TaxTMI 
TaxTMI 
1981 (3) TMI 250
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....ntroduced which placed a ceiling on any tenure holder to hold land in excess of the ceiling area fixed under the Act. Section 5 contained various sub-sections but in the instant case we are concerned only with sub-section (6) as also clause (b) of the proviso to the said sub-section. By another amendment, being U.P. Act No. 2 of 1975, which was given retrospective operation with effect from 8.6.1973 Explanation I, along with its sub-clauses, was added to sub-section (6) of section 5. 3. The decision in the present case turns upon the interpretation of sub-section (6) of s. 5 and the proviso therein in order to determine the validity of the deed of gift said to have been executed by Chunni Lal Bhatiya, the grandfather of the petitioner Sonia and respondent No. 4 before the District Judge. 4. To begin with, we might like to state here that the facts of the case undoubtedly reveal that if the provisions of the said sub-section (6) were to apply it would work serious hardship to the petitioner but as we are concerned with interpretation of an important statute the mere fact that a correct interpretation may lead to hardship would not be a valid consideration for distorting the la....
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....section (6) of s. 5 of the Act. Thus the only question for determination in the instant case is the legal effect of the prohibition contained in sub-section (6) and clause (b) of its proviso. In order to understand the scope and ambit of sub-section (6) and its proviso, it may be necessary to extract the relevant portions of sub-section (6) and Explanations concerned:- "6. In determining the ceiling area applicable to a tenure-holder, any transfer of land made after the twenty fourth day of January, 1971, which but for the transfer would have been declared surplus land under this Act, shall be ignored and not taken into account: Provided that nothing in this sub-section shall apply to:- ... ... ... ... "(b) a transfer approved to the satisfaction of the prescribed authority to be in good faith and for adequate consideration and under an irrevocable instrument not being a benami transaction or for immediate or deferred benefit of the tenure-holder or other members of his family. Explanation I-For the purposes of this sub- section, the expression transfer of land made after the twenty fourth day of January, 1971, includes:- (a) a ....
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....either before or after the due date so as to evade the provisions of the Act and thus frustrate the very object and the social purpose for which the Act had been passed. In these circumstances, therefore, the word 'transfer' has obviously been used by the legislature in the general sense of the term as defined in the Transfer of Property Act, which is the statute that governs all transfers of movable or immovable properties. In other words, the word 'transfer' being a term of well-known legal significance having well ascertained incidents, the legislature did not think it necessary to define the term 'transfer' separately. Similarly, the word 'consideration' also being a term commonly used to denote contracts, sales and transactions, has been used in the same sense, that is to say, as defined by s. 2(d) of the Contract Act. 10. It is well settled that whenever the legislature uses certain terms or expressions of well-known legal significance or connotation the courts must interpret them as used or understood in the popular sense. In the case of C.I.T. Andhra Pradesh v. M/s. Taj Mahal Hotel, Secundrabad this Court while laying down guidelines for h....
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....b) of the proviso, namely, that it should be for consideration. The High Court has further held that its view is reinforced by the word 'adequate' which qualifies the word 'consideration' which completely rules out a transfer in the nature of a gift. The High Court was of the view that a transfer of property by way of a gift being a purely gratuitous transfer made out of love and affection or for the spiritual benefit of the donor, falls completely beyond the ambit of clause (b) of the proviso and, therefore, has to be ignored under the provisions of the said sub-section (6) of s. 5 of the Act. 13. Mr. Kacker, appearing for the appellant, assailed the view taken by the High Court on the ground that the High Court has given a very restricted meaning to the term 'transfer for adequate consideration' by limiting the import of the word 'consideration'. He argued in the first place that a gift cannot be said to be a transfer without consideration because even love and affection, spiritual benefit or other factors of similar nature may provide sufficient consideration for the gift. Secondly, it was argued that even if a gift was a transfer without consi....
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....transferring personal property, are thus to be distinguished from each other, that gifts are always gratuitous, grants are upon some consideration or equivalent." 15. Thus, according to Lord Halsbury's statement the essential distinction between a gift and a grant is that whereas a gift is absolutely gratuitous, grant is based on some consideration or equivalent. Similarly in Volume 38 of Corpus Juris Secundum, it has been clearly stated that a gift is a transfer without consideration and in this connection while defining the nature and character of a gift the author states as follows: "A gift is commonly defined as a voluntary transfer of property by one to another, without any consideration or compensation therefor. Any piece of property which is voluntarily transferred by one person to another without compensation or consideration. A gift is a gratuity, and an act of generosity, and not only does not require a consideration but there can be none; if there is a consideration for the transaction it is not a gift." 16. It is, therefore, clear from the statement made in this book that the concept of gift is diametrically opposed to the presence of any consideratio....
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....ecific performance merely means that contract price must be substantially just and fair valuation under all circumstances." (Emphasis supplied) In Volume 17 of Corpus Juris Secundum (p.420-421 and 425) the import of 'consideration' has been described thus:- "Various definitions of consideration are to be found in the textbooks and judicial opinions. A sufficient one, as stated in Corpus Juris and which has been quoted and cited with approval is, "a benefit to the party promising, or a loss or detriment to the party to whom the promise is made............... At common law every contract not under seal requires a consideration to support it, that is, as shown in the definition above, some benefit to the promisor, or some detriment to the promisee................. There is a sufficient consideration for a promise if there is any benefit to the promisor or any detriment to the promisee..........It may be laid down as a general rule, in accordance with the definition given above, that there is a sufficient consideration for a promise if there is any benefit to the promisor or any loss or detriment to the promisee." 18. The gist of the te....
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....nor, to another, called the donee, and accepted by or on behalf of the donee. Such acceptance must be made during the lifetime of the donor and while he is still capable of giving. If the donee dies before acceptance, the gift is void." 20. Thus, s. 122 of the Transfer of Property Act clearly postulates that a gift must have two essential characteristics-(1) that it must be made voluntarily, and (2) that it should be without consideration. This is apart from the other ingredients like acceptance, etc. Against the background of these facts and the undisputed position of law, the words, 'transfer for adequate consideration' used in clause (b) of the proviso clearly and expressly exclude a transaction which is in the nature of a gift and which is without consideration. Love and affection, etc., may be motive for making a gift but is not a consideration in the legal sense of the term. As regards the argument of Mr. Kacker that if the legislature intended to exclude gifts, clause (b) of the proviso should have expressly said so; the answer is very simple. Every legislature has its own technical or legal device to express its intendment. Some legislatures may....
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....t be given its due import and significance. In the instant case, the words 'adequate consideration' have undoubtedly a well recognised concept and, as indicated above, the intention was to exclude any transaction which is not for adequate consideration. Not to speak of a gift but even if a sale is found to be bona fide but the consideration is inadequate, for instance, where the property has been sold for a nominal price or below the market value, the transaction would fall beyond the protection given by clause (b) of the proviso. Our attention has been drawn by Mr. Kacker to a single Bench decision by Banerji, J, in Fateh Singh v. State of Uttar Pradesh & Ors where the learned Judge had taken the view that the definition of a transfer given in clause (b) of the proviso included a gift because a gift also could not be said to be a transfer without consideration even though consideration may not be weighed in terms of money. The learned Judge in taking this view had obviously fallen into error of confusing what was the motive or the reason for the gift as being a legal consideration of it. It has already been pointed out that in considering the nature of a gift one should no....
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....nd differentiates it from a grant." 23. The learned Judge has rightly pointed out that complete absence of consideration is the main hallmark which distinguishes a gift from a grant or for that matter other transactions which may be for valuable or adequate consideration. We find ourselves in complete agreement with the observations made by Jagdisan, J. in Kulasekaraperumal's case (supra) and Sahay, J. in Debi Saran's case (supra) which correctly represent the character and nature of the gift as contemplated by law. Banerji, J. in Fateh Singh's case (supra) seems to have relied heavily on Explanation I of sub-section (6) of s. (5) of the Act which refers to a declaration of a tenure holder made in a suit or any admission, acknowledgement, relinquishment, etc., made in any other deed or instrument in order to reinforce his conclusion that clause (b) of the proviso did not exclude a gift. With due respect, here the learned Judge completely failed to appreciate the scope of clause (b) of the proviso and Explanation I. It is well settled that an Explanation merely widens the scope of the main section and is not meant to carve out a particular exception to the contents of....
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....ignificance having a well recognised popular sense and hence they would convey the same meaning and import whenever used in other statutes unless a contrary intention appears from the language employed by the legislature in the statute. Moreover, the object of the Income Tax Act as also the present Act seems to be more or less identical. Whereas the object of the Income Tax Act in enacting s. 16(3)(b) which is extracted below, is to circumvent and prevent a growing tendency on the part of the assessees to avoid or reduce tax liability by means of settlements: "16(3).... (a) (b) so much of the income of any person or association of persons as arises from assets transferred otherwise than for adequate consideration to the person or association by such individual for the benefit of his wife or a minor child or both." In the instant case also 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....