ut | Awards | Blog | NewsAlert | &s.vardhmaanegmailcom Search for Articles Q CONTRIBUTOR D ARTICLE India: Hiba Under Muslim Law 08 January 2024 by Dhavel Yussonl and Dhara lsh ‘Your Linkedin Connections GIFT UNDER INDIAN LAW Gift of property in Indias governed by The Transfer of Property Act, 1882 CTOPA". Section 122 defines "Gift _as the transfer of certain existing moveable or immoveable property made voluntary and without consideration, by ane person, called the donor, to another, called the donee, and accepted by or on behalf of the donee, Chapter Vllof the TOPA further lays down the law governing transfer of property by way of gt, Section 123 requires that transfer of immovable property by way of gift must be effected by a registered instrument signed by or on behalf ofthe donor, and attested by a least two witnesses. However, an exception is carved ‘ut in under Section 128 whieh inter aia clarifies that nothing in Chapter Vl shall be deemed to affect any rule ‘of Mahomedan law. Consequently, Section 129 excludes the rule of Mahomedan law from the purview of ‘Section 123 which mandates thatthe git of immovable property must be effected by a registered instrument. ‘Therefore, TOPA does not apply to gits made by Muslims in Inca GIFT UNDER MUSLIM PERSONAL LAW Agitt or Hiba' is defined a5 "a transfer of property, made immediately, and without any exchange,” by one person to anather, and accepted by or on behalf of the later, under Section 138 of The Principles of Mahermedan Law by Sir Dinshaw Fardunji Mull, 20th Edtion, While there are restrictions on testamentary ‘succession under Mahomedan law, 3 Hiba inter vivos, an be made by Mahomedans of both sects Le, Shias {and Sunnis. The donor is required o be af sound mind and not a minor and such gift need not bein writing ‘The three essentials ofa Hiba' Le. gift under Mahornedan Law, which make the if complete and irrevocable, _ recognized by the Supreme Court of Inca in the landmark judgment of Hafeeza Bibi and Ors, v, Far (Dea0) by L.Rs, and Ors, being (1) Declaration ofthe git by the Donor; (2) Acceptance ofthe git by the Donee; and (3) Delivery of possession To establish such declaration of ptt bythe Donor, it must be shown that the donor either in the presence of witnesses or otherwise made a public statement that he gifted the property in favour of the donee? Thus, the ‘donor is permitted to oraly gift property to donee, followed by delivery of the possession of property, which is required tobe accepted by the donee. To establish validity of agit. wring is not essential and the Supreme Court of India has laid down that merely because the gift is reduced to writing by a Mahomedan instead of having been made orally, such weting does not become a formal document or instrument of git Iehas been clariied by the Court thatthe view that when wiring s simukaneous with making of the gf i must be registered, I inappropriate ane notin conformity with the rule of gift in Mahomedan Law. The Apex Court approved the view taken by the Calcutta High Court inthe case of Nasib Al. Wajed AIP holding that a deed of git by Mahomedan isnot an instrument effecting, creating or making the gift buta mere piece of ‘eudence, Such writing Is nat a document of title Buta plece of evidence any. REGISTRATION AND STAMP DUTY RELATED CONCERNSSection 17(1) of the Registration Act, 1908 provides an instrument of git of immovable property requires regstration respective of value of the property. Section 49 provides that nor-regstrtion of documents hich are required to be reglstered will resultin such documents () not having ary effect on the immovable property comprised therein, i) confer any power to adopt r (lito be received in evidence of transaction affecting such property or conferring such power, unless ici registered. n the ratlo ofthe Hafeeza Bib Judgment, the Supreme Court has approved the view ofthe Gauhatl High Court regarding registration of such {lft n Md, Hlesabudain andl Ors, v. Ma Hesarualdin and Ors®, that a mere writing in the plain paper as ‘aforesaid containing the declaration of gift cannot tantamount toa formal instrument of git. Therefor, it cannot be held that because a declaration is contained inthe paper, the latter must have been registered in ‘order to render te git valid, The Court has also cted the judgments ofthe Division Bench of Caleuta High ‘Court in Nasib Al v. Wajed Af’ and VAR. Krishna Wer, of Kerala High Court in Makku Rather's Children: ‘Assan Ravther and Ors. v. Manahapara Charayt, to concur the finding that a deed of git executed by a Mahemnedan is not the instrument effecting, creating or making te gift but a mere piece of evidence. Under Section 17 of the Registration Act, 1908, an instrument of git must be registered. However, document ‘executed by does not transfer an immovable property from the donor tothe donee. I only affords evidence lof the fac thatthe donor has abserved the formalities under the Mahomedan law in making the git tothe ‘donee. ‘The question of whether stamp duty is payable on such 2 document recording the git n the above context, is ‘complex. Recently this question was deste with by the High Court of Allahabad in the January, 2023 judgment ‘of Star Paper Mils Ltd. Vs. Anisa Begum & Ors, wherein the defendant made an application asking the tial coureta impound the document fled by 3 chird paryclsiming the suit property, being a memorandum of oral ait, meant to serve as a record ofthe antecedent Hiba, The objection prefered by the defendant was that the document was unregistered and insufficiently stamped and is required to be impounded under Section 33 of ‘the indlan Stamp Act, 1899 and the amended detnition of an instrument of git under Section 2 (14-8) applicable tothe State of U.P. under U.P, Amendment Ac No. 38 of 2001. The trial judge by an impugned ‘order rejected the application, following which revision was instituted by the defendant before the High Court, ‘The Issue before that High Coure was whether the document is required to be taxed to stamp duty or itcan be received in evidence, without any stamp duty being paid thereon, or even if insufficiently stamped? The memorandum of oral git was made after enforcement of the U.P. Amendment Act No. 38 of 2001, which Is 25 follows 2 In section 2 of the indian Stamp Act, 1899, hereinafter referred to as the principal Act (a) for subsection (14), the following sub-section shal be substituted namely: "114) nstrument’- instrument includes every document and record created or maintained in or by an electronic storage and retrieval device or media by which any right or labiliy s, or purports to be, created, transferred, limited, extended, extinguished or recorded,” (0) atter sub-section (14), the folowing subsection shall be inserted, nammely= "114A) tostrument of Git’ Instrument of Git'includes an instrument whether by way of declaration or otherwise, for making or accepting an oral gif." ‘The Court took the view that as Section 2 (14) of che U.P. State Amendment has defined an instrument of Ai, which the Indian Stamp Act, 1899 does not. The Court noted thatthe definition of an instrument of gift in Section 2(14-A) isan inclusive definition and expressly says that t includes an instrument of gift whether by \way of declaration or otherwise, for making or accepting an oral gift, The express words employed by the ‘Amendment extend the sweep of the Actto cover not only those instruments af git that by themselves convey the property donated, but also include declarations of gts made or acceptes orally. Consequently, the Court held that this being the substantive law relating to dspositlon by gift ane glven the terms of the UP State Amendment under Section 2(14-) of the Indian Stamp Act of 1899, there isnot the slightest doubt that ‘ater enforcement ofthe State Amendment, a memorandum of ora gt recording an antecedent transaction ‘of Hiba, howsoever described and in whatever kind of words couched, i taxable to stamp duty as an instrument of gif. Consequently, the revision petition was allowed, Bearing in mind the above ruling in Anisa Begum's'® matter, the effect of Section 2 (la of the Maharashtra ‘Stamp Act, 1958 which defines instrument of git would be similar. The definition is as follows: a) nstrument of Git'- Instrument of git includes, where the git ls of any movable or immovable property buchas not been made in writing. any instrument recording whether by Way of declaration or otherwise the ‘making or acceptance of such oral git’ Consequently, the Maharashtra Stamp Act, 1958 makes it clear that any instrument by way of declaration of ‘otherwise recording making or acceptance of an oral git ill also be taxable to stamp duty and that starnp ‘duty would be attracted on a declaration of oral git whichis made in writing. In terms of Article 34 of Schedule 1 ofthe Maharashtra Stamp Act, 1958, stamp duty on git isthe same duty asf lewable on a ‘conveyance under clause (a, (b),oF (asthe case may be, of Article 25, on the market value of the property whichis the subject matter ofthe gift. ‘OUR RECOMMENDATIONFor effectively making a valid git under Mahomedan law, we recommens that a declaration of the gift by the donor should be made in the presence of witness), The donor, donee and the witness(s) may jointly execute before the notary @ Declaration of Oral Gift or Hiba to declare and pur ton record that atthe specied time and place, inthe presence of the witness(s) 1. The donor in pursuance of his intention to git, has made an oral gift or hiba of the property in favour of the donee: 2. The donee has accepted such git from donor; 3. The donor has handed over possession of property to donee; and ‘4. The donor has handed over possession of origina le dacuments of the property to donee. Tes advised that the Parties should make payment of applicable stamp duty on giftas per the relevant stamp {act ofthe State, on such Declaration of Oral Gift Hiba, co avold impounding for non-payment of stamp duty _as was the case In Anisa Begurn's matter. Registration of such Declaration of Oral Git or Hiba's not needed, Footnotes 2 Section 10, Page 158 The rng of Mahornedn aw by Si Dinehow Fardun Mall, 20m Eston “Supra Note supra Note The content ofthis article i intended to provide a general guide tothe subject matter. Specialist advice should be sought about your speci circumstances. AUTHOR'S) Dhaval usson Dharanajosht e e ‘About | log | ContactUs | Contibuors | fenchack | eeNewsAlets | TACs | Unsubscribe | Prvacy Statement