Saturday, September 15, 2012

Gift of Immovable Property

What is gift? Gift is the transfer of ownership without consideration. The property must be in existence at the date of making of the gift and it must be transferable within the meaning of section 5 of the Transfer of  Property Act, 1882.
Section 122 of the Transfer of Property Act defines gift as follows :
"Gift" 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.
Acceptance when to be made - Such acceptance may be made during the lifetime of the doner and while he is still  capable of giving.
If the donee dies before acceptance, the gift is void.

Transfer how effected - Section 123 of the Transfer of Property Act read as follows :
"For the purposes of making a gift of immovable property, the transfer must be effected by a registered instrument signed by or on behalf of the donor, and attested by at least two witnesses".
The second requirement is there must be acceptance of the gift by the donee. When a gift is not an Onerous  (burden sum section 127) mere handing over of document by the donee himself/herself is sufficient to prove the valid acceptance.
When gift may be suspended or revoked?
Gift of immovable property may be revoked under section 126 of the Transfer of Property Act. Section 126 lays down two modes of revocation of gift.
First one is revocation by mutual agreement of donor and donee e.g. A gives a field to B, reserving to himself with B's assent, the right to take back the field in case B and his descendants die before A. B dies without descendants in A's lifetime, A may take back the field.
Second one is revocation by rescission as in the case of contracts.
According to Section 19 of the Indian Contract Act which is read as "where consent to an agreement is caused by coercion, undue influence, fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so obtained". Therefore, where the gift is not made voluntarily because of any of the factors mentioned under Section 19 of the Indian Contract Act, the gift may be revoked by the doner.
The condition revoking the gift must be expressly laid down in the gift-deed and it must be valid under the provisions of law given for conditional transfers as laid down under Sections10 to 34 of the Transfer of Property Act.
In Mool Raj vs. Jamna Devi &others, the Himachal Pradesh High Court in 1995 held that since the condition of revocation of gift upon donee's failure to render services to donor was not laid down in the deed, it was unconditional gift and, therefore, cannot be revoked by the doner.
In 2001, the Apex Court in Thakur Raghunath jee Maharaj &other vs. Ramesh Chandra, held that even though a condition is not laid down in the gift deed itself, and has been provided under a mutual agreement separately but forms part of the transaction of gift, the condition would be valid and enforceable.

Whether doner may revoked a gift after delivery of deed and before registration?
In Kalyansundaram Pillai vs. Karuppa Mooppanar(AIR 1927 PC 42), Lord Salvesen held as follows:  "....when the instrument of gift has been handed by the donor to the donee and accepted by him, the former has done everything  in his power to complete the donation and to make it effective Registration does not depend upon his consent, but is the act of an officer appointed by law for the purpose, who, if the deed is executed by or on behalf of the doner and is attested by at least two witness, must register it if it is presented by a person having the necessary interest within the prescribed period. Neither death, nor the express revocation by the donor, is a ground for refusing registration, if the other condition are complied with....&quot.

Disclaimer- All the contents are only for general information or use. Consult your lawyer before acting.

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