Gift Under Transfer Of Property Act
This Blog is written by Aditi Ladda from Symbiosis Law School, Noida. Edited by Shelal Lodhi Rajput.
Gift under Section 122 of Transfer of Property Rights, 1882 is considered as an exchange or transfer of ownership from one person to another without any consideration. It is the gratuitous transfer of ownership which is done voluntarily. The person transferring the property is known as the ‘donor’ and the one receiving is known as the ‘donee’. A gift may be in the form of movable as well as immovable property. The gift may be revoked under the law if its essential elements are not implemented properly.
ESSENTIALS OF A GIFT
There must be a transfer of ownership
Similar, to the case of the sale there must be a transfer of all the rights to a property from the Donor to the Donee. It is permissible to make a conditional gift with the condition that it must not be repugnant to any of the provisions of sections 10 to 34 of the Transfer of Property Rights, 1882.
The transfer must be without consideration
A transfer which is executed by the donor to the donee would not be considered as a gift if any consideration is attached to it. The word ’Consideration’ refers to the monetary value and not love or affection. Passing of money as a consideration, even the smallest amount would destroy the nature of transfer as a gift and make the transfer null and void.
Property in existence
Future property cannot come into the ambit of transfer as a gift. The property must be existence and it can be in the form of movable or immovable property.
The transfer must be voluntarily
The transfer of gifts from the donor to the donee must be done voluntarily and with his consent. The consent should not be by the use of force, fraud, or influence.
TYPES OF GIFTS
When the donor delivers any gift to the donee during the lifetime of the donor then the gift is considered as a lifetime gift.
The gifts that are expected to be delivered by the donor to the donee after the death of the donor, is known as Deathbed gift. The gift becomes effective only after the death of the donor.
Any gift which is made with a burden or obligation imposed on the donee by the donor on any immovable property is called an onerous gift. This gift also called the exchange of debt of an object from the donor to the donee. This gift is generally illegal but if the donee has no obligation to carry the burden of the gifted object then that gift may become valid on the basis of Section 127 of Transfer of Property Act, 1882.
PROVISIONS IN THE LEGISLATURE
Section 124 of the Transfer of Property Act, 1882 states that gifts cannot be related to any future property. Any promise made by the donor to the donee for the transfer of future property is void under Hindu or Mohammedan law.
Section 125 of the Transfer of Property Act, applies when a gift is transferred from one donor to two or more donees. Refusal of one donee will lead the gift void, to the extent of the interest of that particular donee.
Section 126 of the Transfer of Property Act states that conditional gifts are allowed under the law. However, there are certain essentials attached to it. That the condition should not be vague, immoral, illegal, or opposed to public policy.
Section127 of the Transfer of Property Act deals with onerous gifts. The effect of such a 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.
Section 128 of the Transfer of Property Act talks about the concept of Universal Donee. When the gift consists of the whole property of the donor, the donee becomes personally liable for all the debts by and liabilities of the donor.
Section 129 of the Transfer of Property Act excludes the Mohammedan law of gifts. The particular section is extremely controversial and has been constitutionally challenged.
Facts: The plaintiff was allotted a house by the His Highness Nawab of Kanpur. In the year 1949, after the merger of Rampur with U.P. his house was given to the Municipal of Rampur by the Government of Utter Pradesh. The Municipal Board thereupon demanded rent from the plaintiff through notices and on refusal to pay, attached the house.
Issues: The plaintiff filed a suit for declaration that the house belonged to him and in the alternative, he was the licensee, who was entitled to remain in the house for a lifetime, without payment of any rent.
Judgement: After checking the documents which were allotted to the plaintiff by the Donor, Nawab wanted to merely give the residential accommodation in the house which was owned by the Government. For a purpose of ownership, it is always clearly stated in the document that the property transferred to the Donee, can be used in the way that he likes. Mere allotment of accommodation by the Nawab cannot be termed as the transfer of ownership. For the transfer of ownership the language needs to be very clear in the documents. The transaction was held to be a grant of license revocable at grantors opinion. In the absence of any gift by the donor, it cannot be taken as the gift of property under the Transfer of Property Act, 1882.
Analysis: The word ‘allotment’ cannot be confused with the word ‘ownership’. The intention of the donor needs to be clear and it should be clearly understood by the donee. If the donor gives a particular property for usage it cannot come under the definition of ‘gift’ mentioned in Transfer of Property Act, 1882. Mere giving of property for lifetime use cannot be described as a gift. The Donor must voluntarily mention and clear that the property is being transferred to the donee without any consideration in return.
GIFT UNDER MOHAMMEDAN LAW
Under Islamic Laws, a gift or ‘Hiba’ is the transfer of property, made immediately or without any exchange from one person to another, without any consideration. Mohammedan Law draws no distinction between real and personal property. In the case of usufruct Ariat produce, Manqfi refers to the right which accrues from day to day in the future. The Manqfi may be transferred by the donor during the lifetime by gift or by bequest or be the subject of gift even though they are not in existence at the time of the gift.
There are three essential conditions that need to be followed while gifting under Mohammedan law:
1) Declaration of the gift by the donor
2) Acceptance of the gift either expressed or implied by or on behalf of the donee.
3) Delivery of the possession as in the subject of the gift.
The donor willing to give a gift must be of sound mind and should not be a minor. The donee can be a Muslim or a non-Muslim. He can be minor but the gift needs to be received by someone else on his behalf. Both the laws, i.e. Transfer of Property Act and Mohammedan laws are silent about the transfer of future property. The donor must have absolute possession of the property. A Muslim can make an oral gift of his immovable property subject to some conditions. There must be the delivery of possession, if there is no delivery, then it cannot be termed as a gift. Under this law, a valid gift can be affected by the delivery of possession.
In the held in the case of Aashiq Ali and Ors. Vs Smt. Rasheeda Khatoon and Anr, that in view of the provision mentioned under Section 129 of the Transfer of Property Act, the provision of section 123 of the Act shall not affect the validity of the gift under any rule of Mohammedan law. So if there is an oral gift and the above three essentials are fulfilled, it cannot be ignored on the ground that a gift made under Mohammedan law is not in accordance with section 123 of the Transfer of Property Act.
A gift can be revoked even after the delivery under the following conditions:
1) When is a gift made by husband and wife to each other
2) When the donee is dead
3) When the gift is made for certain religious purpose or for any charity
4) When the particular gift has been lost or destroyed
5) When the value of the possession in question has been increased
6) When the gift in question has been changed to an extent where it cannot be identified.
Gift is basically the transfer of property or ownership without any consideration. It is the voluntary transfer of a property a donor to a Donee. The concept and subject matter of gift has been a traditional issue that has thus has been described under the Transfer of Property Act, 1882. It is important to note that the word ‘gift’ mentioned under the Transfer of Property Act should not be confused with the word ‘Hiba’ mentioned under the Mohammedan law. Both these terms are totally different. The intention of the donor must be clear while transferring the property. Gift is an offer made by the Donor to the donee with his will and accepted by the donee. Any question related to the transfer of future property does not come under the ambit of gift.