TOPIC ON THE PRESENTATION IS GIFT UNDER TPA

LAW IN TPA

1. GIFT UNDER TRANSFER OF PROPERTY ACT, 1882 PRESENTED BY Dr. Meenakshi SHARMA

2. GIFT : Introduction Section 122 to Section 129  contained in  Chapter VII  of Transfer of Property Act, 1882 deals with gifts. A gift is considered  a gratuitous transfer  as an existing property is transferred in favour of another person without consideration. A gift between  living persons is intervivos   (between the living) gift and it is a transfer of property within the meaning of  Section 5 of this Act. The following  gifts do not come  within the purview of this Act: Testamentary gift that is a gift by operation of law. A gift made in apprehension of death.

3. Section 122 of the Transfer of Property Act, 1882 A gift is defined in Section 122 of the Act, which reads 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.

4. Essentials of a valid gift 1. Transfer of Ownership A gift involves transfer of ownership as in this the whole interest of the person in the property is transferred in favour of another person. The person transferring the interest is known as the ‘donor’ and the person to whom the interest is transferred is known as the ‘ donee ’. The donor must be competent to contract; he must be major as well as of sound mind. The donee does not need to be competent to contract; a minor or a person of unsound mind though disqualified from entering into a contract is capable of receiving the property.

5. 2. Existing Property As per  Section 124  of this Act, the gifted property must be in existence at the time of making the gift, although its conveyance may take place either in future or in present. Both immovable and movable property may be gifted. A gift of a future property is Also, a gift comprising of both the existing and future property is void as to the future property. An actionable claim is an existing property, and it can be gifted. 3. Transfer Without Consideration An essential feature of a gift is that it must be gratuitous. Ownership must be transferred without any consideration. The word ‘consideration’ has been defined in Section 2(d) of the Indian Contract Act, 1872 (ICA) and is used in the same sense under the Transfer of Property Act, 1882. As per Section 2(d) of ICA, when, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise.

6. 4. Voluntary Transfer with Free Consent The gift must be made by the donor voluntarily, that is with his free will and consent. When the consent of the donor is not free that is the consent has been given due to coercion or undue influence, then the gift will  not be a valid gift. Section 15 and 16 of the Indian Contract Act, 1872 defines coercion and undue influence respectively. 5. Acceptance of Gift Acceptance of the gift by the donee is necessary and the acceptance may be  expressed or implied. When the donee is a minor or of unsound mind, then the gift must be accepted on his behalf by a competent person.

7. Modes of transfer Section 123  lays down two modes for effecting a gift depending on the nature of property.

8. Gift to Several Persons of Whom One does not Accept Gifts may be made to two or more persons For the validity of the gift, it is necessary that it must be accepted by all the donees . Section 125  provides that a gift of a thing to two or more donees , of whom one does not accept it, is void as to the interest which he would have taken had he accepted.

9. Suspension or revocation of gifts T he mere will of the donor is void wholly or partially as the case may be. It lays down two modes of revocation of gift which are as follows: Revocation by Mutual Agreement: 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 revoked or suspended. Revocation by Recission as in the Case of Contractors: A gift will be revoked if it was not made with the free consent of the donor. A gift may also be revoked in any of the cases in which if it were a contract, it might be rescinded. As per Section 19 of Indian Contract Act, 1872, a contract may be rescinded in case of coercion, undue influence, fraud and misrepresentation. Provisions of Section 126  do not apply to an incomplete gift , such a gift  can be revoked at any time.

10. Kinds of void gifts Void gifts may be divided into two types: Void Gifts Onerous Gifts

11. Void gifts The following gifts are included in the category of void gifts: Gifts depending on unlawful purposes. Gifts made upon a condition, the fulfillment of which is impossible or forbidden by law. Gifts by a person incompetent to contract. Where the donee of the gift dies before acceptance. A gift comprising of both the existing and future property is void as to the future property.

12. Onerous gifts A gift is said to be onerous when it is accompanied by a burden or obligation. This section is based on the maxim  ‘qui sentit commodum sentire debetet onus’  which means that he who receives advantage must also bear the burden. Section 127  of this Act deals with the concept of Onerous Gifts. It states 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 gift unless he accepts it fully . 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.

13. Universal Donee Section 128  deals with the concept of universal donee . It states that: Subject to the provisions of section 127, where a gift consists of the donor's whole property, the donee is personally liable for all the debts and liabilities of the donor at the time of the gift to the extent of the property comprised therein. Universal Donee is the person who gets the whole property (both movable and immovable) of the donor under a gift. Mortis Causa Section 129 deals with the Gifts which are made in contemplation of death and known as  donatis mortis causa.  Such gifts are exempted from the operation of chapter VII by virtue of Section 129. Another exemption is made in favour of gifts which are governed by Muslim personal law.

14. Muslim-gifts ( Hiba) These are governed by the rules of Muslim Personal Law. The only essential requirements are declaration, acceptance and delivery of possession. Registration is not necessary irrespective of the value of the gift. In case of a gift of immovable property worth more than Rupees 100, Registration under  Section 17  of the Indian Registration Act is must, as it is applicable to Muslims as well. For a gift to be  Hiba  only the donor is required to be Muslim, the religion of the donee is irrelevant.

15. CASE laws In Sahadev Vs. Shekh Papa (1905)29 Bom. P.119 , the Court held that for the gift of immovable property, registration of Gift Document is mandatory and it amounts to notice for a subsequent transfer and not for earlier transactions prior to registration. In D.N.Davar Vs. Ganga Ram Saran Dhama , AIR 1993 Del P.19 , the Court held that in case of a gift of immovable property, if the document is not registered, mere delivery of possession cannot pass a title to the donee . In Padma Chand v. Lakshmi Devi, 2010 (173) DLT 604 (Delhi) the Court held that gift is a voluntary transfer of property without consideration and parting by the owner of the property without any pecuniary benefit.

16. conclusion To constitute a transfer as a gift it must follow the provisions of the Transfer of Property Act. This Act extensively defines the gift itself and the circumstances of the transfer of such a gift. The gift, being a transfer of the ownership rights, must be in possession and ownership of the transferee and must be existing at the time of making the transfer. The transferor must be competent to make such transfer but the transferee may be any person. In case the transferee is incompetent to contract, the acceptance of gift must be ratified by a competent person on his/her behalf. Gift of future property is void. Partial acceptance of prosperous gifts and rejection of onerous gifts is not valid either. The acceptance of a gift entails the acceptance of the benefits as well as the liabilities coupled with such a gift. A gift may be revoked only by a mutual agreement on a condition by the donor and the donee , or by rescinding the contract pertaining to such gift. The Donations  mortis causa  and  Hiba  are the only two kinds of gifts which do not follow the provisions of the Transfer of Property Act.