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        1981 (3) TMI 250 - SC - Indian Laws

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        Gift transfers after the ceiling cutoff do not qualify for the adequate consideration exception under land ceiling law. A gift of land executed after 24 January 1971 could not claim protection under proviso (b) to section 5(6) of the U.P. Imposition of Ceiling on Land ...
                      Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
                        Provisions expressly mentioned in the judgment/order text.

                          Gift transfers after the ceiling cutoff do not qualify for the adequate consideration exception under land ceiling law.

                          A gift of land executed after 24 January 1971 could not claim protection under proviso (b) to section 5(6) of the U.P. Imposition of Ceiling on Land Holdings Act, 1960, because the exception applies only to transfers made in good faith for adequate consideration through an irrevocable instrument and not for the benefit of the tenure-holder or family members. "Adequate consideration" was read in its legal sense as valuable, measurable consideration, and a gift under section 122 of the Transfer of Property Act is a gratuitous transfer without consideration. The burden of proving the exception remained on the claimant, and the gift had to be ignored for ceiling purposes.




                          Issues: Whether a gift of land executed after 24 January 1971 could be protected under proviso (b) to section 5(6) of the U.P. Imposition of Ceiling on Land Holdings Act, 1960 as a transfer made in good faith and for adequate consideration.

                          Analysis: Section 5(6) required transfers made after 24 January 1971, which would otherwise reduce surplus land, to be ignored. Proviso (b) carved out an exception only for transfers approved to be in good faith, for adequate consideration, under an irrevocable instrument, and not benami or for the benefit of the tenure-holder or family members. The expression "adequate consideration" was construed in its legal sense as valuable, measurable consideration, not love and affection or other motives underlying a gift. A gift under section 122 of the Transfer of Property Act is a voluntary transfer without consideration, so a gift cannot satisfy the requirement of adequate consideration. Explanation I did not dilute the proviso, and Explanation II confirmed that the claimant bore the burden of proving the applicability of the exception.

                          Conclusion: The gift was outside the protection of proviso (b) to section 5(6) and had to be ignored for ceiling purposes.

                          Final Conclusion: The statutory exception was confined to transfers supported by legally adequate consideration, and a gratuitous gift executed after the cutoff date did not qualify.

                          Ratio Decidendi: In a ceiling statute, a transfer by way of gift is excluded from an exception limited to transfers made for adequate consideration, because a gift is, by definition, a gratuitous transfer without consideration.


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                          ActsIncome Tax
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