“Gift” — “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 is dies before acceptance, the gift is void.
Subsequent requirements:
The subsequent requirements of section 122 of Transfer of Property Act are:
- The Doner must transfer ’property’ which is the subject matter of the gift, voluntarily and without consideration.
- The Donee must accept it during the life time of the donor or while donor’s competence to give exists.
- The mode of transfer by gift is prescribed under section 123 of the Act.
- No special mode of delivery of possession is specified. On the other hand, it is indicated that the delivery may be made in such a way, as the goods sold are delivered.
Distinction between Testamentary bequest and gift
A Testamentary bequest is revocable as the interest contemplated therein is intended to pass only after the lifetime of the testator, while a settlement of a gift, which comes into operation immediately is irrevocable. Even if the will contains a clause that it is not revocable the law makes it revocable, where as in gift or settlement if there is a clause that the settler or donor can revoke it, still it will remain irrevocable under the law, because the donee obtains his interest in the property on the execution of the document itself. Similarly the caption or nomenclature given by the parties to the transaction is again not decisive of the question as to whether it is a ‘will’ or a ‘gift’.
A Gift to be valid when accepted
A gift to be valid must have been accepted by the donee during the lifetime of the donor and while he is still capable of giving.
But under the Transfer of Property Act acceptance must be expressed or implied. Acceptance thus is an essential factor of validity of a gift and has to be proved or made out by the person relying on it.
GIFT-without Consideration
Section 122 of the Transfer of Property Act clearly postulates that a gift must have two essential characteristics, that
- it must be voluntarily and
- it should be without consideration.
This is apart from other ingredients like acceptance etc.
Transfer with consideration is not a gift
The word consideration used in section 122 of the Transfer of Property Act, 1882 is used in the same sense as the term is defined in the Indian Contact Act, 1872. Consideration means something which is of some value in the eye of law. It must be real and not illusory whether adequate or not, adequacy being a matter purely for the contracting parties to decide and agree upon. So long as consideration is not unreal, it is sufficient, if to be of slight value only where the transaction is made for some consideration, it does not constitute a gift but it is amount to an alienation for value.
Registration cannot dispense with delivery of possession
Registration cannot dispense with one of the essential requirement of a valid gift namely delivery of possession.
With regards to section 17 of the Registration Act of 1908, it is mandatory to register a gift deed with the sub- registrar in order for it to be valid. Conversely, section 123 of the Registration Act 1908 renders an unregistered gift deed as invalid.
Can a Gift Deed be revoked/canceled?
A gift once made and registered with due process of law cannot be revoked. After the acceptance, it becomes the property of the donee. The donor cannot independently revoke the deed. Also, in a deed where the parties have agreed that the deed shall be revocable in part or whole, by the mere will of the donor, is not a valid Gift Deed.
However, under Section 126 of the Transfer of Property Act, 1882 there are certain grounds when gifts can be revoked. The revocation in itself incorporates the cancellation of the Gift Deed and the possession of the property is returned to the donor. The grounds are –
- If there is an agreement between the donor and donee, that if certain specified events happen or do not happen, the gift shall be revoked. The point to note here is that the occurrence of such an event should not be controlled by the donor. And both parties must have agreed to such a condition in terms of the Gift Deed.
- The conditions stipulated should not be immoral, illegal or reprehensible to the property.
- In case of Thakur Raghunathjee Maharaj v. Ramesh Chandra, Hon’ble Supreme Court state that “even though a condition is not laid down in the Gift Deed itself, and has been provided under a mutual agreement separately but forms part of the transaction of the gift, the condition would be valid and enforceable”.
- Another instance, when a gift can be revoked is, if they violate Section 19 of the Indian Contract Act, 1872 which says “Where consent to an agreement is caused by coercion, undue influence, fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so obtained”.
So if the gift was made by obtaining consent on the above grounds it can be revoked. And in case, the donor dies, his heirs have the right to file for revocation of the deed.
Keep in mind that gift deed is not for the minors and Minors cannot be Donors. The minors cannot enter into the contract; hence, they cannot transfer a property to another person. However, the same law has a different proposition for donee in this context. If a donee is a minor, then his/her guardian on his behalf can accept the gift. The guardian will continue to follow the Procedure for Gift deed registration and adhering sole responsibilities being the owner of the property until the donee becomes an adult.
Case Law:- The law that it is not necessary for the validity of a deed of gift that it should be registered by the donor himself. In Bhabotosh vs. Soleiman reported in 33 Cal 584, a Hindu man executed a deed of gift in favour of his wife and died, and the deed was subsequently registered at the instance of the widow-donee. Validity of the deed of gift was challenged on the ground that it was registered subsequent to the death of the donor. The Court held that subsequent registration of a deed of gift after the death of the donor at the instance of the donee did not offend the provisions of Section 123 of the Transfer of Property Act. The post-mortem registration of a deed of gift by the legal representative of the donor has the same effect as its registration by the donor himself during his lifetime.
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