Relinquishment Deed

KEY TAKEAWAYS

• A Relinquishment Deed must be between co-owners of an ancestral property.
• The Deed must be registered to give it legal validity under sec 49 of The Registration Act.
• If the Executor resides in another city, the transfer can be done by issuing a Power of Attorney.
•  Once a Relinquishment Deed is executed, it cannot be cancelled.
•  The Limitation period for filing a case against the Relinquishment Deed is 3 years from the date of execution of the transfer.

INTRODUCTION

There are many kinds of deeds in India that are used for transferring one’s right to a particular property, for example, the sale deed, or the gift deed. One such deed is the Relinquishment Deed also known as Release Deed which means to give up, let go, release, or surrender. A Relinquishment Deed is a legal document that has the effect of giving up or releasing the rights, titles, and interests of a particular legal heir in favour of other legal heirs in the common property. This Deed can be recognized only in favour of Legal Heirs to the owner of the property and the property must be an Ancestral Property by nature. This Deed also revolves around when someone dies intestate, without writing a will. The person or the legal heir who is transferring their share of the property is known as the Executor/ Releasor and the person or the legal heir on whose behalf the share of the property is being transferred is known as the Beneficiary/ Releasee.

The Relinquishment Deed needs to be registered positively to give its validity. Section 17 of the Registration Act states that a Relinquishment Deed must be registered. According to section 49 of the Registration Act, 1908, an unregistered deed or insufficiently stamped instrument is not enforceable in a Court of law in case there is any dispute arising between the two parties in the future. 

The Gujarat High Court, on 9th July 2021 in the case of ROSHANBEN HAJIBHAI DERAIYA V. STATE OF GUJARAT [2021 SCC OnLine Guj 1063] held that the Right to property cannot be relinquished if the consent affidavit is not registered duly. It further held in its judgment that the necessary documents under which the Right of a property is to be relinquished needs to be formally registered under the Registration Act without which those documents will lose the power of being of an evidentiary value in the court of law of any jurisdiction. If the document is written, the document would not be treated as a relinquishment deed per the judgment decision of The Hon’ble High Court of Gujarat.

 Such Deed of Relinquishment is to be registered with the nearest Sub-Registrar where the property is located and both the Releasor and the Release need to be present during the day of registration. A Release Deed has very less registration charges compared to a Gift Deed which requires high Stamp Duty due to the process of transfer of one’s share in the ancestral property to another co-owner, the Relinquishment Deed is preferable to the Gift Deed. In some states like the state of West Bengal, there is no provision for registering Relinquishment Deed, therefore, even if there is a transfer of share between co-owners of a particular property, it is to be done through a Gift Deed. The value of Stamp duty during the Registration of such a Deed depends on different states. The Deed is to be executed on a non-judicial paper and duly notarized.

NECESSARY REQUIREMENTS FOR A RELINQUISHMENT DEED.

The few things that are necessary in the deed of Relinquishment are as follows:

1.    The date on which the deed is executed.

2.    Details of the Executant(s)/ Releasor(s).

3.    Details of the Beneficiary(s)/ Releasee(s).

4.    Description of the property.

5.    Purpose of such Relinquishment Deed.

6.    Legal Heir details if any.

7.    Relinquishment whether with consideration or with love and affection.

8.    Signature of both parties along with witness(s) from each party.

DIFFERENCE BETWEEN A RELINQUISHMENT DEED AND A GIFT DEED

Although a Gift Deed also serves the purpose of a Relinquishment Deed, there are also a few points of difference between the two. Firstly, a Relinquishment or a Release Deed is used for the transfer of a co-owner’s share to another co-owner, while with the help of a Gift Deed, transfer of one’s share in the property can be done to anyone not necessarily only to a co-owner. Secondly, in a Relinquishment Deed, there may or may not be any consideration involved in the transfer of one’s share in the property. But, in a Gift Deed, there is no consideration of whatsoever nature involved in the course of the transfer of shares of any movable or immovable property. Thirdly, through a Relinquishment Deed, the transfer of a share of property to another co-owner can be done only if the property is Ancestral but, through a Gift Deed, the transfer of the share of property to another person can be done on any property whether bought or received or inherited. 

The Hon’ble Delhi High Court in the case of TRIPTA KAUSHIK V. SUB REGISTRAR VI-A, Delhi& Anr [2020 SCC Online Del 2748] has laid down the test for determining whether the instrument can be considered as a Release/ Relinquishment Deed. A release deed must have two fundamental elements, the property must already have a vested legal right, and the release must expand that right to become an absolute title for the entire property as far as the parties are concerned. As a result, no one may surrender property in favour of someone else who does not already have co-ownership rights. Not only is a release deed legal in cases when it is given freely. As a result, by virtue of the release, no interest or title has been transferred to a third party who did not already possess the property. Therefore, a release may only be granted in support of an individual who already possesses a right or interest in the property.

The title can be fed by a release, but the title cannot be transferred. Conversely, a "gift" is the voluntary and unrequired transfer of specific existing mobile or immovable property from one individual (referred to as the donor) to another (referred to as the donee), acknowledged by or on behalf of the donee. For the aforementioned reason, the Hon'ble Rajasthan High Court held in the case of STATE OF RAJASTHAN V. ALOKIK JAIN [1998 SCC OnLine Raj 66] case that the relevant document would be a release deed rather than a gift deed even in cases where one co-sharer of the joint agricultural land had merely renounced his claim in favour of another co-sharer with respect to the same agricultural land.

In a few situations during such transfer through a Deed of Relinquishment, a query arises as to what or how the transfer can be done if the Executor resides in one place and the property is located in another place. Suppose, if a property is located in Mumbai and the executor resides in Chennai or if the property is located in Mumbai. The executor resides somewhere out of the Indian Territory. In such cases, the transfer is generally done through a Power of Attorney according to sections 32-33 of The Registration Act, of 1908. The Power of Attorney assigns or empowers some other person to do the registration on behalf of the executors. The following question arises is where the Power of Attorney to be registered for it to be an instrument with legal value and can be enforced legally? Power of Attorney is to be registered in the court under whose jurisdiction the place where the Executor resides comes such registration will be applicable in front of the Mumbai Sub-registrar Office for the registration of a Relinquishment Deed.

CANCELLATION OF A RELINQUISHMENT DEED.

Once the Relinquishment Deed is executed by the executor, it cannot be canceled unless and until it falls under a few heads. Such heads are mentioned as follows:

1.    If there are more than two co-sharers in an ancestral property, then one co-sharer cannot share his part of the right with any one specific co-sharer. For eg, if the legal heirs of an ancestral property are supposed A, B, C, D, E. A here wants to transfer his share of property to C alone. He cannot do so through a Relinquishment Deed. For such type of transfer to take place, it has to be done through a Gift Deed or otherwise, there is no validity of such transfer in the eyes of the law. However, the contrary view has been consistently taken by the Delhi High Court in the case of SRICHAND BADLANI V. GOVT. OF DELHI & Ors. [2013 SCC OnLine Del 5128]  and in the case of TRIPTA KAUSHIK V. SUB REGISTRAR VI-A, Delhi& Anr [2020 SCC OnLine Del 2748] Wherein they have held that an instrument will be construed as a release deed even if the relinquishment is in favour of one of the co-owners and not all the remaining co-owners.

2.    If such a transfer is executed by a minor. A minor cannot execute a Relinquishment Deed or any legal documents of whatever nature. Not only the minor but also his/her Legal Guardian cannot execute such a deed on behalf of the minor. If done so, such transfer has no validity in the eyes of the law.

3.    If the Relinquishment Deed is not registered in the concerned registry office, the Deed stands invalid.

4.    If the Relinquishment Deed is executed by illegal force, by a threat by undue influence, or any other factor that is bad in the eyes of the law, such Deed stands as invalid.

However, in such cases where the Relinquishment Deed is invalid, the Beneficiary cannot approach the court of law praying for compensation or in other words cannot sue the executor for commitment of fraud if it crosses the limitation period. The limitation period for the parties to challenge the other party on the above-mentioned grounds for revoking the Relinquishment Deed is 3 years starting from the day of transfer of share of an ancestral property according to The Limitation Act of 1963. In case of no knowledge of fraud on the part of one party, then the limitation period in such case will be 3 years from the day the person on whom the fraud has been committed, comes to know about it.

To cancel such a Deed, a suit can be filed in the Civil Court under whose jurisdiction the area of the property comes under. Sec 31 of The Specific Performance Act deals with the cancellation of the Registration of Relinquishment Deed.