Gift related provisions under the Transfer of Property Act 1882

Gift related provisions under the Transfer of Property Act 1882

Index

  • What is the meaning of a gift?
  • Types of Property
  • Essentials of gift
  • How to transfer a property in the Transfer of Property Act, 1882?
  • Gift of Existing and Future Property is valid or not?
  • Is gifting property to more than one person valid or not?
  • How can we revoke or suspend a gift?
  • Meaning of Onerous gift
  • Meaning of Universal Donee

  What is the meaning of a gift?

A gift means something voluntarily transferred by one person to another without consideration. We all might have received or given gifts on several occasions, it’s a gesture of how much we care about the people close to us, but did you know that gift is one of the legally recognized modes of property transfer? This article is all about the gift, how we can transfer property by gift, the essentials of gift, what provisions are mentioned under TP Act 1881, and the essential elements that need to be satisfied for a gift to be considered legally valid.

Under Chapter VII, Sections 122 to 129 deal with a gift. Giving property without claiming or expecting anything in lieu thereof, no money, no property, is called a gift. This chapter does not apply to Muslims. It also does not apply to Mortis Causa (Marzul- maut) donations. It has to be free, has to be registered (if moveable property), has to be accepted by the donee and must be voluntary.

According to Section 122, a gift is transferred inter vivos of existing property whether-

  • Movable or
  • Immovable

Made voluntarily, without consideration, by a donor to the donee.

  • It must be registered, whatever the value if it is immovable property. 
  • In the case of moveable property, it can be by delivery of possession or registered deed.

Must be accepted by the done,

  • During the lifetime of the donor,
  • While he is still capable of giving,
  • The gift is void if the donor dies before acceptance by the done.

Types of Property

Kinds of Property:

Corporeal And Incorporeal Property: Corporeal Property: 

Corporeal Property is the right of ownership of material things. Corporeal Property is always visible and tangible. The senses can perceive corporeal Property. It can be seen or touched, for example- a Land, Car, a House, etc.

Corporeal Property is further divided into two classes- 

  • Movable Property (Chattels) and Immovable property. (Land and buildings)
  • Real Property and Personal Property 

Incorporeal Property: 

Incorporeal property is intangible. The Senses cannot perceive it. The incorporeal property is also called intellectual or conventional property. 

Examples - Patents, Copyrights, Trademarks, etc.

  1. Movable Property and Immovable Property

Movable Property:

Movable property can be transferred from one place to another with human efforts.

Immovable Property:

Section 3 of the Transfer of Property Act 1882 defines immovable property as that that does not include standing growing crops, grass, or timber.

  1. Real and Personal Property:

Real property: The real property includes all rights over land with such additions and exceptions as the law has deemed fit.

Personal property: Personal property law includes all other proprietary rights, whether in rem or personam.

  1. Public property and private property:

Public property: Public property means a property owned by the public as such in some governmental capacity.

Private property: Private property is owned by an individual or some other private person.

Essentials of gift:

The transfer has to be "voluntarily and without consideration," meaning:

  • The word voluntarily in the section is popular, denoting the exercise of unfettered Will and not in its technical sense of 'without consideration.' The term 'consideration' is used in a sense as in the Indian Contract Act and excludes natural love and affection.
  • But a transfer in consideration of an exception of spiritual and moral benefit, or consideration of genuine love and affection is a gift for such consideration is not that is contemplated by the section. 
  • Where a gift of immovable property is affected by a deed of a gift but brought about by the undue influence of the done, through the donor acted voluntarily making it, it is not void but is only voidable and suit to set it aside must be brought within three years of prescribed by Limitation Act.

 Donor:

  • The donor means a person who gives a gift. Any person who is the property owner can make a gift of his property. 
  • In the case of the minor, he is incompetent to contract, is incompetent to transfer, and the gift by the minor would, therefore, be void. 

Donee:

The donee means a person who accepts a gift. 

  • A gift may be accepted by or on behalf of a person who is not competent to contract. Thus, a minor can be a donee. But when he attains the majority, he must either accept the burden or return the gift. 
  • The done must be alive at the time of the gift, and the representatives of a deceased person at the date of the gift cannot take for him. The public can not be a donee in this section. 

 Subject-matter

  • The subject matter of the gift must be certain. It may be existing movable or immovable property, but a property must be transferable under section 6 of this Act. 
  • A future property cannot be made the subject matter.

 Transfer:

  • A transfer is a transfer of ownership. A transferor must have absolute rights and interest in the property. 
  • Transferring interests means transferring all the rights and liabilities regarding the property.

 Registration:

  • The gift deed has to be registered. It is mandatory if the subject matter of the gift is immovable property and includes immovable property. The value of the immovable is not relevant and maybe Rs. 100/- or below or above it.
  • Gift of immovable can be only by deed, and the deed must be registered and duly stamped. A gift of immovable property without gift-deed and its registry is void as a gift.

 Acceptance:

  • The two schools of Hindu Law had a divergence of view regarding the necessity of accepting the gift by the donee. 
  • Dayabhaga school, holding that acceptance was not necessary. But Mitakshara school has the contrary. 
  • English Law states that necessitates acceptance because a man will accept what is for his benefit. This rule is not applicable in India, and there is nothing in the section to show that the acceptance under this section has to be expressed.
  • The acceptance may be inferred and proved by the donee's possession of the property.

How to transfer a property in the Transfer of Property Act, 1882?

According to section 123 of the Transfer of Property Act, 1882, there are two ways to execute the transfer:

  • By registration
  • By delivery

The method of execution mainly depends upon the nature of the property. When it is a movable property, delivery of possession is sufficient, but registration is compulsory irrespective of the valuation of the property when it is an immovable property.

 Gift of Existing and Future Property is valid or not?

According to Section 124, when any gift is made comprising of one existing and one future property, the whole gift is not said to be void. Only the part consisting of the future property will be void, and the part consisting of the existing property will be valid. This is because a gift is a transfer of vested right and not contingent, so we cannot transfer further what we do not have.

 Is gifting property to more than one person valid or not?

According to Section 125, when a gift is done jointly to more than one person, and few accept it, and few do not, then the one who accepts it, for them it is a valid gift, and for those who do not, it will be void.

 How can we revoke or suspend a gift?

According to Section 126 of the Transfer of Property Act 1882,

A revocation means the annulment of a promise or decree. The revocation of a gift is always done before its acceptance. It can also be a condition by a donor that the gift will be suspended or revoked in the event of some event and fulfillment of some condition.

Revocation can be done by two methods:

  1. Revocation by mutual agreements:  

When both the parties, i.e., donor and donee, agree that the gift will be suspended or revoked on the happening of some event, that particular event is not dependent upon the donor’s will. The condition for revocation is condition subsequent, and it must be valid and enforceable. Any such condition which is not valid, the gift cannot be revoked.

  1. Revocation by the recession of contract: 

An express or implied contract always precedes a gift deed. As per the Indian contract act, all the essentials of a valid contract should be fulfilled. If any essential is not fulfilled, it can be revoked.

Meaning of Onerous gift

  • According to Section 127, A gift may be made of one property or several properties to the same person at one time. It may also be made of several things independently of each other.
  • In any of these cases, any one or more things may be burdened by some obligation. 
  • The question in such a case would be whether the donee can accept the gift in part and reject what is so burdened. The answer to this question depends on whether the gift of several things is made by one transfer or other transfers.
  • If it is by one transfer, the donee must accept the gift in its entirety. Otherwise, he cannot take anything at all.

 Meaning of Universal Donee

  • The term 'Universal donee' is defined under Section 128; universal donee is one to whom the whole donor property is given and consequently becomes liable for all the debts due by liabilities.
  • The concept of the universal donee is not recognized under English Law. Hindu law recognizes this concept as 'sanyasi,' way of life where people renounce all their worldly possessions and take up spiritual life.
  • When a man retires from the world and becomes an 'Astic.'

To read this article in Hindi - Transfer of Property Act 1882

To read about the Formate of Gift Deed.

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Gift related provisions under the Transfer of Property Act 1882