WHETHER RELINQUISHMENT DEED EXECUTED BY A RELEASOR IN FAVOR OF ONLY FEW RELEASEE(s) AS PER HIS CHOICE OR NOT

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WHETHER RELINQUISHMENT DEED EXECUTED BY A RELEASOR IN FAVOR OF ONLY FEW RELEASEE(s) AS PER HIS CHOICE OR NOT

     I. INTRODUCTION

By the way of the present legal note, the question – whether a relinquishment deed could be executed by a releasor in favor of only few releasee(s) of his choice or not.

The High Court of Delhi vide judgment dated 20th May 2020 in the case titled “Tripta Kaushik and Ors. V Sub-registrar VI – A, Delhi and Ors. [270 (2020) DLT 36]” has answered the aforementioned question in the negative, stating that where the relinquishment of the right by the co-owner is only in favor of one of the co-owner and not against all, the document would be one of Gift/ Conveyance and not of ‘release’. The said judgment is being discussed in detail hereinbelow.

     II. ANALYSIS AND OBSERVATIONS

A. Facts:

In the present case, the petition has been filed by the Petitioners to quash the orders (2) issued by the Stamp Authority dated 01.03.2013 and 05.03.2019.

The Stamp Authority vide order dated 01.09.2019, impounded a relinquishment deed dated 01.03.2019, whereby, son of the Petitioner 1 had released his share in the property (“Property - 1”) in favor of her mother i.e., the Petitioner 1 herein. As per the order of the authority, the nature of said document is of conveyance/ gift and not of relinquishment. The property in question i.e., Property - 1 was acquired by one – Brijesh Kumar Kaushik and upon his death, the Delhi Development Board executed a Conveyance Deed in favor of Petitioner 1 and her son. By the said relinquishment deed, the son aims to release/ relinquish his rights in favor of Petitioner.

Further, the Stamp Authority vide order dated 01.03.2013 impounded the Relinquishment deeds (3) executed by the sisters of Petitioner 2, whereby, the sisters individually executed three deeds on different dates, relinquishing their share over property (“Property 2”) in favor of Petitioner 2. The authority said that said deeds are of the nature of conveyance/ gift and not of relinquishment. The Property 2 was jointly owned by the mother and the father of the Petitioner 2 and upon the death of the father of Petitioner 2, the ownership rights over Property 2 devolved upon Petitioner 2 and his 6 sisters.

B. Judgment:

The Court while placing the reliance on several cases, held the following –

i. The following test to must be adopted to determine whether an instrument can be a release/ relinquishment –

a. In determining whether the document is a release or Gift/Conveyance, the nomenclature used to describe the document or the language which the party may choose to employ in framing the document, is not a decisive factor. What is decisive is the actual character of the transaction intended by the executants;

b. Determination of the nature of the document is not a pure question of law;

c. Where a co-owner renounced his right in a property in favour of the other co-owner, mere use of word like 'consideration' and 'transfer' would not affect the true character of the transaction;

d. What is intended by a Release Deed is the relinquishment of the right of the coowner;

e. Co-ownership need not be only through inheritance, but can also be through purchase;

f. Where the relinquishment of the right by the co-owner is only in favour of one of the co-owner and not against all, the document would be one of Gift/Conveyance and not of "release".

ii. In light of the above, the Court set aside the order dated 01.09.2019 of the Stamp Authority as the Relinquishment Deed dated 01.03.2019 satisfies the test. However, the Court upheld the order dated 01.03.2013 of the Stamp Authority, and held that in the present case, for Property 2, was owned by the mother and the father of the Petitioner 2 in equal share. On the death of the father, his share devolved upon the mother of the Petitioner 2, the Petitioner 2 himself, and his sisters, in equal share. The sisters of the Petitioner 2 did not relinquish their shares in favour of the remaining co-owners, that is, the mother and the Petitioner 2, however, sought to release the same in favour of the Petitioner 2 alone. The same therefore, amounts to a Gift and not a Release.

The relevant paras of the said judgment are reproduced hereinbelow, for the ease of reference –
         

            • Para 18

“In The Board of Revenue, the Chief Controlling Revenue Authority v. V.M. Murugesa Mudaliar of Gudiyatham, the Full Bench of the Madras High Court was considering a document whereby three persons renounced all their interest in the property of the partnership firm in favour of the two remaining partners for some consideration. The Full Bench has held as under…

… In such a case there need be no conveyance as such by one of the co-owners in favour of the other co-owners. Each co-owner in theory is entitled to enjoy the entire property in part and in whole. It is not therefore necessary for one of the co-owners to convey his interest to the other co-owner. It is sufficient if he releases his interest. The result of such release would be the enlargement of the share of the other co-owner. There can be no release by one person in favour of another, who is not already entitled to the property as a co-owner…”

            • Para 19:

“In Chief Controlling Revenue Authority, Referring Officer v. Rustorn Nusserwanji Patel, MANU/TN/0223/1968, the Full Bench of the Madras High Court held that the nomenclature given to the instrument is not decisive nor is the language which the parties may choose to employ in framing the document. What is decisive is the actual character of the transaction and the precise nature of the rights created by means of the instrument…”

            • Para 28:

“Judged from this view, the rulings in Chief Controlling Revenue Authority v. Patel for the ruling in Balwant Kaur v. State are not in conflict with the decision of Rajamannar, C.J., in Board of Revenue v. Murugesa, as in both the cases, there is enlargement of the shares of the co-owners and a particular co-owner from out of the several co-owners is not preferred, while making relinquishments. ”

            • Para 29:

“Even the Full Bench of this Court in R.C. No. 83/70 dt. 18-1-1974 also took the view that inasmuch as the release was only in favour of the son of the deceased but not in favour of all the co-owners having rights and interests in the property, the deed was not found to be a deed of release but it is only a deed of conveyance as it was supported by consideration also.”

            • Para 30:

“In the case on hand, from out of ten co-owners, four co-owners executed separate four deeds each relinquishing his 1/10th share in the property in favour of the remaining six co-owners. If the four co-owners out of the ten co- owners would have executed one relinquishment deed, relinquishing their rights and interests in the property owned by all of them as in the case of Board of Revenue v. Murugesa such a document could have been construed to be a deed of release. In the case of Balwant Kaur v. State, two daughters, who are co- owners, relinquished their rights and interest in favour of the remaining co- owners, namely, mother and brother. But in the case on hand, each has executed separate deed though of course in favour of the remaining co-owners. The execution of separate relinquishment deed by individual co-owner relinquishing his share is not contemplated by the decision of the Full Bench of the Madras High Court in Board of Revenue v. Murugesa.”

            • Para 31:

“The ruling in Board of Revenue v. Murugesa requires the release by one co- owner or by two or few co-owners in favour of all the co-owners. If each co- owner's document in the case on hand is taken into consideration, it reveals that the release is not in favour of all the co-owners. Thus the relinquishment is not in accordance with the law propounded by the Full Bench in Board of Revenue v. Murugesa. The document, therefore, cannot be construed to be deeds of release.”

            • Para 33:

“…Merely because these documents are executed on different dates, cannot by itself be a determinative factor. It would always depend on facts of each case as to whether merely because the documents are executed separately, they have to be treated as separate transactions or part of one whole…”

                III. CONCLUSION

In the light of the above, it may be concluded that where the relinquishment of the right by the co-owner is only in favor of one of the co-owner and not against all, the document would be one of Gift/ Conveyance and not of ‘release’. This that implies releasor cannot relinquish his share in favor of selected co-owners, and under a relinquishment deed, releasor may relinquish his share only in favor of all the remaining co-owners.