Clause In Settlement Deed Providing Daughter Will Lose Property Rights If She Marries Is Void And Against Public Policy: Kerala High Court

The Court was hearing a regular second appeal arising out of a suit for declaration and possession filed by a woman claiming rights over property settled in her favour by her father through a settlement deed executed in 1965.

The dispute centred around a clause in the settlement deed stating that if the plaintiff got married or became a nun, her rights over the property would stand extinguished and devolve upon her brother.

A Bench of Justice Easwaran S. observed: “When Section 4 and Section 25 of the Transfer of Property Act, 1882, are read in conjunction, it is beyond cavil that any condition incorporated in a deed of transfer which is forbidden in law or opposed to public policy is void and cannot take effect. Viewed in the above perspective, certainly the restrictive covenant in the settlement deed that the property will revert back to the son, if the plaintiff marries, cannot be upheld by the courts and is void, and the plaintiff is entitled to ignore the same”.

Further, while explaining the ratio laid by the High Court in Kamalakshan Vs Usha (2025), the Bench added: “In the above decision, this Court held that when absolute interest was not created under a deed, the provisions of Section 11 of the Transfer of Property Act, 1882, are not attracted. However, in the present case, the transfer in favour of the plaintiff cannot be termed as conditional. It is an absolute transfer. However, a further clause is incorporated that, if she becomes a nun or gets married, she will lose the interest in the property. When a condition of restraint is imposed in a deed which is otherwise prohibited under law, the said condition becomes void, and therefore, the transfer in favour of the plaintiff becomes absolute and not conditional”.

Advocates George Joseph (Ittankulangara) and M.A. Asif appeared for the parties.

Background

The plaintiff’s father executed a settlement deed in 1965 settling 10 cents of property in favour of the plaintiff. The plaintiff was granted rights over the B schedule property under the deed.

However, the deed incorporated a condition stating that if the plaintiff got married or became a nun, all her rights over the property would stand extinguished and would devolve upon the defendant, who was her brother.

The plaintiff subsequently got married in 1971 and later moved abroad. According to her case, she later discovered that the defendant had mutated the property in his name and was enjoying the property on the strength of the restrictive covenant contained in the settlement deed.

The suit for declaration was therefore instituted, contending that the clause disentitling her from enjoying the property upon marriage was void ab initio.

The trial court dismissed the suit, holding that the condition incorporated in the settlement deed was valid and that the suit was barred by limitation under Articles 58 and 113 of the Limitation Act, 1963.

In appeal, the Additional District Court reversed the judgment and decree, holding that the plaintiff was entitled to enjoy the property and that the restrictive condition in the settlement deed was void.

Court’s Observation

The High Court first rejected the defendant’s contention that mutation of the property in his favour defeated the plaintiff’s claim. The Court observed that mutation does not confer title over property and further noted that the defendant had failed to establish that mutation was effected after notice to the plaintiff.

The Court then examined whether the restrictive covenant in the settlement deed could legally survive. Referring to Section 26 of the Indian Contract Act, 1872, the Court observed that every agreement in restraint of marriage, other than in the case of a minor, is void.

The Bench further noted that Section 4 of the Transfer of Property Act, 1882, makes provisions of the Contract Act applicable to transfers governed by the Transfer of Property Act.

Referring to Section 25 of the Transfer of Property Act, the Court observed that a condition attached to the transfer of property becomes void if the condition is forbidden by law, defeats provisions of law or is opposed to public policy.

The Court observed that Section 4 and Section 25 of the Transfer of Property Act, 1882, read in conjunction, clarify beyond cavil that any condition incorporated in a deed of transfer which is forbidden in law or opposed to public policy is void and cannot take effect.

The Court also held that the same reasoning applied to the condition relating to the plaintiff becoming a nun. However, the Court noted that the said contingency had not occurred and therefore further deliberation on that aspect was unnecessary.

The High Court further examined Section 11 of the Transfer of Property Act dealing with restrictions repugnant to an absolute transfer. The Court observed that where an absolute interest is created in favour of a transferee, any subsequent condition restricting enjoyment of the property can be ignored by the transferee.

The appellant relied upon Kamalakshan v. Usha (2025) to contend that Section 11 would not apply where no absolute transfer was created. However, the Court distinguished the said judgment and held that the transfer in the present case was absolute in nature.

The Court observed that when a condition of restraint is imposed in a deed which is otherwise prohibited under law, the said condition becomes void and therefore, the transfer in favour of the plaintiff becomes absolute and not conditional.

The Court further held that the settlement deed could not be construed as a conditional transfer merely because it incorporated an offending restrictive covenant. The Bench observed: “If a settlement deed contains a clause which is forbidden by law and against public policy, the said clause becomes inoperative, and the donee is entitled to ignore the condition and take the property dehors the condition.”

The Court also rejected the appellant’s contention based on Section 31 of the Transfer of Property Act, holding that the provision had no application since the impugned condition itself was prohibited by law.

Conclusion

The Kerala High Court held that the restrictive covenant in the settlement deed disentitling the plaintiff from enjoying the property upon marriage was void in terms of Section 26 of the Indian Contract Act, 1872 and hit by Section 25 of the Transfer of Property Act, 1882.

The Court further held that the transfer in favour of the plaintiff was absolute in nature and that the plaintiff was entitled to ignore the offending condition contained in the settlement deed.

Accordingly, the Court dismissed the second appeal and affirmed the judgment of the First Appellate Court granting relief in favour of the plaintiff.

Cause Title: Varkey Verghese v. Kathreena (Neutral Citation: 2026:KER:28575)

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