Consideration Need Not Be Monetary: Supreme Court Upholds Validity of Settlement Deed with Obligations of Care and Charity
In Ramachandra Reddy (Dead) Thr. LRs & Ors. v. Ramulu Ammal (Dead) Thr. LRs, the Supreme Court upheld a property transfer based on a settlement deed requiring the transferee to care for the transferors and perform charitable work. A bench of Justices C.T. Ravikumar and Sanjay Karol held that "consideration" need not always be monetary and can include non-monetary obligations like care and charity.
The case involved a 1963 settlement deed granting Govindammal 2/3rd of a coparcenary property in exchange for taking care of the transferors and continuing their charitable activities. The respondents argued that such conditions did not qualify as consideration, treating the deed as a gift. However, the Court ruled that the deed constituted a valid settlement based on family obligations.
Overturning the Madras High Court's decision, which had treated the deed as a gift and altered the property division, the Supreme Court restored the trial and appellate courts' findings. The Court emphasized that the High Court erred by narrowly interpreting "consideration" and failing to meet the criteria for overturning concurrent findings, as laid out in Santosh Hazari v. Purushottam Tiwari (2001). The appeal was allowed, reaffirming Govindammal's (now her legal representatives') 2/3rd property share.