Colombo, Sri Lanka – 10 September 2026 – In a significant ruling handed down today, the Supreme Court of Sri Lanka has overturned the judgments of the District Court of Kegalle and the Civil Appellate High Court, firmly establishing that a deed, explicitly stating a transfer for valuable consideration, cannot be unilaterally revoked as a deed of gift, especially when oral evidence presented to contradict its terms is found to be inconsistent and unreliable.
The landmark decision, delivered by a bench comprising Justices Mahinda Samayawardhena, Menaka Wijesundera, and M. Sampath K. B. Wijeratne, provides crucial clarity on the admissibility of oral evidence under the Evidence Ordinance and the interpretation of property deeds in the context of Kandyan Law.
The Genesis of the Dispute: A Family Property Tussle
The case, titled Perammudi Arachchillage Rasika Nilmini Kumari v. Perammudi Arachchillage Nilantha Pushpa Kumara, originated in the District Court of Kegalle. The Plaintiff, Perammudi Arachchillage Rasika Nilmini Kumari, initiated a rei vindicatio action, seeking to evict her brother, the Defendant, Perammudi Arachchillage Nilantha Pushpa Kumara, and his family from a parcel of land.
The Plaintiff contended that she had transferred the land to her brother via Deed No. 96 on December 1, 2003, without monetary consideration, but with the expectation that he would provide future care and support. She asserted that this was, in essence, a Deed of Gift, which she subsequently revoked on July 23, 2012, through Deed of Revocation No. 153, citing the Defendant’s failure to fulfill his obligation. Consequently, she claimed to have re-acquired title to the land.
Conversely, the Defendant maintained that Deed No. 96 was an outright Deed of Transfer executed for valuable consideration and therefore could not be construed or revoked as a Deed of Gift.
Judicial Journey: From District Court to Supreme Court
Both the learned District Judge, in a judgment dated November 28, 2019, and subsequently the Civil Appellate High Court, affirmed the Plaintiff’s position. They held that the Plaintiff was entitled to revoke Deed No. 96 on the premise that no consideration had passed between the parties during its execution. Aggrieved by these concurrent findings, the Defendant sought leave to appeal to the Supreme Court.
Key Legal Questions Before the Apex Court
The Supreme Court was tasked with deliberating two principal questions of law:
- Have the Learned High Court Judges of the Civil Appellate High Court of the Sabaragamuwa Province Holden at Kegalle erred in admitting oral evidence to prove that a deed which purported to be a Transfer for Consideration was a Deed of Donation?
- Was the Learned District Judge correct in taking into consideration of the evidence of passing/not passing of the consideration between the parties in order to arrive at a conclusion as to the nature of Deed No. 96 to within the ambit of Section 2(a) of the Kandyan Law Declaration and Amendment Ordinance?
Supreme Court’s Meticulous Analysis and Verdict
Admissibility of Oral Evidence: A Clarification
Justice M. Sampath K. B. Wijeratne, authoring the judgment, first addressed the admissibility of oral evidence. The Defendant had argued that Section 92 of the Evidence Ordinance precluded oral evidence from varying the terms of a written instrument. However, the Supreme Court unequivocally affirmed that Proviso (1) to Section 92 provides a crucial exception. This proviso allows “any fact to be proved which would invalidate any document… such as… want or failure of consideration.”
Citing established precedents like Ananda Nimal Chandra De Silva vs Grace Advertising (Private) Limited and Nambuwasan vs Deonis Appu et al, the Court reiterated that it is always permissible to show that a contract lacked consideration or that consideration failed, even if the instrument explicitly states otherwise. Thus, the Court concluded that the District Judge and High Court did not err in admitting oral evidence for the limited purpose of proving a failure of consideration.
Scrutiny of Evidentiary Gaps and Inconsistencies
Despite confirming the admissibility of oral evidence, the Supreme Court proceeded to critically evaluate the evidence presented. Justice Wijeratne highlighted significant inconsistencies and credibility issues in the Plaintiff’s testimony and that of her witnesses. For instance, the Plaintiff contradicted herself regarding who constructed the house on the land and who bore the expenses. A witness’s affidavit was dismissed as inadmissible as the deponent was not cross-examined.
The Court noted that evidence indicated the Defendant also contributed financially to the house’s construction, challenging the Plaintiff’s claim of sole responsibility. Conflicting statements from witnesses further eroded the reliability of the oral testimony regarding the non-receipt of consideration.
Adequacy of Consideration: Beyond Judicial Scrutiny
A crucial point of departure from the lower courts’ reasoning was the Supreme Court’s stance on the adequacy of consideration. Both lower courts had considered that the alleged consideration (Rs. 75,000) was substantially lower than the land’s value. However, the Supreme Court underscored that, in the absence of circumstances warranting the doctrine of laesio enormis, the adequacy of consideration is generally not a matter for judicial inquiry. Parties are free to determine the consideration for their bargain, and courts should not substitute their assessment for a voluntary agreement, as expounded in treatises like C.G. Weeramantry’s “The Law of Contract.”
Weight of the Deed’s Operative Clause
Ultimately, in the face of unreliable and inconsistent oral evidence from both parties, the Supreme Court placed significant weight on the “most decisive and conclusive piece of evidence”: the impugned Deed No. 96 itself. The operative clause of the deed unequivocally stated that it was executed as a deed of transfer for valuable consideration. The Court emphasized that when a transaction is expressly recorded in a duly executed deed, its contents must be accorded due weight to ensure certainty and finality, unless specific exceptions under Section 92 Proviso (1) are clearly established by reliable evidence.
Finding no ambiguity in the deed’s operative part and considering the limitations of the oral evidence, the Supreme Court held that Deed No. 96 was indeed a deed of transfer executed for valuable consideration.
Conclusion: Appeal Allowed, Lower Judgments Set Aside
Based on the foregoing reasons, the Supreme Court concluded that Deed No. 96 was executed for valuable consideration and therefore does not constitute a deed of gift within the meaning of Section 2 of the Kandyan Law Declaration and Amendment Ordinance.
The Court thus answered the questions of law as follows:
- No, as per Proviso (1) of Section 92 of the Evidence Ordinance, oral evidence can be led to prove failure of consideration at the time of execution of a deed.
- No. Deed No. 96 is a deed of transfer, executed for monetary consideration and not a gift; therefore, it does not fall under Section 2(a) of the Kandyan Law Declaration and Amendment Ordinance.
Accordingly, the appeal was allowed, and the judgments of both the District Judge and the Civil Appellate High Court were set aside. The Supreme Court made no order as to costs.
This judgment reinforces the principle that while oral evidence can challenge the stated consideration in a deed, the courts will meticulously scrutinize its reliability, and in the absence of compelling evidence to the contrary, the clear terms of a duly executed deed will prevail, safeguarding the finality of property transactions.
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