Essential Elements of a Valid Gift under Transfer of Property Act 1882
Chapter VII of Transfer of Property Act , 1882 consists of “gifts “. Gift is stated in section 122 of the act. It is a gratuitous transfer which means that it involves no consideration and it is made voluntarily . In gift an existing property is transferred in favour of another person without consideration. A gift may be made between two living persons( a donor and a donee) or it may take place after the death of the transferor.
In the case of Gandevella Jayaram Reddy v. Mokkala Padmavathamma it was held that execution of gift deeds be registered document during interim order directing status quo is permissible. Moreover Court stated that where the transfer of immovable property was by way of “Pasupa Kumkuma” which means a gift, settlement or assignment of Land of daughter, this amounts to gift and requires registration.
ESSENTIAL ELEMENTS TO CONSTITUTE A GIFT VALID ARE :-
1)Transfer of ownership is must:
A gift mainly includes transfer of ownership. In gift the whole of the interest of the person in the property is transferred in the favour of another person. The person who transfers the interest is known as ” Donor ” whereas to whom the interest is transferred in the property is known as ” Donee “. Making of conditional gift of property is permitted but the condition must not be repugnant to any of the provisions of section 10-34 of this act.
In the case of Nur Bhanu v. Abdul Amis Bhuinya AIR 2006 in this case the question of fact was the mental capacity of the donor i.e the donor must be competent to the contract. The Lower court in this case had recorded the finding that the donor was mentally sound and capable of executing the deed therefore the court said that this finding could not be interfered with in second appeal the deed was duty registered and proved by evidence of the attesting witness no conspiracy element was proved the suit was also filed after three years and that is why this finding could also not be interfered with.
In the case of CIT Jaipur V. Hirehmal Nawalakha the court held that there may be transactions of transfer which may not amount to a gift within the meaning of section 122 of the act but would be regarded as gifts for the purpose of subjecting such transfers to the levy of gift tax which is now abolished. However there has to be a Transfer of Property and a transfer by reason of section 17 of the registration act 1908 can only be by way of registered document.
2)The property must be existent :
For a valid gift it is needed that the property must be in existence at the time of making the gift although its conveyance may take place either in present or in future. Both the types of properties movable and immovable may be gifted but a gift of a future problem property will always be void. Section 124 states that the property must be in existence at the time of making of gift otherwise the gift will be void actionable claim is an existing property and it can be gifted a gift consisting of both the existing and future property is void as to the Future property. A mortgage or released immovable property may be gifted.
In the case of Munni Lal Mahto v. Chandeshwar Mahto AIR 2007 Court held that the gift of a part of the joint family which fell to the share of the donor under the preliminary decree of partition must be held valid. Moreover the court said that once a preliminary decree in a suit for partition is passed it amounts to a severance of the status of joint family coparcenary. Then parties are no coparceners they are then tenants in common in position the moment of coparcener comes to an end its coparcener is free to give his share those still not physically divided there’s become definite under the decree.
3)The transfer must be voluntarily made and without any consideration:
The gift must have been made by the donor with his free will and consent where the content of the donor should not be free i.e the consent should not have been given due to coercion or undue influence. According to Section 15 and section 16 of the Indian Contract Act in coercion the donor is supposed to execute a gift deed by threat of committing any act punishable by the Indian Penal Code.
For example – Where are gift deed it was executed by lady and her son under the threat of her husband that he will commit suicide and they will not give their property to his brother the gift was held to be not a valid gift.
In the case of Pratima Choudhury v. Kalpana Mukherjee 2014 4 SCC 196 the court stated parameters for examining validity as per nature of the transaction in the case of undue influence where the consent of the donor of the gift is influenced. The code dealing with such a case has to ask two questions
(A) Whether the relations between the parties are such that one is in position to dominate the will of the other person?
(B) Whether the position has been used to dominate the will, i.e whether the undue influence has been actually exercised?
In the case of Sulender Singh v. Pritam AIR 2014 the court held that where the answer of both the questions stated in the above case is affirmative then the court will presume and you influence and the gift will be set aside.
In the case of Roshan Lal v. Kartar Chand AIR 2002 HP 131 it was stated that in the case of execution of gift deed giving entire property to a party after cancelling prior execution of a will in favour of another person and no evidence as to fraud undue influence was given it was held that mere fact that the Donor was 85 years of age and he had already executed a will in favour of another person long back in the year 1869 or witness attesting the gift deed where not from the village of the donor or defendant had not been proved to be legally adopted son of the donor would not mean that the gift deed was the result of undue influence.
4)The transfer must be accepted by or on behalf of donee:
Acceptance of the gift by the donee is must. In certain scenarios that donee may refuse to accept the gift. For example- where the gift is an onerous or not beneficial to the donee then he refused to accept it. ( an onerous gift is a gift of such a property which is burdened with liability like tax , revenue etc which exceed the market value of the property.) Acceptance of the gift may be expressed or implied. Where the donee accepts the title deeds of the property gifted, it is implied acceptance of gift. Where the mother, natural guardian, gifted property to minor retaining possession and right of enjoyment for herself, ownership of property by minor can be presumed by silent acceptance particularly when the minor is an educated boy of 16 years and has the knowledge of execution of gift.
In the case of K Balakrishnan v. K Kamalam AIR 2004 SC 1257 court held that non – delivery of possession of gifted property, non- exercise of ownership rights over it and failure to get property mutated in his favour on attaining majority are not the circumstances negativing presumption of implied acceptance of gift my minor. The donor must also be a competent person. He must have the capacity as well the right to make the gift. He must be competent to contract i.e he must be major and of sound mind.
In the case of R Jamuna Bai v. MA anusuya AIR 2001 MAD 392 it was held that section 122 provides that 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 the gift is void gift is a bilateral transaction between two living persons therefore the acceptance of the gift must be completed before the donor dies or becomes in competence to make a gift if the donee dies before accepting the gift the gift becomes void. The Mere fact that the beneficiary stored by the side of the settlor at the time of registration of deed is no ground to say that he had accepted the same.
In the case of Urmila Devi v. State of Bihar AIR 2015 NOC 859 the plaintiff has to discharge his burden to prove when he claimed the gift deed to be sham. The court held that the gift deed will be considered to be valid if he is unable to discharge it. a gift deed cannot be held to be a forged or fabricated document merely on the ground that the donee’s address as mentioned in the deed was wrong. Moreover the court stated that the same could be rectified by executing another document; it could not also be termed as forged because Donor remained in possession. The donee was the sister of the donor therefore it could be so because he was looking after the property.
5)The transfer must be effected in the manner prescribed by law
Author: sarthak udaipuria,
ICFAI LAW SCHOOL HYDERABAD, 4TH YEAR