this process a few individuals suffer severe hardship that cannot be helped, for individual interests must yield to the larger interests of the community.'In conclusion, the Court affirmed the High Court's decision to ignore the deed of gift under the Act, reinforcing the principle that gifts, lacking adequate consideration, do not qualify for the exception provided in clause (b) of the proviso to sub-section (6) of section 5 of the Act.