Transfer of Property

Act

Section 127 of the said Act {Onerous Gift}

 Introduction

"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. 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.

The definition of the word ‘onerous’ as given in the Oxford dictionary1 is as follows:

 Burdensome, Entailing obligations that exceed advantages

Onerous Gift

'Onerous gift' is a gift made subject to certain charges imposed by the donor on the donee.
The principle behind this is that he who accepts the benefit of a transaction must also accept
the burden of the same. For acceptance of an onerous gift, acceptance of the gift itself is
sufficient; there need not be any separate and express acceptance of the onerous condition
also at the same time. The acceptance of the gift will carry with it the acceptance of the
onerous condition also, even though at the time of the gift the donee was not aware of such
condition, specially where the onerous condition is of a trifling nature (payment of Rs. 5 as
monthly maintenance to a certain person for life). 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.

1
www.oxforddictionaries.com/definition/onerous
As per the Transfer of Property act, 1882

Section 127. -Onerous gifts, 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. Illustrations

(a) A has shares in X, a prosperous joint stock company, and also shares in Y, a joint stock
company in difficulties. Heavy calls are expected in respect of the shares in Y. A gives B all his
shares in joint stock companies. B refuses to accept the shares in Y. He cannot take the shares in
X.

(b) A, having a lease for a term of years of a house at a rent which he and his representatives are
bound to pay during the term, and which is more than the house can be let for, gives to B the
lease, and also, as a separate and independent transaction, a sum of money. B refuses to accept
the lease. He does not by this refusal forfeit the money.

Explanation:
A gift is said to be onerous when it is accompanied with a burden or obligation. This section is
based on the maxim “qui sentit commodum sentire debetet onus” which means that he who
receives advantage must also bear the burden.
First paragraph of section 127 provides 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. Here, the following elements
are essential:-

(1) The gift must be in the form of a single transfer;

(2) To the same person;
(3) Of several things (properties);
(4) Of such thing only one is burdened with obligation and others are not.

When such conditions are present, the done will have to accept the gift fully. He cannot accept
the benefits of gift only and reject the burdens or obligation. This provision provides that the
done may either accept the full gift or reject that, partial acceptance is not allowed.

Second paragraph provides that 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.
Thus, if a gift is made in the form of two or more independent gifts to the same person, the done
may accept the beneficial one and reject the onerous property. Here, the gifts are separate and
do not form the part of the same transaction. The done is not bound to accept both the gifts.

Disqualified Donee

Section 127 provides that a done 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.

When an onerous gift is made to an incompetent or disqualified done, for example, a minor, he
has a right to reject or repudiate the gift on attaining competency i.e., majority. Incompetent
person is not bound by the acceptance of the gift after attaining competency. He has to exercise
his option immediately because if after becoming competent to contract and being aware of the
obligation he retains the property given to him, he becomes bound by the obligation.