GIFT

SYNOPSIS

1. Introduction
2. Meaning of gift
3. Essentials of gift
4. Gift under Transfer of property Act
5. Kinds of gift
6. Law pertaining to gift under Muslim law
7. Position regarding gift under Hindu law
8. Gift to unborn person
9. Suspension or revocation of gift
10. Conclusion

 

 

Introduction

Gift is an act by which a person give something to someone without money or any other monetary benefit. This act is voluntary and without consideration by one person in favor of other person. This act may be done due to love, affection or gesture. It is valid in the eye of law.

Meaning of gift

Gift is a voluntary transfer of property or any interest in property by one individual to other individual which is a gratuitous transfer. The person who made this transfer is called the donor and the person in whose favor such transfer is made called the done.

There must be three things in the act to become a transfer called as gift- delivery (which should be of a movable or immovable property or a thing), donating intent (intention to donate the particular property), and acceptance (donated property must be accepted by the person to whom it is donated).

Such transfer of property in the form of gift must be done voluntarily without any undue influence, fraud, coercion or any compulsion. Only then such transfer will be valid and legal. If anywhere it is found that the gift was made under coercion or donor was defrauded by done such gift may be revoked by court in particular circumstances.

 

 

Essentials of gift

Following are some essentials of a valid gift-

• Donor and donee – two persons are required in any such transfer of property. One who transfers called the donor and the other one who accepts or receives called the donee. It is mandatory that both the parties must be alive at the time of making gift.

 

• Transfer of ownership – while making gift there is always a transfer of ownership by one person (donor) in favor of other (donee) on any property. By such way right is created on the gift property. Certain conditions are permissible to be made while creating such right.

 

 

• Existence of property – for making gift or creating right over property it may be moveable or immovable property. It is important that it must be in existence at the time of transfer. A future property cannot be transferred by way of gift.

 

• No consideration – it is exception to the consideration. Gift is always made due to love or natural affection. There can be spiritual or moral benefit but no monetary benefit can be there in such transfer.

 

 

• Voluntarily – gift must be made voluntarily. Free consent is an important factor in such transfer. Free consent is only called when a person is having absolute right over his action without any pressure, coercion, influence or his action is not due to fraud.

 

• Acceptance by donee – a gift will always be completed only when it is accepted by the person in whose favor gift is made. Until and unless it is accepted by donee it cannot be called as a gift as the essential condition is not fulfilled for a valid gift.

 

Gift under Transfer of property Act[i]

Section 122 of Transfer of Property Act 1882 defines Gift – as the transfer of certain existing moveable or immoveable property by one person, called the donor, to another called the donee, made voluntarily without consideration, and accepted by or on behalf of the donee.

When the acceptance of gift to be made – Such acceptance of gift must be made during the lifetime of the donor and while he is still capable of giving.

If the donee dies before acceptance gift is void.

In a case, P. Jayaramaiah v. Aragonda Munemma[ii]  it was held that gift deed was executed by defendant in favor of plaintiff with respect of property of her deceased husband. Defendant was not legally wedded wife of deceased husband. She being concubine was not entitled to inherit such property hence gift deed by her is not valid.

 

Section 123 of Transfer of Property Act talks about the modes of making gift;

Transfer How effected– for the purpose of making gift of immoveable property, the transfer must be effected by a registered instrument signed by or on behalf of the donor, and attested by at least two witnesses.

For the purpose of making a gift of moveable property, the transfer may be effected either by a registered instrument signed as aforesaid or by delivery.

In nutshell it can be said that there can be two mode of making a gift–

1. Gift of immoveable property- must be through registered instrument and must be signed by two witnesses.
2. Gift of moveable property- registration is optional but delivery of possession is required.

 

Kinds of gift

• Void Gifts
• Onerous Gifts
• Universal Donee
• Donatio Mortis Causa

 

Ø Void Gifts

There are certain gifts which are declared void by the law. These are –

• Gifts for unlawful purpose which is not lawful as per the law of land.
• Gifts which are made subject to condition which is impossible to fulfill.
• If donee dies without acceptance of gift such gift is void.
• Gift made by a person who is incompetent in law for example, idiot, minor, lunatic.

 

Ø Onerous Gifts

Section 127 of TPA talks about such gift-  it says that when a gift is in the form of a single transfer of several things to the same person of which one is burdened by an obligation, and the others are not, the donee can take nothing by the gift unless, he fully accepts it. Where a gift is in the form of two or more than two separate and independent transfers to the same person of several things, the donee can accept one of them and can refuse the others, although the former one may be beneficial and the latter one may be onerous.

Onerous gift to disqualified person — A donee who is not competent to contract even but still accepting property burdened by any obligation cannot be bound by his acceptance. But if, he becomes competent to contract and then being aware of the obligation if he retains the property given, he becomes bound by acceptance.

 

In this situation only one thing is different, in single transfer either the whole transfer to be accepted or whole transfer should be rejected. In case of separate transfer liberty is given to reject one and to accept others.

 

Ø Universal Donee

A universal donee is one to whom all the properties of the donor have been given and he is liable for all the debts and liabilities of the donor at the time of the gift. The object of this is to protect the creditors of the donor.

Ø Donatio Mortis Causa

It means death bed gift. When the donor is in critical condition and dies meanwhile if gift is made it is called death bed gift. It can be of immoveable/moveable property and it is valid only after the death of donor not before that.

Law pertaining to gift under Muslim law[iii]

Concept of gift is different in Muslim law than that given in transfer of property act. Here it is a transfer of property or right by one individual to another according to the Muslim law and it also includes a) A hiba, which is an immediate and unconditional transfer of the ownership of some property or of some right, without any consideration and

b) An ariat, which means giving of some limited interest to someone in respect of the use or usufruct of some property or right.
If a gift of any property or right is made without consideration and the object of such gift is to get religious merit, it is called sadaqah.

Position regarding gift under Hindu law

In general whatever is given in transfer of property act is applied on Hidus. Just to mention specifically-

• A Hindu person may dispose of his separate or self acquired property by way of gift, subject in certain cases to the claims for maintenance of those who are legally bound to be maintained.
• A coparcener, may dispose of his coparcenary interest by way of gift subject to the claims of those who are entitled to be maintained by him.
• A father may by way of gift dispose of the whole of his property, whether ancestral or self acquired, subject to the claims of those who are entitled to be maintained by him.
• A female may dispose of her stridhana by way of gift, subject to the consent of her husband.
• A widow may in certain cases dispose of by way of gift a small portion of the property inherited by her from her husband, but she cannot do so by will.
• The owner of a joint property may dispose of that by way of gift, unless there is a special custom prohibiting alienation or the tenure is of such a nature that it cannot be alienated.

A gift in Hindu law is not mandatory to be in writing. For a valid gift it is required that there must be the delivery of physical possession from donor to the donee. If physical possession is not possible donor should do the required as he could do to entitle the donee for the possession of gifted property in order to validate such gift.

Gift to unborn person

• In Hindu law it is not allowed to make a gift in favor of unborn person.
• In Muslim law gift in favor of a child in the womb of the mother is valid if the child is born within six months from the date of the gift because in that case it is presumed that the child actually existed.

Suspension or revocation of gift

As a general rule gift once complete cannot be revoked but there are chances when a gift can be revoked or suspended. It is possible in two circumstances-

• By recession- where the donor was not having free consent or will while making the gift which means there was any undue influence, coercion, or fraud due to which donor was lacking the free consent factor and was bound to make the will. In such case gift may be rescinded.

 

• By agreement- where there was any prior agreement between the donor and the donee that the gift will be suspended or revoked on the happening of any specified event which is not depending on the will of the donor, if occurs the gift will be suspended or revoked.

 

Conclusion

Gift is a conveyance of the property which may be moveable or immoveable but it should be the property which can be transferred as per the law. Gift can be of the right over such property. Donor cannot gift any property with the intention to defraud his creditors. Though gift once completed cannot be revoked but such gift will be voidable at the option of creditors affected by such transfer. Gift of a future property is meaningless and void.