Introduction
Gift is defined under Section 122 of the Transfer of Property Act as “the transfer of certain existing moveable or immovable property made voluntarily and without consideration by one person called the donor to another called the donee, and accepted by or on behalf of the donee.” The section further states that the acceptance of such gift must be made during the lifetime of the donor and while he is still capable of giving. If the donee dies before accepting the gift such gift would be void.
A gift is a transfer of property without any pecuniary consideration by one person in favour of another person and is accepted by him or by any other person on his behalf. This transfer is also called gratuitous transfer. It may take place between two living persons or may take place only after the death of the transferor. Therefore gift may be either inter vivos or testamentary. If it is inter vivos then it is a gratuitous transfer of ownership between two living persons and is a transfer of property incorporated in section 5 of Transfer of Property Act. If it is testamentary then it is called a “will” which is a transfer by operation of law and it does not come within the ambit of this Act as this Act only deals with transfers by act of the parties. A gift where both the donor and the donee are Muslims is governed by the provisions of Muslim law and not by the Transfer Of Property Act.
In Vimala v. Narayana Swamy, 1996, the court held that where the deed is to take with immediate effect the property which is to be transferred during the life of the executant, it would not be a will but a gift deed.
In Padma Chand v. Lakshmi Devi 2010, the Delhi High Court held that gift is a voluntary transfer of property without any pecuniary consideration and the property parts with the owner without any monetary benefit.
Essentials of a Gift
There must be a transfer of ownership
Just like in a case of sale there must be a transfer of all the rights in the property by the donor to the donee in case of gift also. However it is permitted by the act to make conditional gifts. The only requirement is that such condition must not be in contradiction to any of the provisions of section 10 to 34 of the Transfer Of Property Act.
The ownership must relate to a property in existence
A future property cannot be transferred. Gift must be made only of existing movable or immovable property which are capable of being transferred. A gift of property that is obtained after a preliminary decree of partition passed by the court is a valid gift. Gift of the share obtained after partition of the joint family property can also be gifted.
Transfer must be without consideration
Consideration refers to monetary consideration and it does not include love and affection. Even if the consideration is a nominal amount of money and the property is paradoxically undervalued even then the transfer would be a sale and not a gift.
Transfer must be made voluntarily
A gift should be given with the free consent of the donor and such consent should not be vitiated by force, fraud, or undue influence.
The donor must be competent to contract
The transferor who transfers the gift is called a donor. Donor must have attained the age of majority and should possess a sound mind and should not be otherwise disqualified to make a contract. Therefore a minor cannot make a gift of his own properties. Also, a person in fiduciary position, for example trustees, cannot make gifts of the property vested in them on behalf of others if they are not authorised to do so.
The transferee must accept the gift
The gift must be accepted by the donee himself. In case the donee is a minor, acceptance can be given by the donee himself or by his guardian. If the guardian accepts the gift on behalf of the minor then upon attaining majority the minor has the liberty to either accept the gift or reject the gift.
In case of Commissioner of Income-Tax v. Mayawati, 2011, it was held by the court that if the above elements are fulfilled then the gift would be valid otherwise it will have no legal consequence.
How the Transfer is Effected
Section 123 states that “For the purpose of making a gift of immovable property the transfer must be effected by a registered instrument signed by or on behalf of the donor and attested by at least two witnesses.
For the purpose of making a gift of movable property, the transfer may be affected either by a registered instrument signed as aforesaid or by delivery.”
Section 123 provides for the mode of transfer of gifts. It contains distinct provisions for the gift of immovable and movable properties. For immovable properties the section states that the transfer must be effected by registered instrument signed by or on behalf of the donor and attested by at least two witnesses. In case of immovable property registration is compulsory irrespective of the value of the property. It is nowhere mentioned in the section that the deed should be registered by the donor himself. The essential component for registration is that the transfer must be done in writing and cannot take place orally. The registration must take place in the manner provided by the Indian Registration Act 1908.
In case of Ramniwas Awasthi v. Narayan Prasad 2007, the Madhya Pradesh High Court held that the issue whether a document is a gift or not relies upon the language used in the document and if the perusal of the document points that it is a gift then the provisions of sections 122 and 123 of Transfer Of Property Act shall apply to the document.
In Sahadev v. Shekh Papa, 1905, the Bombay High Court held that it is mandatory to register the gift of immovable property and it would be held to be the notice for a subsequent transfer and not for any earlier transaction which took place before the registration.
In D. N. Dawar v. Ganga Ram Saran Dhama, 1993 the court held that if the document is not registered in case of a gift of immovable property then mere delivery of possession of the gift cannot pass the title of the gift to the donee.
Regarding the gift of immovable property the transfer can be effected by registered instrument signed by donor or on his behalf or by delivery. In case of movable property registration is optional once delivery of possession takes place. When the transfer is effected through a registered document then the delivery of possession is not required.
Suspension or revocation of Gifts
Section 126 states that “The donor and donee may agree that on the happening of any specified event which does not depend on the will of the donor a gift shall be suspended or revoked; but a gift which the parties agree shall be revocable wholly or in part at the mere will of the donor is void wholly or in part, as the case may be.
A gift can also be revoked in any of the case (save want or failure of consideration) in which if it were a contract it might be rescinded.
Save as aforesaid, a gift cannot be revoked.
Nothing contained in this section shall be deemed to affect the rights of transferees for consideration without notice.”
According to Section 126 the donor and a donee may agree that in the event of any contingency which does not depend on the will of the donor a gift shall be suspended or revoked. But a gift which the parties agree that it shall be revocable wholly or in part at the will of the donor, is considered to be void wholly or in part as the case may be.
Just like other transfers, gift can also be made subject to certain conditions. Donor may make a gift subject to its suspension or revocation. If a gift is made subject to certain conditions that it can be revoked in future then such conditions should be valid and enforceable under the provisions of those acts which regulate conditional transfers. Section 126 provides for two modes of revocation of gift:
- Revocation by mutual agreement of donor and donee
- Revocation by rescission as in the case of contracts
Revocation by mutual agreement
When the donor and the donee agree that the gift shall be suspended or revoked upon the happening of certain event which is not dependent on the will of the donor then such condition of revocation must be express and should not be merely in the form of a wish or a desire. The condition must be expressly laid down in the deed. In case of Mool Raj v. Jamma Devi, 1995, a gift of certain properties was executed in lieu of the past and future services to be rendered by the donee to the donor. The failure of donee to render services or to maintain the donor in future was not expressly laid down as a condition for the revocation of the gift deed. The Himachal Pradesh High Court held that since this condition was not expressly laid down in the deed it was an unconditional gift and it cannot be revoked by the donor upon a failure which has not been specified in the deed.
In Thakur Raghunathjee Maharaj v. Ramesh Chandra, 2001, the Supreme Court held that even if a condition is not expressly laid down in the gift deed itself but is specified under a mutual agreement separately and it forms a part of the transaction of gift then the condition would be valid and enforceable and upon the failure of fulfilment of such condition the gift can be revoked.
A gift at the will of the donor is not a gift. It is necessary that the stipulation for revocation and the gift both are made at the same time but it is not necessary that the stipulation of revocation is laid down in the deed of gift itself. There can be two separate documents but they must form part of the same transaction, thus the stipulation must be linked to the same gift which is to be revoked.
Condition for revocation of gift must be valid under the provisions of law laid down for conditional transfers. The condition which totally prohibits or alienates the property is void under section 10 of Transfer Of Property Act. In case of Jagdeo Singh v. Nandan Mahto 1982, the Patna High Court held that a gift which is made revocable with such conditions where the conditions are itself void then the gift is not revoked.
The condition subsequent must be in nature of a future event which is beyond the control of the donor. For instance A makes a gift of his property to B upon the condition that the gift shall be revoked in case B dies without any heir to his property. Here the condition is an uncertain future event which is not in the control of the donor. Hence if B dies without any heir, then the gift is revocable and A can get back his property.
Revocation by rescission as contracts
Gift is a transfer of property without consideration and is made voluntarily. If the gift is not made voluntarily and the consent of the donor is obtained by force or undue influence, then such gift must be revoked. If the preceding contract of the gift is itself rescinded or revoked then the transfer of gift becomes voidable at the option of the donor. This section deals with revocation which means rescission or repudiation of gift, it does not deal with cases where the gift is void. If the donor’s consent is obtained by coercion, undue influence, fraud or misrepresentation the donor has the option to revoke the gift. If he chooses not to exercise this option the gift will not be revoked. Gift can only be revoked by the donor on the above mentioned grounds and not by any other person on his behalf. However, the legal heirs of the donor may bring a civil suit for the revocation of gifts on any of these grounds after the death of the donor.
The period of limitation for the revocation of gift on the above mentioned grounds is three years from the date on which such facts came to the knowledge of the donor, as per the provisions of the Indian limitation act 1963.
In case of Sheel Arora v. Madan Mohan Bajaj, 2009, a gift deed was executed in favour of the donee. It was held by the Bombay High Court that a simultaneous claim by the donor that the gift deed was revoked unilaterally by him and lodged for registration was not valid as there was no participation by the donee.
In case of Ashokan v. Lakshmikuty, 2007, a father executed a gift deed in favour of his son out of natural love and affection and to provide him security in life. There was no evidence of coercion or undue influence. The donee lived out of India for long period of time. During that time the gift deed was with the donor and he kept paying the taxes on the property. No mutation took place for that period on the revenue records. The Apex court held that these circumstances were not sufficient to show that the execution of the gift deed was vitiated by undue influence. The deed could not be rescinded on the ground that the donee failed to fulfil the condition of financing the marriage of donee’s sister. The subsequent conduct of the donee cannot be a ground for the revocation of a valid gift.
Onerous Gifts
Section 127 states that “Where the gift is in the form of a single transfer to the same person of several things of which one is, and the others are not, burdened by an obligation, the donee can take nothing by the gift unless he accepts it fully.
Where a gift is in the form of two or more separate and independent transfers to the same person of several things, the donee is at liberty to accept one of them and refuse the others, although the former may be beneficial and the latter onerous.”
A gift which is not beneficial but is burdened with an obligation is an onerous gift. Section 127 talks about onerous gifts and states that when a gift is in the form of a single transfer of several things to the same person of which one of them is burdened by an obligation but the others are not, the donee cannot choose any of the gifts unless he accepts it fully. If a gift is in the form of two separate and independent transfers to the same donee, the donee can accept one of them and can reject the other even though one may be beneficial and the other may be onerous.
Thus, in case of single transfer either whole or nothing is to be accepted by the donee and in case of separate transfers the donee has the liberty to reject one set of transaction and accept another.
Onerous gift to disqualified person
The section further states that the donee who is not competent to contract but still accepts the gift which is burdened by any obligation cannot be bound by his acceptance. But when he becomes competent to contract and then he is aware of the obligation which rests upon him upon the retention of the gift given to him, then he becomes bound by the acceptance and he has to fulfil the obligation of the onerous gift.
Universal Donee
Universal donee is one who gets all the properties of the donor and he is liable for all the debts and liabilities of the donor at the time of the acceptance of such gift. The purpose of this section is to protect the creditors of the donor and to make the donee entitled not only to the benefits of the gift but also make him liable to fulfill his obligations as he steps in the shoes of the donor.
Donatio Mortis Causa
Donatio mortis causa means deathbed gift or gifts made in contemplation of the death. These are the future gifts which are expected to deliver to the donee after the death of the donor on the basis of intention formed by the donor on his deathbed. Such gift is valid only after the death of the donor and not before that.
Gifts under Hindu Law
Generally Transfer Of Property Act is applied to the Hindus. Gifts under Hindu law are not compulsorily to be in writing. Delivery of physical possession of gift from the donor to the donee is the requirement of a valid gift.
Hindu may dispose of his separate or self acquired property, or a coparcener may dispose off his coparcenary interest by way of gift, which may be subject to certain cases to the claims for maintenance of those who are legally entitled to be maintained by the donor.
A father may dispose of the whole of his ancestral or self acquired property by way of gift subject to the claims of maintenance by those who are thus entitled.
A female may dispose of her stridhan by way of gift subject to the consent of her husband.
Under Hindu law it is not allowed to make a gift in favour of an unborn child.
In case of Deo Saran v. Deoki Bharthi, 1924, the court held that the essential requirements of a gift under Hindu law both of movable or immovable property are the Sankalp and the Samarpan whereby property is completely given away and the owner relinquishes himself of the ownership in the property.
In case of Shrinivasa Padyachi v. Parvathiammal 1970, the court held that a gift given away by a coparcener of his undivided and non partitioned share in a joint family property is void and it does not bind anyone. But under the Mitakshara law, a coparcener has the right to alienate for value of his undivided share in the property without the consent of other coparceners.
Gifts under Muslim Law
The essential requirements of a gift under Muslim law are:
- Declaration of gift by the donor
- Acceptance of gift by the donee
- Delivery of possession, if possible
The concept of gift in Muslim law is not regulated by the Transfer of Property Act. The gifts under Muslim law includes:
- Hiba, which is an immediate and unconditional transfer of ownership of some property or of some right without any consideration.
- Ariat, which is giving of some limited interest to someone in respect of the use of some property or right.
- Sadaqah, which is the gift of any property or right made without consideration and object of such gift is to get religious merit.
The registration of gift is not necessary to give effect to the gift of immovable property. Gift in favour of a child in the womb of the mother is valid if the child is born within six months from the date of the gift as it is presumed that the child already existed at the date of the gift.
Conclusion
The concept of the gift is a traditional one which has developed more explicitly in property law. In olden days it was an informal giving of property and was governed by mostly the personal laws. With the evolution in the legal system, it has become more like a contract. To validate a gift it is important to maintain the rules and regulations which are provided in the act to avoid any kind of future dispute. The Transfer of Property Act contains very clear and elaborative provisions for the regulation of gifts in India.
