Gifts

Section 122 of Transfer of Property Act defines a gift as the transfer of an existing moveable
or immovable property. Such transfers must be made voluntarily and without consideration.
The transferor is known as the donor and the transferee is called the donee. The gift must be
accepted by the donee. This Section defines a gift as a gratuitous transfer of ownership in
some property that is already existing. The definition includes the transfer of both immovable
and moveable property.

Parties to the transfer

Doner: the doner must be a competent person i.e; above the age of majority and be of sound
mind. He should have the capacity to contract and should also have the right to make the gift.

Donee: Donee does not need to be competent to contract. He may be any person in existence
at the date of making the gift. A gift made to an insane person, or a minor, or even to a child
existing in the mother’s womb is valid subject to its lawful acceptance by a competent person
on his/her behalf. 

Essentials:

1.Transfer of ownership
2.Existing property
3.Transfer without consideration
4.Voluntary transfer with free consent
5.Acceptance of the gift

Case law: gomti bai v mattulal -it was held by the Supreme Court that in the absence of
written instrument executed by the donor, attestation by two witnesses, registration of the
instrument and acceptance thereof by the donee, the gift of immovable property is
incomplete.

Onerous gift

Section 127 deals with onerous gifts. Onerous gifts refer to the gifts which are a liability
rather than an asset. The word ‘onerous’ means burdened. Thus, where the liabilities on a
property exceed the benefits of such property it is known as an onerous property. When the
gift of such a property is made it is known as an onerous gift, i.e., a non-beneficial gift. The
donee has the right to reject such gifts. 

Essentials: The donee must take the entire gift. If he accepts only to take those
which are without obligations, then the gift is void. But if the gift is in two or more
separate and distinct transactions, the donee may select at his liberty and refuse
those which are not beneficial to him.
Eg. : A gifts in one transaction, 200 shares of X & Co. a prosperous company
and also 100 shares of Y & Co. a company in difficulties. Heavy calls are
expected from Y & Co. A may take the entire gift. He is a onerous donee. He
cannot take the gift of the shares of X & Co. Only.

1
Universal Donee
  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
comprised therein.
The universal Donee is one to whom the donors  whole property is given and
who consequently become liable for all the debts due by and liabilities of the
donor at the time of the gift to the extent of property comprised in the gift.
Essential
   
   All the properties of Donor should have been transferred to the donee. In
order that a person maybe Universal Donee, all the properties both movable
and immovable of the donor must be given to him. Universal Donee is
personally liable for all the debts and liabilities of the doner at the time of the
gift to the extent of the property comprised therein. The object of section 123
is to protect the interest of the creditor, similar like section 53. for example
fraudulent transfer.

      In Universal Donee  under section 128 all the properties of the donor
should have been transferred to the donee. It has been held that even if the life
interest in the part of the property is retained by the donor, the donee  is
Universal donee . However if only all the immovable properties are
transferred the donor continue to hold movable , the donee cannot be called as
universal Donee. But if only the doner retain a small insignificant part of the
property, the donee will be treated as a universal Donee.