Concept and Kinds of Gift | Transfer Of Property Act, 1882

This article deals with the Concept and Kinds of Gift. A gift is a gratuitous transfer, i.e., without consideration. In the process, an existing property is transferred in favour of another person without consideration.

I. Introduction and Meaning

Section 122 of the Transfer of Property Act defines “gift” as follows:

“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. Acceptance when to be made.—Such acceptance 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.’

A gift is a gratuitous transfer, i.e., without consideration. In the process, an existing property is transferred in favour of another person without consideration. A gift may be made between two living persons or it may take place after the death of the transferor (testamentary).

A gift between living persons is inter vivos gift, and it is a transfer by operation of law, and it does not come within the purview of this Act. A gift made in the apprehension of death, i.e., gift mortis causa, also does not come within the scope of this Art. In a nutshell, a gift can be understood as:-

1. Gift is the transfer of certain existing movable or immovable property.
2. Made voluntary and without consideration;
3. By one person, called the donor, to another person, called the donee; and
4. Accepted by or on behalf of the donee.
5. Such acceptance must be made during the lifetime of the donor and while he/she is still capable of giving.
6. If the donee dies before the acceptance, the gift is void.

Essential elements

1. Transfer of ownership

A gift necessarily involves the transfer of ownership. In this, the whole of the interest of the person in a property is transferred in favour of another person. The person transferring the interest is known as ‘donor’, and the person to whom the interest is transferred in a property is known as the ‘donee’. The person making the gift is donor, whereas the person accepting the gift is donee. It is permissible to make conditional gifts of the property also, but the condition must not be repugnant to any of the provisions of sections 10 to 34 of the Act.

The donor must be competent to contract. The mental capacity of the donor is a question of fact.

The court said that generally a document which has characteristics of both gift and will has to be registered but the document may not thereby cease to be a Will. The intention of the executant has to be ascertained from the words employed.[1]

2. Existence of Property

For a gift, the property must be in existence at the time of making the gift, although its conveyance may take place either in the present or in future. Both types of properties, i.e., movable and immovable, may be gifted. A gift of future property is void. Section 124 provides that the property must be in existence at the time of the making of a gift; otherwise, the gift will be void. An actionable claim is an existing property, and it can be gifted. A gift comprising of both current and future property is void as to the future property. A mortgaged or leased immovable property may be gifted.

Gift of a part of the joint family which fell to the share of the donor under the preliminary decree of the partition of coparcenary property is held to be valid.[2]

3. Voluntary transfer, without consideration

The gift must have been made by the donor voluntarily, i.e., with his/her free will and consent. Where the consent of the donor is not free, i.e., the consent has been given due to coercion or undue influence, the gift will not be a valid gift. Sections 15 and 16 of the Indian Contract Act, 1872 define coercion and undue influence, respectively. In coercion, the donor is forced to execute a gift deed by the threat of committing any act punishable by the Indian Penal Code. Under influence as defined under section 16 of the Indian Contract Act, 1872 influences the consent of the donor of the gift. The court dealing with such a case has to ask two questions –

1. Whether the relations between the parties are such that one is in a position to dominate the will of the other person?
2. Whether the position has been used to dominate the Will, i.e., whether the undue influence has been actually exercised?[3]

Where a gift deed was executed by an old illiterate lady, and her thumb impression was not identified by her husband. None of the co-villagers or relatives was attesting witnesses. Instead, it was witnessed by a stranger from another village, it was held that the gift deed could not be said to be a valid gift and, therefore, the claim of ownership over the property by virtue of the gift deed was not tenable.[4]

4. Acceptance by donee

acceptance of the gift by the donee is necessary. In certain circumstances, the donee may refuse to accept the gift.

Acceptance of the gift may be express 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 a minor can be presumed by silent acceptance, particularly when the minor is an educated boy of 16 years and has the knowledge of the execution of gift.[5]

The donor must also be a competent person. He/she must have the capacity as well the right to make the gift. He/she must be competent to contract, i.e., he/she must be a major as well as of sound mind.

5. Delivering of possession

It is not necessary for the purpose of symbolising acceptance to show that possession of the immovable property gifted under the deed has been delivered. All that is necessary to show is that the things presented by way of gift were accepted by the donee.[6]

It was held that section 123 supersedes the rules of Hindu personal law insofar as they require delivery of possession to the donee. Thus, delivery of possession is not an essential prerequisite for the making of a valid gift in cases of immovable property.[7]

For the purpose of making a gift of immovable 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. Gifts of immovable properties, corporeal or incorporeal, of value less than Rs. The donor must sign 100 or more or on his/her behalf someone else must have signed it, attested by at least two witnesses and must also be registered.

Where the donee has taken possession of the gifted immovable property without a registered gift deed, he/she would not be allowed to protect his/her possession under section 53A of this act.[8]

II. Kinds of Gifts

1. Void gifts

The following are included under the category of void gifts if –

1. It is for unlawful purposes. (S. 6)
2. It is made upon a condition, the fulfilment of which is impossible or forbidden by law. (S. 6)
3. It is by a person incompetent to contract.
4. The donee dies before acceptance.
5. It comprises both the existing and future property is void as to future property.

Section 2(d) of the Indian contract Act 1872 provides that past illicit cohabitation cannot be the consideration for an agreement or transfer of property. Where a gift is made for such purpose, the gift is void.[9]

2. Onerous gifts (S. 127)

A gift is said to be onerous when it is accompanied with a burden or obligation. This section is based on the maxim qui senti commodum sentire debetet onus, which means that he/she who receives the advantage must also bear the burden.

The first paragraph of section 127 provides that where 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 burdened by an obligation, the donee can take nothing by the gits unless he/she accepts it fully. Here the following elements are essentials –

1. It must be in the form of a single transfer;
2. To the same person;
3. Of several things (properties);
4. Of such thing only one is burdened with obligation and others are not.

When such conditions are present, the donee will have to accept the gift fully. He/she cannot accept the benefits of gift only and reject the burdens or obligation. This provision provides that the donee may either accept the full gift or reject that, partial acceptance is not allowed.

Illustration (a)

A shares in X, prosperous joint-stock company, and also shares in Y, a joint-stock company in difficulties. Heavy calls are expected in respect of the shares in Y. A gives B all his/her shares in joint stock companies. B refuses to accept the shares in Y. he/she cannot take the shares in X.

Second paragraph provides that where 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 of them and refuse the others, although the former may be beneficial and the latter onerous. Thus, if a gift is made, accept the beneficial one and reject the onerous property. Here the gifts are separate and do not form part of the same transaction.

Illustration (b)

A, having a lease for a term of years of the house at a rent which he/she and his/her representatives are bound to pay during the term, and which is more than the house can let for, gives to B the lease, and also, as a separate and independent transaction, a sum of money. B refuses to accept the lease. He/she does not, by this refusal, forfeit the money.

III. Suspension or revocation of gifts (S. 126)

A gift is a transfer of ownership without consideration. A seed of gift once executed and registered cannot be revoked unless it can be shown that the mandatory requirements of the section were not complied with.[10]

It can be made subject to a certain condition. It is necessary that these conditions must be valid conditions according to this Act.

A gift once made is irrevocable, except in the following two cases provided by this section –

1. It is revocable if the donor and the donee have agreed that on the happening of a specified event (not depending upon the will of the donor), the gift should be suspended or revoked.
2. It 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.

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[1] Mathai Samuel v. Eapen Eapen, AIR 2013 SC 532

[2] Munni Lal Mahto v. Chandeshwar Mahto, AIR 2007 Pat 66

[3] Pratima Choudhary v. Kalpana Mukherjee, 2014 4 SCC 196

[4] Mukhraj Devi v. Manoj Kumar Singh, AIR 2002 Raj 152

[5] K Balakrishana v. Kamalam AIR 2004 SC 1257

[6] Giano v. Puran, AIR 2006 P&H 160

[7] Renikuntla Rajamma v. K Sarwanamma, AIR 2014 SC 2906

[8] Lankeshwar Malakar v. Harendra Nath Deka, AIR 2009 (NOC) 2462 (Gau)

[9] Sabava Yellappa v. Yamanappa Sabu, AIR 1933 Bom. 99

[10] Kamalakanta Mohapatra v. Praptap Chandra Mohapatra, AIR 2010 Ori 13

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