Relinquishment deed: Everything you need to know about it

[ecis2016.org] What is a relinquishment deed and how is it different from other instruments of property transfer? We examine…

What is a relinquishment deed?

Co-owners of a joint Hindu property can give up their right in the property by way of relinquishing their ownership through a relinquishment deed. A relinquishment deed is created and registered to enable the co-owners to legally transfer their share in the property to another co-owner.

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Relinquishment deed use

The need to create a relinquishment deed typically arises, when a property owner dies intestate, i.e., without a will and the legal heirs decide to give up their right in the said property in favour of a co-owner.

Let us consider an example:

Suppose that three sons inherit a large estate in their hometown, after the death of their father, who has not left a will. Two of the three sons work in different cities and find it cumbersome to manage the estate in their hometown. In this case, they may decide to transfer their rights in the name of the third brother, who resides close to the ancestral property. Let us assume that the two brothers decide to give up their right over the property, without any consideration. A deed of relinquishment would need to be drafted and registered, to formalise the process. Even if the two brothers took money for the transfer, a similar deed would be created to make the transfer legally valid.

However, one must carefully understand the legalities involved, to successfully create a relinquishment deed, which is also referred to as a release deed in legal parlance.

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When is a relinquishment deed created?

An owner can transfer his right in a property through various legal instruments, including sale, or gift or will. So, when does the need to create a relinquishment deed arise and how is it different from other modes of property transfer?

Transfer of rights in a property through a relinquishment deed is possible, only in cases of inherited properties. These would include all your ancestral properties, upon which you have a right by birth under the Hindu law and the self-acquired property of your father, in case he dies interstate.

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Who can create a relinquishment deed?

Only co-owners of a property can relinquish their share in the property. Also, they can relinquish their share only in favour of another co-owner.

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Should a relinquishment deed be registered?

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Section 17 (1) b of the Registration Act, 1908, provides that an instrument, using which a right is either created or transferred with respect to an immovable property, must be registered. Hence, a relinquishment deed must be registered, to give it legal validity. Section 49 of the Registration Act mandates that an unregistered document that must be registered, as prescribed under Section 17, should be inadmissible in a court of the law in case of a dispute. This was further stated in the ruling in the Telugu Kishna Mohan and Another versus Boggula Padmavathi and others case.

Relinquishment deed must be registered to have legal validity: Gujarat HC

The Gujarat High Court, on July 7, 2021, said that a document, under which the right on a property is to be relinquished, requires to be registered under the Registration Act. Unless the document is registered, the document cannot be treated as a relinquishment deed, the HC said. The order by the HC came on a petition, where one Roshanben Deraiya, who along with her sister Hasinaben Deraiya, had in August 2010 relinquished their rights to an agricultural land in Shihor village in Bhavnagar, owned by their father Hajibhai Deraiya. When the property was distributed among her three brothers after the demise of their father in October 2010, Roshanben challenged the move in 2016.

While setting aside the orders passed by the deputy collector, collector and the special secretary, revenue department (appeals), the HC said that the consent affidavit by the petitioner ‘Cannot be treated to be a relinquishment deed and therefore, the right of the petitioner on the basis of this document cannot be treated to have extinguished’.

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Relinquishment deed format

Here is a sample of relinquishment deed format for your reference.

This deed of relinquishment is made and executed on this ___day of ________ by ________________, ______(relationship) of Late _________________ and _________________, ____________ of Late ___________________,residents of _________________________________ _________________________________________________________, hereinafter called the EXECUTANTS/RELEASORS IN FAVOUR OF ________________, _______ (relationship) of Late ___________________ hereinafter called the Releasee.

Whereas the said late ____________ died intestate and without nominating any of his five children, the details of whom are provided below, as the legal heirs of his self-acquired property:

NOW THIS DEED WITNESSETH AS UNDER

The 4 executants/releasers hereby wish to release and relinquish their respective shares in the property in favour of _________________, _____ (relationship) of late ________________, without any monetary consideration, and hereby affirm and declare that they and their legal heirs shall have no right, claim or interest in the said property of late ________________. The sole right of the property same shall vest absolutely in the said _______________, __________(relationship) of Late ________________, the Releasee.

IN WITNESS WHEREOF the Executants/Releasers and the Releasee have signed this deed of relinquishment on this day, month and year first mentioned above in the presence of the following witnesses:

How to register a relinquishment deed

The parties concerned must follow this step-by-step process to register a relinquishment deed:

Step 1: Draft the content of the relinquishment deed on a stamp paper of Rs 100. Make sure every detail in the draft is correct and that there are absolutely no typing or spelling errors in the draft. The language of the draft must be such that the nature of the deal is quite clear, to all the parties concerned.

Step 2: Visit the sub-registrar’s office in the area concerned, along with every party involved in the transaction and with two witnesses. Everyone must carry the originals and photocopies of their identity proofs and address proofs, along with their passport-sized photos.

Step 3: A nominal fee ranging between Rs 100 and Rs 250 has to be paid, as the fee for registration of the relinquishment deed.

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Step 4: In case the official is satisfied with the nature of the deed, the document would be registered and a registered relinquishment deed will be created within a week. You can then visit the sub-registrar’s office and collect the papers.

What if one party isn’t able to visit the sub-registrar’s office?

If one of the applicants is unable to visit the sub-registrar’s office, because of terminal illness or any other disability, they can submit an application at the sub-registrar’s office, to send an official at home to complete the registration. Section 31 of the Registration Act authorises the registering officer to visit the premises of such a party.

Difference between relinquishment deed and gift deed

A gift deed is another way to transfer an owner’s property to another person. A gift deed is, however, different from a relinquishment deed on several grounds while some similarities also exist.

Beneficiary: The relinquishment of property can only be done in the name of a person who is a co-owner of the property. Through a gift deed, an owner can give up his right to anyone he chooses, irrespective of whether that person is a legal heir of that property or not.

Consideration: In case of a gift deed, the transferor does not take any money in lieu of giving up his right to the property. On the other hand, a relinquishment may be made for a consideration or even without it.

Registration and stamp duty: Under Section 123 of the Transfer of Property Act, registering gift deeds is also compulsory, just like release deeds. While registration of both the deeds is mandatory, for it to assume legality, the stamp duty charges on registering a gift deed are higher, as compared to a relinquishment deed.

Transfer to minor: A property can be gifted to a minor. Through a relinquishment deed, the property could also be transferred in favour of a minor. In such cases, the Indian Contract Act, 1872, will be applicable.

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Cancellation: A gift deed, as well as a relinquishment deed, become irrevocable after its execution.

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Can a relinquishment deed be revoked or challenged?

A registered relinquishment deed is irrevocable. The parties involved in this transaction cannot retract it, because of a change of heart or opinion at any later time.

Grounds for revocation of relinquishment deed

A co-owner who has transferred his right in the property, can revoke a release deed on certain specific grounds, including:

• If a fraud has been committed to dupe him.
• If he has been forced to or has been influenced to enter into the agreement.
• If his intention has been misinterpreted in the final document.

However, as all the parties involved in the signing of the deal must show cooperation in the process of cancellation, the aggrieved party will have to approach the civil court, in case the beneficiary refuses to give his consent to the cancellation.

Time limit for revocation of release deed

A relinquishment deed must be cancelled within three years from the date on which the right was conferred, under the provisions of the Limitation Act.

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