Gifts

Introduction

Gift is a Transfer of Property and is defined in Section 122 of the Transfer of

Property Act, 1882. It is a unique transfer of property in the sense that it involves
no consideration. The basic essence of a gift is the complete absence of
consideration Baby Ammal v. Rajan Asari, (1997). The law of gifts in India is
governed by Sections 122 to 129 of the Transfer of Property Act, 1882. The right to
gift away ones property whether movable or immovable is an important right and
an important element of property law. Although a gift involves no consideration in
the legal sense it involves the consideration of love, affection, spiritual and
religious benefit etc. whose importance cannot be overlooked.

Defination
Section 122- defines a Gift as
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.
In ordinary legal effect there cannot be a gift without a giving or taking. The giving
or taking are two contemporaneous, reciprocal acts, which constitute a gift. The
essential elements of a gift are: Balwant Singh v. Mehar Singh, 1974
1) Absence of Consideration
The concept of Gift is diametrically opposed to any presence of consideration or
compensation. The essence of a gift is that it is a gratuitous transfer. Blackstone
says Gifts are always gratuitous, grants are upon some consideration or
equivalent.

In Shakuntala v. State of Haryana the Supreme Court stated that it is one of the
essential requirements of a gift that it it should be made by the donor without
consideration. The word consideration has not been defined in the Transfer of
Property Act, 1882 but we have no doubt that it has been used in the Act in the
same sense as in the Indian Contract Act, 1872 and excludes natural love and
affection.

2) Donor
The donor is the person who gives. Any person who is sui juris can make a gift of his
property. A minor, being incompetent to contract is incompetent to transfer and a
gift by the minor would therefore be void. Trustees cannot make a gift out of trust
property unless authorized by the terms of the trust.

3) Donee
The donee is the person who accepts the gift. A gift may be accepted by or on
behalf of a person who is not competent to contract. A minor may therefore be a
donee but if the gift is onerous, the obligation cannot be enforced against him
while he is a minor. In Shri Ram Krishan Mission v. Dogar Singh dedication of
property by a Hindu to a dharmasala was held not to be a gift as the donee was not
a living person.

4) Subject Matter
The subject matter of the gift must be certain existing movable or immovable
property. It may be land, goods or actionable claims. It must be transferable under
Section 6 of the Transfer of Property Act, 1882. However it cannot be future
property. The release of a debt is not a gift as it does not involve a transfer of
property but is merely a renunciation of a right of action.

5) Acceptance
In order to constitute a valid gift the pivotal requirement is acceptance. No particular
mode of acceptance is required. Circumstances of the case will determine the mode
of acceptance. A transaction of gift in order to be complete must be accepted by the
donee during the lifetime of the donor. If the donor dies before acceptance the gift
becomes void.

6) Transfer - Section 123 states how the transfer of a gift is effected.

Mode of Transfer Immovable Property

A gift of immovable property, no matter what the value of the property, can only be
made by a registered instrument.
Signatures
The gift deed must be signed by or on behalf of the donor in order to effect transfer.
Merely the signature of the intended donee on the gift deed will not effect the
transfer.
Attestation
A gift deed must be attested by at least two witnesses and a gift deed not attested
by witnesses is void. The essential conditions of a valid attestation under Section 3
of the Transfer of Property Act, 1882 are that, two or more witnesses must have seen
the executant sign the instrument or have received from him personal knowledge of
his signature, and with a view to attest or to bear witness to this fact, each of them
has signed the instrument in the presence of the executant.
Revocation of Gift by Donor
The Privy Council has laid down that after delivery of the deed of gift and before
registration the donor cannot revoke the gift.
Mode of Transfer Movables
With regard to movable property this Section allows two alternative modes of
transfer viz. Registered deed signed by or on behalf of the donor and Delivery of
possession.
Delivery
In order that a gift is valid under this section the donor should have done all that he
can to put the subject matter of the gift within the power of the donee to obtain
possession. A valid gift must ordinarily be followed by possession. In Baby Ammal
v. Rajan Asari the court held that there must be proof of delivery and possession of
the gifted property. In the absence of such proof the deed cannot be construed to be
a gift deed.
Extent
This Section does not apply to territories excluded from the operation of the Indian
Registration Act, 1908.

# Section 124 states that a gift of future property is void. There cannot be a gift of
future property for such a gift can only be a promise and a promise not supported by
consideration is invalid as a contract. There cannot be a gift of future property either
under Hindu or Mohammedan law. In CIT v. R.S Gupta the court laid down that in
order to constitute a valid gift there must be existing property. In this case a gift was
given by instructing a non banking company, firm or Hindu Undivided Family in
which the donor had an account to give effect to the gift by debiting his account and
crediting the account in the name of the donee. It was held that mere entries in the
books of account would not constitute a valid gift unless the company, firm or Hindu
Undivided Family has sufficient cash in hand or overdraft facilities with any bank.
The court decided that on facts the gift in question was invalid in absence of cash
balance or overdraft facilities in the company.

# Section 125 - applies only when the gift is to two or more donees as tenants in
common. The refusal of one donee will not prevent the gift taking effect as regards
the share of the others.

# Section 126 - provides for conditions where a gift may be revoked.the following
are those conditions-

(1) That the donor and donee must have agreed that the gift shall be suspended or
revoked on the happening of a specified event;

(2) such event must be one which does not depend upon the donor's will;

(3) the donor and donee must have agreed to the condition at the time of accepting
the gift; and

(4) the condition should not be illegal, or immoral and should not be repugnant to the
estate created under the gift. Section 126 is controlled by sec. 10. As such, a clause in
the gift deed totally prohibiting alienation is void in view of the provisions contained in
sec. 10. A gift, which was not based on fraud, undue influence or misrepresentation
nor was an onerous one, cannot be cancelled unilaterally.

Such a gift deed can be cancelled only by resorting to legal remedy in a competent
court of law.

# Section 127 -Onerous Gifts. Onerous means burdened & Onerous gifts is a gift of such
property which is burdened.The effect of an onerous gift is that the donee is liable to
the extent of the gifted property in his hands to meet the obligation with which the
gift is burdened. This section grants a minor the right to repudiate an onerous gift
after attaining majority.

Ex- A shares in X, 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.

# Section 128 - a universal donee is a donee who receives the whole of the donors
property by way of gift.It is clear that the liability of the universal donee is to the
extent of the property acquired by him by virtue of the gift deed from the donor
however in reality Section 128 fastens the personal liability upon the universal
donee for all debts due by the donor at the time of the gift.

# Section 129 - excludes Mohammedan Law of gifts and gifts made in

contemplation of death from the purview of the law of gifts in the Transfer of
Property Act, 1882. This section is extremely controversial and its constitutionality
has been challenged. It has been discussed in greater detail later in this project.