Registered Settlement Deed Can’t Be Unilaterally Cancelled Without Consent or Court Order: Madras High Court Affirms Irrevocability of Gift Under T.P. Act

“Once a Settlement Deed Is Executed and Registered, the Settlor Ceases to Have Any Title to Cancel It Unilaterally” – In a significant judgment reaffirming the finality and binding nature of a registered gift, the Madras High Court on January 9, 2026, declared that a registered settlement deed once executed, accepted, and acted upon by the beneficiary cannot be cancelled unilaterally by the donor unless the deed itself reserves such a right or there is clear proof of fraud or coercion.

Justice K. Govindarajan Thilakavadi, while dismissing Second Appeal No. 456 of 2025, observed:

“A separate cancellation deed registered by the settlor alone is legally ineffective and void. The only recourse is to approach a competent Civil Court and establish valid grounds such as fraud or coercion.”

The Court upheld the concurrent findings of the Trial Court and the First Appellate Court, which had earlier declared the unilateral cancellation deed and subsequent settlement and mortgage deeds to be null and void.

“Once You Gift, You Let Go”: High Court Says Registered Settlement Becomes Irrevocable Without Specific Cancellation Clause

The dispute arose from a suit filed by Arunraj, who had received the suit property through a registered settlement deed dated 06.03.2009 from his grandmother, Lakshmi Ammal. Years later, she executed a cancellation deed on 12.04.2011, claiming that the earlier settlement had been procured under pressure from her son (Arunraj’s father), and thereafter executed another settlement deed in 2015 in favour of her daughters. A mortgage deed followed in 2016.

Rejecting these actions, the Court said:

“Unilateral cancellation is permissible only if the original settlement deed included specific conditions and the settlee failed to fulfil them, as stated in the deed. Otherwise, the gift is irrevocable.”

The grandmother alleged that she was not aware of the contents of the 2009 deed and had no intention to transfer her property, but the Court was not convinced. The original settlement deed had been duly registered, witnessed by her own husband, and contained no clause reserving the right of revocation.

“Possession Is Not Always Nine-Tenths of the Law”: Delivery Not Mandatory for Valid Gift If Deed Is Registered and Accepted

The appellants argued that the deed was not acted upon and there was no delivery of possession, but the Court clarified that under Section 122 of the Transfer of Property Act, 1882, physical possession is not a sine qua non for validating a gift.

The Court pointed out that:

“Delivery of possession is not required if the settlement is registered and accepted by the beneficiary. The factum of acceptance can be inferred from conduct.”

Justice Thilakavadi noted that the original title deed was in the plaintiff’s possession, and the settlement deed itself recorded that the settlor and her husband would reside with the plaintiff during their lifetime—further proving that the gift was acted upon.

“No Whisper of Fraud in Cancellation or Subsequent Deed”: High Court Discredits Allegations Raised as Afterthought

On the claim of coercion and manipulation, the Court found that neither the cancellation deed nor the subsequent settlement deed made any mention of fraud or undue influence. Justice Thilakavadi emphasized:

“The reasons for cancellation must be pleaded and proved before a competent Court. Vague allegations made years later, without contemporaneous protest or legal challenge, are insufficient.”

The Court held that the burden to prove fraud or coercion lay squarely on the settlor, and in this case, it remained completely unsubstantiated.

“No Substantial Question of Law”: Second Appeal Dismissed, Lower Court Decrees Upheld in Full

Reinforcing the limited scope of interference under Section 100 CPC, the Court noted that the findings of the Trial Court and the First Appellate Court were based on sound reasoning and evidence. There was no perversity in their approach, and no substantial question of law arose to warrant second appellate jurisdiction.

Justice Thilakavadi concluded:

“There is no infirmity or illegality in the concurrent findings of the Courts below. Once the settlement deed has been acted upon, the executant has no right to cancel it unilaterally.”

Settlement Deed of 2009 Stands, All Later Documents Nullified

The High Court’s decision effectively confirms that the settlement deed of 2009 is valid and enforceable, and that the cancellation deed (2011), settlement deed (2015), and mortgage deed (2016) are null and void in the eyes of law.

“This second appeal stands dismissed. The cancellation and subsequent transfers are void and cannot operate to defeat the vested rights of the plaintiff under the original settlement deed.”

Date of Decision: 09 January 2026