Everyone likes to receive gifts…… it feels good. When we talk about gifts, what we have in mind is something to be given to another, handing over full ownership, while not mandatorily getting anything in return (while still expecting something in return, a gift or cash which suffices to the cost of what was initially gifted)…..That’s how social fabric works!! But when we talk about gifts under Transfer of Property Act, there are certain legal requirements which decide whether it is acceptable as a gift or not, whether it can be taken back, or can be conditional, etc. There are different requirements for gifting immovable and movable properties as well. So here, have a look and understand what all it takes to make a legal impact with the gifts.
Check this discussion over rights in father’s property
Gift in Transfer of Property Act
Chapter VII of the Transfer of Property Act, 1882 deals with gifts and related aspects. It lays the definition of gift, provides clarity about the essentials of a gift, and the nitty gritties which decide its effectiveness.
Definition of Gift in TPA
Section 122 defines gift under Transfer of Property Act 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 till capable of giving,
If the donee dies before acceptance, the gift is void.”
Essential Elements of Gift under TPA
For making gifts as per Transfer of Property Act, the transaction should comply with the following conditions:
- Voluntary Transfer
A gift should be made voluntarily, out of free will, and not due to coercion, force, misrepresentation, etc.
- Of Movable or Immovable Property
A gift can be made involving a movable as well as immovable property. While in case of movable property, transfer of the same physically may convey the gift, in case of immovable property, transfer of ownership may require some paperwork.
- By donor favouring donee
The person who makes a gift under TPA is called the donor, and the one in whose favour such a gift is made is known as the donee.
- Absence of Consideration
A gift is a gift when you give the same out of love or affection. If it is made in return of something else, mainly a consideration, it is not a gift. So if transfer of movable or immovable property is made asking for something valuable in return, it is not a gift under Transfer of Property Act.
- Acceptance by donee
When a donor proposes for a gift, the person in whose favour the gift is being made, the donee, needs to show acceptance, either express or implied. No acceptance makes the gift void.
- Acceptance during lifetime of donor
The donor needs to accept the gift during the lifetime of the donor. If the donor announces a gift in favour of donee, who is yet to show acceptance for the same, and in the meanwhile the donor dies, the gift becomes void.
- Transfer
For a gift to be completed, it is important to make the transfer of ownership of the same. In case of movable properties, delivery may be enough, or parties may proceed with a registered document as well. However, as per Section 123, gifts under Transfer of Property Act for immovable property can be effected by a registered instrument signed by or on behalf of the donor, and attested by at least two witnesses.
Suspension or Revocation of Gift
Section 126 of TPA states about circumstances when gift may be suspended or revoked. It states that the parties may agree on suspension/revocation of the gift on the happening of a certain event, which is not dependent upon the donor’s will. On the other hand, if the event so agreed depends upon the will of the donor, such a gift turns void. A gift may also be revoked in any of the cases in which if it were a contract it might be rescinded, and as such not revocable.
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Onerous Gifts
To understand the literal meaning, onerous means something involving great deal of effort or difficulty. In case of gifts under TPA, Section 127 of the same discusses onerous gifts. Onerous gifts are those which accompany certain obligation for the donee. The provision states that when multiple gifts are made to the same donee, wherein one of them may be burdened by an obligation and not the others, the said onerous gift must be accepted either fully by the done, or he/she cannot take anything.
On the other hand, if two or more gifts are made in multiple transfers to the same donee, in that case the donee is at liberty to accept one of them and refuse the others accompanying obligations. For a person who is not qualified to contract or give free consent, such a donee is not bound by any obligation in an onerous gift. After becoming competent to contract and being aware of the obligation, he/she becomes bound by the said obligation.
In case the gift consists of the donor’s whole property, the donee is liable to any dues or liabilities to the extent of the property so received in gift.
