Introduction
A gift is generally a transfer of ownership or a right in the property without any consideration (monetary value). It is always given gratuitously. Transfer of Property Act, 1882 specifies the various provisions relating to gifts. Section 122 to Section 129 specifically deals with the gifts. These provisions tell us about the various essentials needed to be fulfilled for a valid gift, laws relating to transfer of immovable and movable property, various types of gifts etc.
Definition of Gift
Section 122 of Transfer of Property Act, 1882 defines gift. It says that-
“Gift is the transfer of certain existing moveable or immoveable 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.
Thus, gift is the transfer of the property by the donor to donee without any consideration where the consent of the donor must be given voluntarily.
Ingredients
- Parties –
There are two parties in the definition that is the donor and done. “Donor” is the person who forms the gift. He must be competent to contract which means that he must be a major and of sound mind. He also should have the full authority to transfer the property which he is giving as a gift.
“Donee” is the person for whose benefit the gift is made. He can be a minor and can have an unsound mind. What is necessary is that he should be an ascertainable person. Donee must accept the gift to make it valid.
- Existing moveable or immovable property–
This means that the property must be in existence at the when the gift is made. Thus, gift cannot be made of a future property.
For e.g. A want to gift a property to B which he will get after the death of his father. Now in this case the A cannot gift the property to B until his father dies because it is in future when A will become the owner of property but not presently.
- Free consent–
This means that the gift must have been made voluntarily by the donor without any fraud, undue influence etc. The intention of the parties matters a lot in this case where both should have the same intention. Gift without a free consent is voidable at the instance of the party against whose consent the gift is made.
In the case of Krishna Prasad v. Gopal Prasad[1], property was gifted by the women of 60 years of age to his grandson without giving it to his son. Due to this, the son filed the case that the property wasn’t gifted with the free consent and there was a case of fraud. However, the court observed that even if the woman was old still she retained her intelligence and the gift was valid as she was capable of understanding her actions.
- Without consideration–
Gift must be made without any consideration of any kind. Even a small amount of the consideration would convert a gift into a sale. So, it is necessary that nothing should be taken in return of the transfer.
- Acceptance by the donee–
Gift must be accepted by the done. Where the donee is a minor then the gift can be accepted by his guardian. Then it is in the hands of the donee either to accept the gift or to reject when he attains majority.
In the case of Tirath v. Manmohan Singh[2], it was observed that delivery of possession of the property cannot be taken into consideration while determining whether the acceptance has been given by donee or not. There can be cases where possession is shared jointly by both the parties and still there can be acceptance.
Further, Section 122 specifies that the acceptance must be made during the lifetime of the donor and while he is still capable of giving it. If the donee dies before the acceptance, the gift will become void. For e.g. if A gifted a property to B but A died before the B gave his acceptance to the gift then transfer cannot take place. Similarly, if B died before his acceptance the gift will be declared void.
Immovable Property
Section 123 so clearly specifies that a transfer of an immovable property can only be affected by a registered instrument which should be signedby the donor or by his agent and it should be attested by the two witnesses. So, the transfer cannot take orally. While attesting as well the intention of the witness plays a crucial role and they must always attest with a clear intention and they must be competent to do that.
In the case of Kalyanasundaram v. Karuppa[3], it was observed that the registration of gifts can even take place after the death of the donor.
Movable Property
In the case of moveable property, the transfer can be affected by both the ways that are through a registered instrument as well as with the delivery of the property. So, when the goods are put in possession of the donee the gift would be complete where the delivery can be made in the same way as the goods are being sold. So, in the case of moveable property two options are given and the donor can select any way to transfer.
Gift of Existing and Future Property
Section 124 of The Transfer of Property Act, 1882 specifies that-
“A gift comprising both existing and future property is void as to the latter.”
This means that a property cannot consist of both existing and future property.
For e.g. A gifts B two properties in which in one of which he is presently the owner and for the other property it is the property of joint family. So, in this case one of the property is of the joint family cannot be gifted and it can only be gifted once the property is being partitioned in future. A gift is void.
Gifts to Several of whom one does not affect
Section 125 of Transfer of Property Act, 1882 specifies that-
“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 he accepted.”
This involves the case where the gift is made for more than one person, then it is not necessary that all the persons should accept the gift. Even if one person does not accept the gift it would still be valid to all those persons who accepted the gift for their portion and would be void for only that portion that the person who didn’t accept would have taken.
For e.g. A gives a property to B, C, D in equal portion. D didn’t accept the gift of his one-third share. Now the gift will be valid for B and C for their two-third share and gift would only be void for one-third share which D rejected.
When Gifts may be Suspended or Revoked
Section 126 of Transfer of Property Act, 1882 specifies 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 may also be revoked in any of the cases (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.
So, this contains the case where a condition may be put by the donor along with the condition where if the condition is fulfilled then the gift can be transferred validly but if the condition is not fulfilled then the gift can be revoked or suspended. However, the condition laid by the donor must be out of his control which means that donor doesn’t have any control on the condition getting fulfilled or not getting fulfilled. Condition must be independent of the donor’s will. Gift will be void if the donor has control of the condition.
For e.g. A gifted a property to B with a condition that if a certain ship returns on a certain date then gift would be valid whereas if the ship doesn’t return on that date then the gift can be revoked. Now in this case the returning of the ship is not in the control of A and is not dependent upon his will. Thus, this condition is valid.
In another case A gifted a property to B on a condition that if A marries before a certain date then the gift would be valid whereas if he doesn’t marry till that date then the gift can be revoked. Now in this case the marriage of A is in his control. He can marry anytime whenever he wants. Thus, the condition is under the control of A. In this case the gift will be void.
In the case of Somashekarrao v. K.S. Mishra[4], There are two types of conditions that can be placed. One is condition precedent which takes place before the transfer of the gift and the other is condition subsequent which is placed after the transfer of the gift. If the condition subsequently is not fulfilled then the gift will revert back to the donor.
Rights of Transferee without Notice
Further this section specifies that the rights of the transferee for consideration are not affected if he doesn’t have the knowledge of the condition. Which means that even if the condition is valid and it also gets fulfilled even then also the gift cannot be revoked.
For e.g. A gifts property to B with a condition that if B dies before the certain date then the gift can be revoked. Then afterwards B transferees the gifted property to C for consideration without telling him about the condition. Then if B dies before the fixed date then also the gift cannot be revoked.
Onerous Gifts
Section 127 of The Transfer of Property Act, 1882 specifies that-
“Where a 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.
Onerous gift to disqualified person- A donee not competent to contract and accepting property burdened by any obligation is not bound by his acceptance. But if, after becoming competent to contract and being aware of the obligation, he retains the property given, he becomes so bound.
This section is based on the rule that if a person accepts a gift then he must accept it in totality. This means that he must accept the gift along with all the benefits and liabilities. A person cannot just accept the benefit and reject the liability. He has to accept the gift along with the liability attached with its benefits.
Exceptions
This rule has an exception which includes the case of several and independent transfers to the same person of several things. This includes the case where different transfers are made where one transfer may have benefit whereas the other has liability and both are independent of each other. In this case the person has the benefit to accept the gift with and reject the one with liability.
Liability of Disqualified Person
Further, the section specifies that if the person who is not competent to contract that is he is of unsound mind or a minor then he would not be bound by the obligation. However, if in the future the person becomes competent to contract and then also he accepts the gift then he would be bound by the obligation.
Section 128 of Transfer of Property Act, 1882 specifies that-
“Subject to the provisions of Section 127, where a gift consists of the donor’s whole property, the donee is personally liable for all the debts due by and liabilities of the donor at the time of the gift to the extent of the property comprising therein.”
This section tells us that when a person gifts the whole of his property then the donee will be personally liable to all the liabilities attached to the property up to the extent of the property which he got.
For e.g. A gifts his whole property of Rs.1 crore to B to which the liabilities attached are of Rs.2 crore. Then in this case B would be liable personally to pay the liabilities up to Rs.1 crore only and not above that because the property he got as a gift was of that value.
In the case of Anirudh Kumar v. Lachmi Chand[5], Donee can only be personally liable when the whole of the property is transferred and the benefit of this section cannot be taken in case where the donor retains even a small part of the property. It is necessary that the whole of the property is to be transferred.
Saving of Donation Mortis Causa and Mohammedan Law
Section 129 of Transfer of Property Act, 1882 specifies that-
“Nothing in this Chapter relates to gifts of moveable property made in contemplation of death, or shall be deemed to affect any rule of Mohammedan law.”
This involves the case where a person has illness where there is immediate apprehension of death then he can transfer his property which can be in the form of will to any person. The property transferred can only be a moveable property which means that immoveable property cannot be transferred. Now this involves three situations that can take place-
- Donor dies– The property goes to donee.
- Donor recovers – If the donor doesn’t die then the property will be back with the donor and the donee will not get the property. Gifts would become void.
- Donee dies before the donor– in this case the property will revert back to the donor. In this case also the gift would become void.
The delivery of the property is necessary to the donee to complete the transaction.
Gifts under Mohammedan Law
Gifts under Mohammedan law are different from the Transfer of Property Act as delivery of possession is enough in case of this law. There are different kinds of gifts under this-
- A Hiba, is an unconditional transfer of the property which takes place immediately without any consideration or with some return.
- An Ariat, in this only a limited interest in the property is transferred.
Essentials need to be fulfilled-
- There must be a declaration.
- Then acceptance has to be made by the donee.
- Then comes the delivery of the possession of the property.
Conclusion
By analysing all the provisions, we can observe that various essentials need to be fulfilled while making a gift such as the voluntary consent of the donor, acceptance by donee, the existence of property etc. We observed that provisions for transfer of immovable and moveable property are also different. We also discussed the various kinds of gifts and the liabilities and their extent that can be attached with the gifts. Various conditions can be put along with the gift provided that certain requirements need to be fulfilled which can lead to the revocation or suspension of gifts. Finally, we also discussed about the gifts under the Muslim laws and how they are different in certain prospects as compared with the Transfer of Property Act.
References
- https://thefactfactor.com/facts/law/civil_law/topa/gift/3825/
- https://www.lawyersnjurists.com/article/discuss-the-concept-of-gift-under-the-transfer-of-property-act/
- http://www.legalserviceindia.com/articles/transfer.htm
- https://www.lawweb.in/2018/06/notes-on-gift.html
- Dr. Poonam Pradhan Saxena , Property Law, Lexis Nexis, 3rd Edition, 2017
[1] AIR 2001 Pat 1, 2000(48) BLJR 1834
[2] AIR 1981 P H 174
[3] AIR 1925 PC 42
[4] AIR 1944 Nag.185
[5] AIR 1928 All 500
