The Transfer of Property Act, of 1882 formulates rules, regulations, and procedures for the transfer of property. Section 122 to 129 of this Act covers the provision of transfer of property which is transferred as a gift which is incorporated under chapter 7.
The person who transfers his property to another is called a transferor or donor and to whom the property is transferred is known as transferee/ donee. Gifts can be of two types. When a transfer of property is taken place between two living people, it is known as an inter-vivos gift and when it takes place after the death of the transferor, it is a testamentary gift. In this article, we will understand the essential elements that need to fulfil to constitute a legal and valid gift.
What is A Gift? – Section 122 of the Transfer of Property Act,1882 defines the Gift. It states that a Gift is the transfer of certain existing property( movable/ immovable) made voluntarily and without any consideration by one person(donor) to another(donee) and donee or any authorized person on his behalf accept the such gift. From the above-mentioned definition, We can derive some of the essential ingredients of a valid gift.
- Transfer of Ownership of the property-The person who transfers the property must have a right to transfer. This right is determined by his ownership of the property at the time of making the gift. The transfer of certain property as a gift implies the transfer of ownership of the property. In gift, absolute interests of the donor in that property are transferred in the favour of the donee. Absolute interest includes all the rights and liabilities with respect to that property.
- Existing property– For a valid gift, the property which is the subject matter of the gift should be in existence at the time of the making of the gift. Any gift with respect to future gifts will be void. The existing property can be in movable, immovable, tangible or intangible forms.
- Minimum of two parties– To constitute a valid gift, there should be at least two parties(donor and donee). The donor should be competent to the contract. It means he/she should be at the age of majority and of sound mind. Registered societies, firms, and institutions as being juristic persons are competent to make gifts. While donee needs not to be competent to contract. In case when donee is being minor, to constitute a valid gift any other authorized person on his behalf can accept. The donee can be more than one person.
- Voluntarily transfer of property without any consideration– a gift should be made voluntarily by the donor in the exercise of his full knowledge and free consent. Free consent means making the gift without the involvement of any force, fraud, coercion, or undue influence which renders a gift invalid. A gift must be transferred without any consideration. Any consideration even if it is negligible would transform the gift into either a sale or barter.
- Acceptance of the gift– The donee must have communicated his acceptance of the gift. without consent, a gift cannot be given. Such acceptance can be either expressed or implied. Implied acceptance can be inferred from the conduct of the donee and the surrounding circumstances. The acceptance must be made during the lifetime of the donor and if donee dies before accepting the gift, the gift becomes void.
How will the transfer of the property affect it?
As per section 123 of the act, for the purpose of making a gift of immovable property, the registration of transfer must be made and it must be signed by the donor in presence of two witnesses. However, in the case of movable property, the transfer can be made either by registration as aforesaid or by delivery of the property in the same way as the goods sold are delivered.
Section 124 deals with the gifts of existing and future properties. It states that a gift that contains existing as well as future property, then the gift with respect to the existing property will be valid while a gift related to the future property will be void. Section 125 states that If a gift, is made to several persons, then those by whom the gift is accepted, become valid and for those by whom it is not taken, those gifts become void.
When the gift may be suspended or revoked?
The gift may be revoked under the following circumstances.
- If both parties(donor and donee) agree to revoke the gift on happening of a specific event that doesn’t depend on the will of the donor, in that case, the gift shall be revoked. For example, if A makes a gift of a property to B on the condition that he will right to take back the property if B dies in A’s lifetime. B dies before A. Here A may take back his property.
- A gift may be revoked case if the donor transfers the property involuntarily or without free will under coercion, influence, fraud, mistake, or misrepresentation.
Section 127 of the Transfer of Property Act,1882 describes about the Onerous(Burden) gifts. These sections can be divided into two parts.
- Gifts in a single transaction– If several gifts is made to a single person in a single transaction in which one is burdened by an obligation and the other is free from obligation, in such case, the donee can either accept all including obligatory one or noting.
- Gifts in multiple transactions- If several gifts are made to a single person in multiple transactions in which one is burdened by an obligation and the other is free from obligation, in such case the donee can accept one beneficial of them and refuse the other onerous property.
However, if a donee is not competent to contract, then he has not been burdened by any obligation by his acceptance. But after becoming competent to contract, if he retains the property, he becomes bound.
Moreover, the total liability can not be more than the value of the total gift received by the donee(Section 128). These provisions shall not apply in Donations Mortis causa(gifts made in contemplation of death) and in Muhammadan law. In Muhammadan law, the only essential requirements are declaration, acceptance, and delivery of possession. Registration is not necessary.