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The Concept Of Gift Under Transfer Of Property Act

According to Section 122 of Transfer of Property Act, 1882 Gift is defined as the transfer of certain existing moveable and 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. In short, a gift is a transfer of moveable or immovable property to a person without any consideration. The transfer of property act, 1882 defines 'gift' under section 122.

It is important to be noted that the gift should be accepted by the donee during the lifetime of the donor. It is because the donor should be able to transfer the gift to someone else if he desires when done does not accept the gift and if the done dies before the acceptance the gift is said to be void. Hence, an acceptance is important from the side of the donee to make the transfer of gift complete and that should be made by donee during the lifetime of the donor.

Section 123 of the transfer of property act stipulates how the gift should be transferred. It is precisely mentioned that for gifting an immovable property, the transfer must be effected by a registered instrument which is signed by the donor and that must be attested by a minimum of two witnesses. But movable property can be gifted either by the aforesaid method or by the delivery of possession.

For instance, if someone wants to gift thirty acres of land to someone, he has to execute a gift deed in the name of the donee and get it registered and signed by a minimum of two witnesses for making that transfer valid. But for gifting any movable property such as a car, scooter, or gold, he can gift it to anyone without registration by the delivery of possession. It is important to be noted that only the existing property can be gifted.

The donor should have right on the property at the time he executes the gift deed. In case if he acquires right on a particular property in the future, he can gift that property at the time when he gets that right and not before. It is mentioned under section 124 of the transfer of property act.

The shares of those who accepted the gift won't increase by the shares of those who refuse. When a gift is transferred to more than one person and one or more such person doesn't accept the gift, his share won't go to those who have accepted the gift and that will be void. For instance, a man executed a gift deed in favor of his four sons to transfer his 40 acres of land.

He intended to gift 10 acres for each son. However, three of his sons accepted their shares and got 10 acres of land each. But his fourth son did not accept the gift. So the share of his fourth son i.e, the 10 acres of land will be void as he rejected the gift and the man can transfer the said 10 acres of land to anyone he wants in the future. In short, just because the fourth son rejected his share that does not mean that his share will be divided between the rest of his sons, and their shares increases. It will return to the donor.

Section 126 stipulates when the gift can be suspended or revoked. The general rule is that the donor can't gift anything to anyone by saving the liberty of revoking the gift at his pleasure. But section 126 of the transfer of property act is an exception to this general rule. In certain cases, the donor can exercise such power. The power of revocation would be valid if the event on the happening of which the gift can be revoked does not depend upon the will of the donor.

For instance, A gifted 50 acres of land to B with a condition that A shall take back the 50 acres of land if B dies before A and B agreed to it. Here, if B dies before A, A will get his property back as the death of B does not depend upon the will of A. But instead, if A gifted 1 lakh rupees to B and put a condition that he shall take back ten thousand rupees from it anytime he wants, is void and A shall get ninety thousand rupees only.

The gift of said ten thousand is void and that continue to belong to A as if it has not been gifted to B. Section 126 can't be read in isolation as it is controlled by section 10 of the transfer of property act which says that any stipulation completely restraining the done from transferring the gifted property is void.

Section 127 deals with the onerous gift. It stipulates that if the gift is in the form of a single transfer to the same person of several things of which one is, and the other not, burdened by an obligation, the done can take nothing by the gift unless he accepts the gift fully. For instance, A transferred thirty acres of land, a car, and a house to B. A had mortgaged the house before such transfer.

If B wants to accept the gift, he has to accept the whole, i.e, he has to accept the said 30 acres of land, car, and the house and he can't reject any of those gifts as they are in a single transfer. Here, he can't accept the thirty acres of land and car without accepting the house as those all are transferred to B in a single transfer.

Thus, it's not a prerequisite that a gift may always be purely beneficial but may at times be burdened with obligations. In that instance, one cannot approbate and reprobate the same transaction which means one cannot accept the beneficial part of the gift and rejecting the obligatory part of the transaction. Section 127 is based on a simple principle that one who wants the rose must not fair thorns, i.e., the donee has to elect. Either to accept the whole gift or he cannot accept anything at all.

The section also states that if the gift is in the form of two or more separate independent transfers of several things, the donee has the liberty to accept any one of them or reject some gifts. For instance, if A transfers thirty acres of land, car, and a mortgaged house in a separate and independent transfer to B, then B has the liberty to reject any one of them if he wants and accept others. He can accept the thirty acres of land and car without accepting the mortgaged house.

The section also states that if the done is a minor, he is not burdened by any such obligation until he attains the age of majority and chooses to retain the gift. If he chooses to retain the gift after he attains the age of eighteen, he shall be burdened with the obligation but if he relinquishes the gift, he shall not be liable for anything.

Section 128 deals with universal donee. It states that Universal donee is such a person who gets the whole property of the donor under a gift. Both movable, as well as immovable properties of the donor, are given in a gift to him. Section 128 states that when a person transfers all his properties to a person without consideration, such donee shall be personally liable for all the debts and liabilities of the donor.

For instance, A transfers all his moveable and immovable properties to B without consideration. A had a debt of five lakhs before such a transfer. Here, if B accepts the gift, B shall be personally liable to pay five lakhs rupees to A's creditors to discharge the debt of A as he has acquired all his properties and nothing is left to A to pay the debt. The purpose of this section is to protect the interest of the creditors. Hence, no one can escape from the liabilities by transferring the properties to someone.

For a person to be a universal donee, he should get all the properties of the donor, including moveable and immoveable properties and nothing should be left for the donor to pay his debts. If he has any other source or property to pay his debts, then the donee won't be universal donee and in such cases, he shall not be personally liable to pay the debts of the donor.

Conclusion
The transfer of property act mentions the concept of gift, how it should be transferred, obligations and rights of the parties, etc. It is important to execute a gift deed in compliance with the above-mentioned provisions as otherwise that you can't claim title to the property. The gift should be registered compulsorily if it is an immovable property and also should be attested by a minimum of two witnesses. The gift deed should be on stamp paper and get registered at a sub registrar's office.

The charge of stamp paper varies from state to state and the state government has to impose such charges. After the donor, donee, and the witnesses are signed, the register will attest to the gift deed. In case of any ambiguity or any adverse claims arises in the future concerning your property, you can prove your title by producing the registered gift deed in court.

References:
  1. Transfer of property act, 1882, Allahabad law agency: S.N. SHUKLA
  2.  https://www.legalserviceindia.com/legal/article-3484-gift-under-transfer-of-property-act.html
  3. Textbook on the transfer of property act: Dr. Avtar Singh, Prof(Dr) Harpreet Kaur
Written By: Prime Legal Law Firm
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