Court affirms absolute ownership of property despite restrictive clause against marriage in settlement deed
In a landmark judgment, the Kerala High Court has ruled that a restrictive covenant in a settlement deed, which extinguishes the rights of the donee upon marriage or becoming a nun, is void. The court's decision came in response to an appeal in the case of Varkey Varghese v. Kathreena, where the validity of such a condition was challenged under the Indian Contract Act, 1872, and the Transfer of Property Act, 1882.
The case revolved around a settlement deed executed by a father in favor of his daughter, Kathreena, which stipulated that her rights to the property would be extinguished upon her marriage or if she became a nun. Kathreena, who was given absolute ownership of the property under the deed, challenged the clause as being void ab initio.
The trial court initially dismissed the suit on the grounds of limitation, asserting that the suit, filed in 2008, was barred under Article 58 of the Limitation Act, 1963. However, the First Appellate Court reversed this decision, holding that the condition was void and that Kathreena was entitled to absolute ownership of the property.
The High Court, presided by Justice Easwaran S., upheld the appellate court's ruling, stating that the clause was against public policy and forbidden by law. The court emphasized that under Section 26 of the Indian Contract Act, 1872, any agreement in restraint of marriage is void. Furthermore, Section 25 of the Transfer of Property Act, 1882, invalidates conditions that are impossible, forbidden by law, or against public policy.
The court further clarified that Section 11 of the Transfer of Property Act, 1882, asserts that when a property is transferred absolutely, any subsequent restrictive condition is void. The court found that the settlement deed created an absolute interest in favor of Kathreena, thus nullifying the restrictive clause.
This decision reinforces the principle that conditions in legal documents that contravene statutory provisions or public policy cannot be enforced, thereby protecting the rights of individuals against arbitrary conditions that infringe on personal freedoms.
Bottom line:-
A restrictive covenant in a settlement deed that extinguishes the rights of the donee upon marriage or becoming a nun is void under Section 26 of the Indian Contract Act, 1872, and Section 25 of the Transfer of Property Act, 1882, as it is forbidden by law and opposed to public policy.
Statutory provision(s):
- Indian Contract Act, 1872, Section 26
- Transfer of Property Act, 1882, Sections 11, 25, 31
- Limitation Act, 1963, Article 58
Varkey Varghese v. Kathreena, (Kerala) : Law Finder Doc id # 2898809
