Chapter VII of the Transfer of Property Act, 1882 covers the transfer of property by gift.
Section 122: Transfer of Property Act, 1882:
“Gift” defined
“Gift” is the transfer of certain existing movable 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.
Acceptance when to be made-
Such acceptance must be made during the lifetime of the donor and while he is still capable of giving.
If the donee dies before acceptance, the gift is void.
In Padma Chand v. Lakshmi Devi, 2010 (173) DLT 604 (Delhi) case the Court held that gift is a voluntary transfer of property without consideration and parting by the owner of the property without any pecuniary benefit.
In Vimala v. Narayanaswamy, 1996 AIHC 4170 Kar case, the Court held that where the deed is to take with immediate effect, the property to be transferred during the executant’s life, it would be a gift deed and not a will.
Essential Requisites of Gift:
Sec 122 of the Transfer of Property Act defines a gift which has the following essential requisites:-
- There should be a donor and a donee;
- There must be a transfer of ownership of a property from the donor to the donee;
- The property should be certain (capable of identification) and existing property. Thus there cannot be a gift of future property;
- The transfer should be voluntary;
- It shall be without consideration;
- It can be of movable or immovable property;
- In the case of immovable property, there must be either a registered instrument properly attested by at least two witnesses. In case of movable property either by a registered instrument properly attested or delivery of possession;
- The transfer should be accepted by the donee in his lifetime from the donor;
- The acceptance of the transfer by done must be during the lifetime of the donor and he must be still capable of giving;
- Thus during gift, both the donor and done should be living persons;
- In the event of the donor dies before acceptance, the gift is void.
Note:
- As consideration is absent, Gift is not a contract.
- It should be by free consent and must be voluntary.
- It becomes irrevocable once the deed of gift is delivered to the donee, even before its registration.
- Registration should be in accordance with the Indian Registration Act.
- Once the deed is executed and it is accepted during the lifetime of the donor, the deed of the gift may even be registered after the death of the donor.
- Unregistered deed of gift cannot be used under the doctrine of past performance.
In Commissioner of Income Tax v. Mayawati, 2011 (183) 617 case, the Court held that if all the above elements are fulfilled, there will be a valid gift, if not it will have no legal consequence.
Transfer by Gift:
Section 123: Transfer of Property Act, 1882:
Transfer how effected
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 effected either by a registered instrument signed as aforesaid or by delivery.
Such delivery may be made in the same way as goods sold may be delivered.
Gift of Immovable Property:
Sec 123 of the Transfer of Property Act makes a reference ‘to delivery’. This section deals with the mode of transfer in the case of gifts. It provides separate provisions for the gift of immovable and movable properties. With regard to gifts of immovable property, Sec 123 provides the transfer must be effected by a registered instrument signed by or on behalf of the donor and attested by at least two witnesses. Registration is compulsory in case of a gift of immovable property, whatever may be the value of the property. There is no mention that the deed should be registered by the donor himself.
No mention is made with regard to the delivery of possession. One of the prerequisites for registration is the transfer must be in writing and cannot be done orally. The registration must be completed in the manner prescribed by the Indian Registration Act, 1908.
In Ram Niwas Awasthy v. Narayan Prasad, 2007 (2) MPLJ 332 (335) (MP) case, the Court held that the question whether a document is a gift or not depends upon the language used in the document and from the perusal of entire document if it is gift then the provisions of Sections 122 and 123 shall apply.
In Sahadev Vs. Shekh Papa (1905)29 Bom. P.119 case, the Court held that gifts of immovable property are compulsorily registrable and it amounts to notice for a subsequent transfer and not for earlier transactions prior to registration.
In D.N.Dawar Vs. Ganga Ram Saran Dhama, AIR 1993 Del P.19 case the Court held that in case of a gift of immovable property if the document is not registered, mere delivery of possession cannot pass a title to the donee.
Gift of Movable Property:
With regard to movable property, the gifts can be effected either by a registered instrument signed as aforesaid (signed by the donor or on his behalf) or by delivery. Even in the case of movable property, registration is made optional when delivery of possession takes place. No delivery of possession is required when it is made through a registered document. Sec 123 provides that delivery may be made in the same manner as goods sold are made i.e., which the parties agree to constitute delivery or putting the goods in possession of the buyer.
Gifts Under Hindu Law:
In general, whatever is given in the Transfer of Property Act is applied to Hindus. A gift in Hindu law is not mandatory to be in writing. For a valid gift, it is required that there must be the delivery of physical possession from the donor to the donee.
- A Hindu person may dispose of his separate or self-acquired property by way of gift, subject in certain cases to the claims for maintenance of those who are legally bound to be maintained.
- A coparcener may dispose of his coparcenary interest by way of gift subject to the claims of those who are entitled to be maintained by him.
- A father may by way of gift dispose of the whole of his property, whether ancestral or self-acquired, subject to the claims of those who are entitled to be maintained by him.
- A female may dispose of her stridhana by way of gift, subject to the consent of her husband.
- A widow may in certain cases dispose of by way of gift a small portion of the property inherited by her from her husband, but she cannot do so by will.
- The owner of a joint property may dispose of that by way of the gift unless there is a special custom prohibiting alienation or the tenure is of such a nature that it cannot be alienated.
- In Hindu law, it is not allowed to make a gift in favor of an unborn persons.
In Deo Saran v. Deoki Bharthi, (1924) 3 Pat 842 case, the Court held that under Hindu Law the essential ingredients which constitute a gift, whether of movable or immovable property, are the Sankalpa and Samarpan whereby property is completely given away and the owner completely divests himself of the ownership in the property. The Court further observed that the Hindu Law of Gift has been expressly abrogated by Section 129 of the Transfer of Property Act, 1882.
In Srinivasa Padyachi v. Parvathiammal, AIR 1970 Md 113 case the Court held that a gift by a coparcener of his undivided share in a joint family property is void and does not bind even the alienor. But according to Mitakshara law prevailing in Madras, a coparcener has the power to alienate for value his undivided interest in the property without the consent of other coparceners.
Gifts Under Mohammadan Law:
The concept of gift is different in Muslim law than that given in the Transfer of Property Act. Here it is a transfer of property or right by one individual to another according to the Muslim law and it also includes
- A hiba, which is an immediate and unconditional transfer of the ownership of some property or of some right, without any consideration and
- An ariat, which means giving of some limited interest to someone in respect of the use or usufruct of some property or right.
- If a gift of any property or right is made without consideration and the object of such gift is to get religious merit, it is called sadaqah.
Under the Mohammadan Law, the essentials of a gift are
- a declaration of gift by the donor;
- acceptance of the gift by the donee;
- if possible, delivery of possession
The registered instrument is not necessary to validate the gift of immovable property. In Muslim law gift in favor 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 because in that case it is presumed that the child actually existed.
Types of Gifts:
Void Gifts
There are certain gifts which are declared void by the Act. These are –
- Gifts for an unlawful purpose which is unlawful as per the law of land (Section 6)
- Gifts which are made subject to a condition which is impossible to fulfill or re forbidden (Section 6)
- If the donee dies without acceptance of gift such gift is void. (Section 122)
- A gift made by a person who is incompetent in law, for example, idiot, minor, lunatic. (Section 7)
- A gift comprising existing and the future property is void as to the later (Section 124)
- A gift of a thing to two or more donees, of whom one does not accept it, is void as to the interest which he would have taken, had the accepted (Section 125)
- A gift which, under an agreement between the parties, is revocable, wholly or in part, at the mere will of the donor, is void wholly or in part as the case may be (Section 126)
Onerous Gifts
A gift may not always be of a beneficial character, but may at times burdened with an obligation. The said gift is known as an onerous gift. Section 127 of TPA talks about the onerous gift- it says that when a gift is in the form of a single transfer of several things to the same person of which one is burdened by an obligation, and the others are not, the donee can take nothing by the gift unless he fully accepts it. Where a gift is in the form of two or more than two separate and independent transfers to the same person of several things, the donee can accept one of them and can refuse the others, although the former one may be beneficial and the latter one may be onerous.
In this situation, only one thing is different, in single transfer either the whole transfer to be accepted or the whole transfer should be rejected. In case of separate transfer, liberty is given to reject one and to accept others.
An onerous Gift to Disqualified Person:
A donee who is not competent to contract even but still accepting property burdened by any obligation cannot be bound by his acceptance. But if he becomes competent to contract and then being aware of the obligation if he retains the property given, he becomes bound by acceptance.
Lifetime Gifts:
When the donor has the intention to deliver any gift to the donee during the lifetime period of the donor then that gift shall be considered as Lifetime Gifts. Lifetime Gifts are mainly given to the donee by the donor on the basis of some occasions like Birthday Party, Weeding Ceremony, etc.
Donatio Mortis Causa:
It means death bed gift. Deathbed gifts are future gifts which shall be expected to deliver to the donee after the death of the donor on the basis of intention made by the donor. When the donor is in critical condition and dies meanwhile if gift is made it is called death bed gift. It can be of immoveable/moveable property and it is valid only after the death of donor not before that.
Universal Donee:
A universal donee is one to whom all the properties of the donor have been given and he is liable for all the debts and liabilities of the donor at the time of the gift. The object of this is to protect the creditors of the donor.
Revocation or Suspension of Gifts:
A gift once made irrevocable except in the following two cases:
- A gift is revocable if donor and donee have agreed that on the happening of a specified event ( not depending upon the will of the donor), gift should be suspended or revoked.
- A gift can also be revoked in those cases in which a contract can be rescinded. For example, fraud, misrepresentation, etc.
- These rules do not, however, affect the rights of a transferee for consideration without notice.