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81. The expression ‘gift’ is defined in Section 122 of the Transfer of Property Act, 1882. The expression ‘settlement’ is defined in Section 2(24) of the Indian Stamp Act, 1899. Both the definitions are extracted hereunder for the purpose of clarity:-

                                          Gift                                         Settlement
                              Section 122 of the Transfer of           Section 2(24) of the Indian Stamp
                                   Property Act, 1882                             Act, 1899

82. There is an element of ‘gift’ in every ‘settlement’. However, there is a subtle difference between ‘gift’ and ‘settlement’. In the case of a ‘settlement’, there is an element of consideration, which need necessarily not be in monetary terms.

83. The definition of “settlement” in Section 2(24) of the Indian Stamp Act, 1899 can be understood as follows:-

105. Whenever a property is settled by the settlor in favour of the settlee, the settlee is expected to maintain either the settlor or any person who is dependent of the settlor. Otherwise, the settlor would have executed a gift deed.

106. Unlike in the case of a ‘gift' simpliciter, where there is no expectation and no consideration, a gift has merely to satisfy the requirements of Section 122 of the Transfer of Property Act, 1882. On the other hand, a ‘settlement’ under Section 2(24) of the Indian Stamp Act, 1899 contemplates a reciprocal obligation. It is implicit in a ‘settlement’ under Section 2(24) of the Indian Stamp Act, 1899 that it is for the purpose of distributing the property of the settlor among his family or those for whom he desires to provide or for the purpose of providing for some person dependent on him.

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112. Execution of a Settlement Deed implies an implicit obligation on the part of the settlee to maintain the settlor or such other persons as contemplated in the definition of ‘Settlement Deed’ in Section 2(24) of the Indian Stamp Act, 1899.

113. The underlying reason for settling a property is for the purpose of maintaining either the settlor himself or herself or a dependent of such a settlor. This is the definition of 'settlement' in Section 2(24) of the Indian Stamp Act, 1899. If the settlor has no other means for his or her own maintenance after a settlement is made, the failure to maintain such senior citizen would attract the sting under Section 23 of the Maintenance and Welfare of Parents and Senior Citizens Act, 2007, even in the absence of a clause to maintain the settlor(s) during his/her lifetime or their lifetime.