The Supreme Court has allowed an appeal in a decades-old family property dispute, holding that a gift deed could not stand where the donor had already surrendered his claim over the land under a compromise approved by the High Court.
A Bench of Justice Sanjay Kumar and Justice Sanjeev Sachdeva set aside the judgments of the Telangana High Court and the trial court, which had dismissed a suit challenging the transfer. The Court decreed the suit as prayed for, granting relief sought in relation to title, invalidation of the gift deed, mutation of revenue records and protection against interference with possession.
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The dispute concerned ancestral properties left behind by B. Venkat Reddy, who died in 1948 during the Razakar Movement. His eldest son, Sudhakar Reddy, also died that year.
In 1959, Venkat Reddy’s widow, Manikyamma, his daughter-in-law, Anasuyamma, and his two surviving sons, Madhusudhan Reddy and Janardhan Reddy, entered into a family settlement allocating separate shares in the ancestral properties.
Under this arrangement, Manikyamma received 53 acres and 10 guntas in Karkalpahad village. Anasuyamma received properties across four villages, while Madhusudhan Reddy and Janardhan Reddy were allotted separate parcels.
Anasuyamma, who adopted Venkatraji Reddy in 1975, subsequently joined him in filing a partition suit in 1977. The suit concerned properties described in Schedules A, B and C.
In April 1984, the trial court directed partition of the Schedule B and C properties. It rejected the claim concerning Schedule A on the ground that those properties were already covered by the 1959 family settlement.
During the appeal against the partition decree, Anasuyamma, her adopted son and Madhusudhan Reddy entered into a written settlement dated February 24, 1986.
Under the compromise, Anasuyamma and Venkatraji Reddy relinquished their claim to a one-third share in a house at Himayatnagar, Hyderabad. Madhusudhan Reddy received that house absolutely.
In return, Madhusudhan Reddy gave up his claim to a share in the properties of his mother, Manikyamma, surrendering those claims in favour of Anasuyamma and Venkatraji Reddy.
Anasuyamma and her adopted son also relinquished their claim to a one-third share in another house at Karkalpahad village. Madhusudhan Reddy paid them ₹2.20 lakh.
The compromise was recorded in proceedings under Order XXIII Rule 3 of the Code of Civil Procedure, 1908. The High Court subsequently allowed the appeal on September 7, 1990, in light of the settlement and a further settlement involving another branch of the family.
In April 2007, Madhusudhan Reddy executed a registered gift deed in favour of Siddhartha Reddy, the grandson of his brother Janardhan Reddy, transferring several parcels of land in Karkalpahad village.
The Supreme Court found that the gifted lands had not fallen to Madhusudhan Reddy’s share under the 1959 settlement. His allotment in that village was confined to one acre and 30 guntas in Survey No. 15.
The Court noted that the lands covered by the gift deed had been allotted to Manikyamma. Madhusudhan Reddy had already relinquished his claim over those properties through the 1986 compromise, which subsequently received the High Court’s approval.
Anasuyamma, Venkatraji Reddy and Gunna Malinidevi consequently filed a fresh suit in 2007. Malinidevi had purchased a portion of the disputed property from Venkatraji Reddy through a registered sale deed in 1998.
They sought a declaration of title, a declaration that the 2007 gift deed was null and void, necessary mutation in the revenue records and a permanent injunction restraining interference with their possession.
The Senior Civil Judge, Mahabubnagar, dismissed the suit in April 2012.
The Supreme Court expressed surprise at the trial court’s conclusion that the High Court’s 1990 compromise decree had no evidentiary value. It found that the trial court had completely ignored the compromise between Madhusudhan Reddy, Anasuyamma and Venkatraji Reddy.
The Telangana High Court dismissed the subsequent appeal in December 2022. The Supreme Court held that the High Court, despite extensively recording the chronology and arguments, failed to draw the correct conclusions from the family settlement and the court-approved compromise.
The Supreme Court specifically criticised the High Court’s observation that execution of the gift deed dated April 24, 2007, had never been disputed.
It pointed out that the suit itself had been instituted on August 21, 2007, to challenge that gift deed. The Court described the High Court’s non-application of mind as “patent”.
The Bench also rejected the reasoning used to dismiss Venkatraji Reddy’s claim to enjoyment of the properties allotted to Manikyamma. It held that the High Court had failed to account for both the 1959 settlement and the 1986 compromise.
Those documents established that Madhusudhan Reddy had accepted the earlier allocation and subsequently surrendered his claim to Manikyamma’s properties while obtaining full rights over the Himayatnagar house.
“Founded on such fundamental errors, the judgments of the High Court and the Trial Court cannot be sustained,” the Bench held.
The Supreme Court noted that none of the respondents appeared to contest the appeal despite service of notice. They also did not enter appearance after the Court’s May 16, 2023 order directing maintenance of status quo regarding the nature and possession of the disputed lands.
The Bench set aside both the Telangana High Court’s December 12, 2022 judgment and the trial court’s April 9, 2012 judgment.
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