'Consideration' Need Not Always Be In Monetary Terms; It Can Be In Other Forms As Well: Supreme Court
|The Supreme Court reiterated that consideration does not always have to be in monetary terms as it can be in other forms as well.
The Court set aside the decision of the Madras High Court restoring the findings of the Trial Court and the First Appellate Court. The case involved the appellants contesting the claim in a 2/3rd share of the property in question based on a 1963 settlement deed.
The Bench of Justice C.T. Ravikumar and Justice Sanjay Karol observed, “What flows from the above-cited judgments as also provisions of law, is that ‘consideration’ need not always be in monetary terms. It can be in other forms as well. In the present case, it is seen that the transfer of property in favour of Govindammal was in recognition of the fact that she had been taking care of the transferors and would continue to do so while also using the same to carry out charitable work.”
Senior Advocate S. Nagamuthu represented the Appellants, while Senior Advocate V. Prabhakar appeared for the Respondent.
The Appellants’ arguments included that the lower courts had correctly and concurrently rejected the oral partition and that the High Court would not ordinarily disturb concurrent findings of fact.
The Respondents argued that the document, though titled as a settlement deed, was in fact a gift deed and submitted that the nomenclature of the document hardly made any difference.
The Supreme Court noted the primary issue of whether the deed executed in 1963 was a gift deed or a settlement deed. Referring to the terms of the Transfer of Property Act, 1882, the Court referred to the definition from the Indian Contract Act, 1872 pointing out that “consideration need not always be in monetary terms” and “can be in other forms as well.”
The Court referred to its decision in CIT v. Ahmedabad Urban Development Authority (2023) wherein it was observed, “From a conspectus of decisions and dictionary meaning, the inescapable conclusion that follows is that consideration means a reasonable equivalent or other valuable benefit passed on by the promisor to the promisee or by the transferor to the transferee. Similarly, when the word consideration is qualified by the word sole, it makes consideration stronger so as to make it sufficient and valuable having regard to the facts, circumstances and necessities of the case.”
Consequently, the Court held, “In that view of the matter, the High Court has erred in taking such a constricted view of ‘consideration’, especially taking note of the fact that this settlement was between the members of a family…The above conclusion apart, it was also to be demonstrated by the High Court that the reversal of concurrent findings by the Courts below was justified. The jurisdiction to interfere in findings where the Courts below have been ad idem, is limited and such limitation is well expounded.”
Accordingly, the Supreme Court allowed the Appeal.
Cause Title: Ramachandra Reddy (Dead) Thr. Lrs. & Ors. v. Ramulu Ammal (Dead) Thr. Lrs. (Neutral Citation: 2024 INSC 868)
Appearance:
Appellants: Senior Advocate S. Nagamuthu; Advocate Balaji Subramanian; AOR A. Lakshminarayanan and G. Balaji
Respondent: Senior Advocate V. Prabhakar; Advocates Ruchi, Arimardhan Sharma, and Mrinalini Ramesh; AOR Shashi Bhushan Kumar