Settlement deeds can now be conditional, says circular

Parents are free to cancel transfer of assets to wards if the terms are not fulfilled

An elderly couple walked into the office of the Sub-Registrar in Pattukottai in Thanjavur district recently with a petition to seek cancellation of the property that they transferred to their son.

The grievance of the visibly frail couple was that their son abandoned them at the behest of his wife and was not even giving them money for medicines. The Sub-Registrar could only take pity on the elderly duo since cancellation of the settlement deed could not be done unilaterally. The father had not laid down any conditions at the time of transferring the property to his son.

This is one among several cases where abandoned parents go to the Registration Department or move court seeking revocation of transfer of immovable assets, a senior official in the Registration Department said. But the rule is clear that unconditional settlement deeds cannot be cancelled unilaterally. Against this and in the wake of several court judgments, the Tamil Nadu Registration Department has issued a circular which enables the settlor to lay down the terms and conditions while transferring the property to settlee.

If the conditions are not fulfilled, the settlor can revoke the deed unilaterally.

Based on past rulings

The order relies on various judgments of the Madras High Court where the point that “the Sub-Registrar is not the competent authority to register the unilateral cancellation of settlement deed” had been emphasised. The circular was sent to all Sub-Registrars on Friday.

Settlement deeds with conditions may not be considered for sale or loans unless the settlor is also a party in application, says Tamil Nadu Registration Department Officials Association president S.E. Vasudhevan. “Many parents give their property to their children out of love and affection. In the event of such love and affection fading away due to various reasons, the parents will have no right to take back the property. We have come across many such cases. Now there is a provision for the parents to lay conditions that they should be allowed to stay with children, taken good care etc,” he says.

Lack of awareness

Mr. Vasudhevan says there is lack of awareness among elderly people who simply sign registration deeds transferring all they have to children. “Many parents who have given assets worth several crores of rupees are now living in old age homes.”

He said settlement deeds need not be necessarily within the family. When an outsider is the settlee, the stamp duty and registration fee would be more.

According to the Inspector-General of Registrations J. Kumaragurubaran said the clarification order was based on a Supreme Court order in the Narmadaben Maganlal Thakker and Reninkuntla Rajamma Vs K. Sarwanamma case in which a donor had executed a gift deed imposing certain conditions to be fulfilled by the donee, and which was subsequently cancelled unilaterally by the donor.