Meaning Of Gift And Essentials
This Blog is written by Anshuman Bisarya from SVKM’S NMIMS School Of Law, Indore. Edited by Saradarasagnya Oleti.
INTRODUCTION TO THE CONCEPT GIFT
“Gift” is the transfer of certain existing moveable or immoveable property made Voluntarily and without consideration, by one person, called the donor, to another, called the Donee, and accepted by or on behalf of the donee.
A gift is an exception to section 25 of Indian Contract Act, 1872 where a contract or an agreement without consideration is void to which gift is an exception (which is done on the account of natural love and affection).A gift can only be made in favor of an ascertainable person and it cannot be made in favor of an idol or public. Under the Transfer of Property Act, 1882,it is essential that gift must be accepted by the donee though it is not be necessary to be expressly accepted. Void gifts means a gift which is not enforceable by the law due to the incapacity of a party or both the parties i.e. donor or donee.
ESSENTIALS OF GIFT
One of the key essentials for the concept of gift is the presence of two parties. There must be two parties present. The donor must be of sound mind, competent to make a gift, must have attained the age of majority, and should not be disqualified by law. Moreover, the gift should be made out of free wish and will and it should not be under any undue influence, coercion etc.
Undue influence can be defined as a party being in a position to dominate the will or influence the other party so as to gain an unfair advantage over them. Undue influence can be a major issue when dealing with gift because gift can be understood as something that is given or bestowed upon another party on account of natural love and affection. The issue of natural love and affection and a party being in a position to influence the will of the other party can especially be tricky in a country like India with its tight knit family setup. There have been disputes among families or families’ members and the issue of gift has been dealt with in Courts. The issue about gift can be that it is given with consideration being natural love and affection and not some monetary or quid quo pro arrangement as can be seen in other contractual situations.
Gift cannot be made of uncertain property or of future property. When a gift is to be executed, the property transfers along with the ownership with all the rights and liabilities. The property must exist and must be transferable in accordance with the Transfer of Property Act, 1882.
A gift is an intervivos i.e. between two living persons. It is necessary that donor and donee must be living at the time of transfer and acceptance. If the donee dies before the acceptance then the gift become void.
For the purpose of making a gift of immoveable property, the transfer must be affected 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 affected either by a registered instrument signed as aforesaid or by delivery.
A gift comprising both existing and future property is void as to the latter.
ELEMENTS OF PROOF OF GIFT
Not all the transfers of property can be termed and classified as ‘gift’. There is a legal meaning attached to the word gift. There are a few elements of proof to be something classified as gift.
First would be the capacity of the donor. The donor must have attained majority in order to eligible to make a gift deed and execute it in somebody’s favor. The person should be of sound mind and not of unsound mind. The donor must have full understanding of his/her actions and should understand that they are about to execute a gift deed in somebody’s favor. The donor must intend to transfer the property as a gift. This can be proven through statements, writings, or conduct. Intent also means that the donor doesn’t expect compensation or consideration for the transfer. The intention behind the delivery of the gift can be actual, symbolic, or implied through conduct. In general an act must be made by the donor so as to indicate his/her intentions for executing the said gift deed. The donee must accept the gift, without any coercion or undue influence as revocable gifts can be revoked up until acceptance. Thus, any transactions under the name of gift cannot be actually called as gift if they do not meet some requirements as stated above.
The donor and done may agree that on the happening of any specified event which does not depend on the will of the donor a gift shall be suspended or revoked; but a gift which the parties agree shall be revocable wholly or in part, at the mere will of the donor, is void wholly or in part, as the case may be. A gift may also be revoked in any of the cases (save want or failure of consideration) in which, if it were a contract, it might be rescinded.
According to section 123, Transfer of Immovable Property through gift will be effective only by a registered instrument which is signed by or on behalf of the donor, and it should be attested by at least two witnesses. But, if the instrument is not registered then the title of the immovable property to the donee cannot be passed. However, transfer of movable property will be effective either by the registered instrument which is signed by or on behalf of the donor and attested by at least two of the witnesses or merely delivery of possession is sufficient. And such delivery will take place in the same way as the goods sold may be delivered.
IS A LAWYER NEEDED TO BE PRESENT FOR A GIFT DEED TO BE EXECUTED?
Transferring a gift can be a bit tricky especially in a country like India with its tight knit family setups. Also, some gifts involve even properties worth lots of money. Hence it is advisable to get a lawyer to help and execute a gift deed. An estate lawyer can help in executing a gift deed along with proper documents and everything so as to avoid any future disputes regarding the subject matter of the gift.
TYPES OF GIFT
1) Inter Vivos Gift: This is a gift that is transferred during the life of the donor, while they are still alive. These are irrevocable (i.e., the donor cannot reclaim the gift once transferred)
2) Causa Mortis Gift: A gift that is transferred in anticipation of imminent death. The transfer is usually effective upon the donor’s death, and can be revoked up until the donor’s death
3) Testamentary Gift: This is a personal gift distributed through a will. The gift is transferred to the donee after the donor’s death, and is often included in the overall distribution of the person’s estate.
• Donee died before the acceptance of a gift.
• When a gift is made for unlawful purpose.
• When a condition which is impose is forbidden by law or unlawful
• When a person is incompetent to make a gift i.e. minor or lunatic
Gift is not explicitly mentioned in the Indian Contract Act, 1872 but can be inferred upon from section 25 of the Indian Contract Act, 1872. Section 25(1) states that an agreement made without consideration is void, unless it is expressed in writing and registered under the law for the time being in force for the registration of documents, and is made on account of natural love and affection between parties standing in a near relation to each other, or unless.
Gift as defined under Section 122 of the Transfer of Property Act is-
“Gift” is the transfer of certain existing moveable or immoveable property made
Voluntarily and without consideration, by one person, called the donor, to another, called the
Donee, and accepted by or on behalf of the donee.
To conclude, any gift is the transfer of moveable property or immovable property. For a gift to be valid, it is essential to adhere to the fulfilling conditions of gift which are absence of consideration, presence of Donor & Donee, subject matter of the gift in the form of moveable properly or immovable property, Intention of the Donor, Delivery of the gift, Acceptance of the gift by donor, Paying taxes on gifts by donor except gift situated in abroad and charity & religious related gifts etc. A gift may become revoked due to lack of lack of donor’s will & donee’s acceptance, death of the donee, disqualification of the donor or donee, that the gift can be of unlawful matter which can lead it to be void, misrepresentation of subject matter etc except of having intention for exchanging gift, giving gift to close relatives which is tricky matter and cases of gift deed has been brought in Indian Courts over disputes of property worth lots of money, giving gifts for religious purpose etc. One has to adhere to the fulfilling conditions of the gifts and all the elements of proof of the gift should be there otherwise the gift can be deemed as void.