Gift under transfer of property act is the transfer of certain existing movable or immovable 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.

This Section defines a gift as a gratuitous transfer of ownership in some property that is already existing. The definition includes the transfer of both immovable and moveable property.

What are the modes of making a gift?

There are two modes of making a gift:

1.               By Registration,

2.               By delivery of Possession.

BY REGISTRATION:

In case of immovable property, registration is mandatory, no matter what the value of the property. If a gift of a piece of land values less than 100 rupees, it must also be registered. 

BY DELIVERY OF POSSESSION:

In case of movable property, registration is optional and depends on the donor, whether he wants to register it or not. Value of property does not matter here. Making a gift of movable property can be by mere delivery of goods in the same way as goods sold. Registration is also not required for making a gift to an idol. Further, making a gift to an idol means making a gift to a religious trust. It can be made orally like the delivery of goods.

Actionable Claim is an intangible movable property means an unsecured debt on the property. Section 130 of the Transfer of Property Act deals with the transfer of actionable claims according to which it may be transferred by a signed instrument. Registration is not mandatory for transfer of actionable claims

Gift involves what kinds of property? How the property can be transferred?

Any movable or immovable property can be transferred by the donor subject to the condition that the property should be in existence while making a gift. Gift of future property will be void. Tangible and intangible property can also be transferred. For example, Ajay transfers his house to Bhavesh which he is going to purchase in the year 2021. Gift made by Ajay is void because at present Ajay himself doesn’t have the ownership of that house, this is future property.

Gifts should be made with or without consideration?

If you transfer property to someone and get money in return for that, then it will become a sale of goods. A gift is always without any consideration. There should be no consideration for that. For example, a father gifted his land to his daughter and Rs. 40,000 was mentioned in the gift deed as the valuation of property which was necessary for stamp duty. This money was not for consideration and the court held that this transfer was not the sale, it was a gift made by father to his daughter.

Gifts should be made voluntarily or not?

 A gift should be made without any force or pressure. It should be made by the donor’s free consent. Gifts should be made voluntarily by the donor. Acceptance of gifts should also be made voluntarily without any force. For example, A by force gets transferred all B’s property, it will not be considered as a gift.

Acceptance of gift by the done:

 To constitute a valid gift, there should also be acceptance by the donee. Donee may refuse to accept the gift, it will depend on the donee whether he wants to accept the gift or not. If the property which the donor is going to give is beneficial for donee, then donee will accept the gift, if that property is a burden for him means if he would be burdened with many liabilities on that property, then he may refuse to accept the gift. Acceptance may either be expressed and implied. Implied acceptance would be considered when one took possession over the property, and then he impliedly accepted the gift.

When gift may be suspended or revoked?

Suspension and revocation of the gift provided under section 126 of the Act and is when the donor and donee may agree that on the happening of any specified event. The same does not depend on the will of the donor; 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.

It can be irrevocable except by the two methods:-

Revocation by an agreement

·   A gift is revocable, it should be suspended or revoked if both the parties i.e. the donor and the donee; have agreed that on the happening of a specified event and not depending upon the will of the donor. It is important that the parties must have agreed to the condition at the time of the gift, for a gift that is complete and absolute at the time it is made cannot be modified by a condition subsequently added.

Revocation on the grounds of undue influence, fraud, etc.

·   A gift may also be revoked in any of the cases in which if it were a contract, As per the Indian contract act, all the essentials of a valid contract should be fulfilled. It might be rescinded if any essential is not fulfilled.

Onerous gifts

·   Section 127 provides that if a gift is in the form of a single transfer to the same person of several things of which one is, and the others are not an obligation, the donee can take nothing by the gift unless he accepts it fully

·   If a gift is in the form of two or more separate and independent transfers to the same person of several things, the donee is at liberty to accept one thing among them and refuse the others, although the former may be beneficial and the latter onerous.

·   It is based on the principle that (Qui senticommodum, debt etsentire onus). The rule is similar to the doctrine of election, as the donee has to elect to accept the whole gift or nothing.

Universal done

·   As per section 128 of the Act, he is one to whom the donor’s whole property is given. He becomes liable for all the debts and liabilities of the donor. But to the extent of the property comprised in the gift.

Conclusion

For making the gifts, the donor and donee should fulfil the provisions of the Transfer of Property Act, 1882, as stated under Sections 122 to 129.

Case Laws

SundarBaiVsAnandiLal

In this case donee was a child and in the care of donor himself. The High Court held that in such circumstance, express acceptance could not be insisted upon.