Introduction

A Gift is generally regarded as a transfer of ownership of a property where

the sender willingly brings into effect such transfer without any compensation
or consideration in monetary value. It may be in the form of moveable or
immoveable property and the parties may be two living persons or the
transfer may take place only after the death of the transferor. When the
transfer takes place between two living people it is called inter vivos, and
when it takes place after the death of the transferor it is known as
testamentary. Testamentary transfers do not fall under the scope of Section
5 of the Transfer of Property Act, and thus, only inter vivos transfers are
referred to as gifts under this Act.

Gift
Section 122 of Transfer of Property Act defines a gift as the transfer of an
existing moveable or immovable property. Such transfers must be made
voluntarily and without consideration. The transferor is known as the donor
and the transferee is called the donee. The gift must be accepted by the
donee.

Parties to a gift transfer

Donor
The donor must be a competent person, i.e., he must have the capacity as
well as the right to make the gift. If the donor has the capacity to contract
then he is deemed to have the capacity to make the gift. This implies that at
the time of making a gift, the donor must be of the age of majority and must
have a sound mind. Registered societies, firms, and institutions are referred
to as juristic persons, and they are also competent to make gifts. Gift by a
minor or insane person is void.

Donee
Donee does not need to be competent to contract. He may be any person in
existence at the date of making the gift. A gift made to an insane person, or a
minor, or even to a child existing in the mother’s womb is valid subject to its
lawful acceptance by a competent person on his/her behalf. Juristic persons
such as firms, institutions, or companies are deemed as competent donee
and gift made to them is valid. However, the donee must be an ascertainable
person. The gift made to the general public is void. If ascertainable, the
donee may be two or more persons.
Essential elements
There are the following five essentials of a valid gift:

1. Transfer of ownership
2. Existing property
3. Transfer without consideration
4. Voluntary transfer with free consent
5. Acceptance of the gift

Transfer of ownership
The transferor, i.e., the donor must divest himself of absolute interest in the
property and vest it in the transferee, i.e., the donee. Transfer of absolute
interests implies the transfer of all the rights and liabilities in respect of the
property. To be able to effect such a transfer, the donor must have the right
to ownership of the said property.

Existing property
The property, which is the subject matter of the gift may be of any kind,
movable, immovable, tangible, or intangible, but it must be in existence at
the time of making a gift, and it must be transferable within the meaning
of Section 5 of the Transfer of Property Act.

Gift of any kind of future property is deemed void. And the gift of spes
successionis (expectation of succession) or mere chance of inheriting
property or mere right to sue, is also void.

Transfer without consideration

A gift must be gratuitous, i.e., the ownership in the property must be
transferred without any consideration. Even a negligible property or a very
small sum of money given by the transferee in consideration for the transfer
of a very big property would make the transaction either a sale or an
exchange. Consideration, for the purpose of this section, shall have the same
meaning as given in Section 2(d) of the Indian Contract Act.

Voluntary transfer with free consent

The donor must make the gift voluntarily, i.e., in the exercise of his own free
will and his consent as is a free consent. Free consent is when the donor has
the complete freedom to make the gift without any force, fraud coercion, and
undue influence. Donor’s will in executing the deed of the gift must be free
and independent. Voluntary act on a donor’s part also means that he/she has
executed the gift deed in full knowledge of the circumstances and nature of
the transaction. The burden of proving that the gift was made voluntarily with
the free consent of the donor lies on the donee.

Acceptance of gift
The donee must accept the gift. Property cannot be given to a person, even
in gift, against his/her consent. The donee may refuse the gift as in cases of
non-beneficial property or onerous gift. Onerous gifts are such where the
burden or liability exceeds the actual market value of the subject matter.
Thus, acceptance of the gift is necessary. Such acceptance may be either
express or implied.

Where the donee is incompetent to contract, e.g., minor or insane, the gift
must be accepted on his behalf by a competent person. The gift may be
accepted by a guardian on behalf of his ward or by a parent on behalf of their
child. In such a case, the minor, on attaining majority, may reject the gift.

Where the donee is a juristic person, the gift must be accepted by a

competent authority representing such legal person. Where the gift is made
to a deity, it may be accepted by its agent, i.e., the priest or manager of the
temple.

Section 122 provides that the acceptance must be made during the lifetime
of the donor and while he is still capable of giving. The acceptance that
comes after the death or incompetence of the donor is no acceptance. If the
gift is accepted during the life of the donor but the donor dies before the
registration and other formalities, the gift is deemed to have been accepted
and the gift is valid.

Modes of making a gift

Section 123 of the Transfer of Property Act deals with the formalities
necessary for the completion of a gift. The gift is enforceable by law only
when these formalities are observed. This Section lays down two modes for
effecting a gift depending upon the nature of the property. For the gift of
immovable property, registration is necessary. In case the property is
movable, it may be transferred by the delivery of possession.

Immovable properties
In the case of immovable property, registration of the transfer is necessary
irrespective of the value of the property. Registration of a document including
gift-deed implies that the transaction is in writing, signed by the executant
(donor), attested by two competent persons and duly stamped before the
registration formalities are officially completed.

In the case of Gomtibai v. Mattulal, it was held by the Supreme Court that in
the absence of written instrument executed by the donor, attestation by two
witnesses, registration of the instrument and acceptance thereof by the
donee, the gift of immovable property is incomplete.

Movable properties
In the case of movable properties, it may be completed by the delivery of
possession. Registration in such cases is optional. The gift of a movable
property effected by delivery of possession is valid, irrespective of the
valuation of the property. The mode of delivering the property depends upon
the nature of the property. The only things necessary are the transfer of the
title and possession in favour of the donee. Anything which the parties agree
to consider as delivery may be done to deliver the goods or which has the
effect of putting the property in the possession of the transferee may be
considered as a delivery.

Actionable claims
Actionable claims are defined under Section 3 of the Transfer of Property Act.
It may be unsecured money debts or right to claim movables not in
possession of the claimant. Actionable claims are beneficial interests in
movable. They are thus intangible movable properties. Transfer of actionable
claims comes under the purview of Section 130 of the Act. Actionable claims
may be transferred as gift by an instrument in writing signed by the
transferor or his duly authorised agent. Registration and delivery of
possession are not necessary.

A gift of future property

Gift of future property is merely a promise which is unenforceable by law.
Thus, Section 124 of the Transfer of Property Act renders the gift of future
property void. If a gift is made which consists of both present as well as
future property, i.e., one of the properties is in existence at the time of
making the gift and the other is not, the whole gift is not considered void.
Only the part relating to the future property is considered void.

A gift made to more than one donee

Section 125 of the Act says that in case a property is gifted to more than one
donee, one of whom does not accept it, the gift, to the extent of the interest
which he would have taken becomes void. Such interest reverts to the
transferor and does not go to the other donee.

A gift made to two donees jointly with the right of survivorship is valid, and
upon the death of one, the surviving donee takes the whole.

Provisions relating to onerous gifts

Onerous gifts refer to the gifts which are a liability rather than an asset. The
word ‘onerous’ means burdened. Thus, where the liabilities on a property
exceed the benefits of such property it is known as an onerous property.
When the gift of such a property is made it is known as an onerous gift, i.e., a
non-beneficial gift. The donee has the right to reject such gifts.

Section 127 provides that if a single gift consisting several properties, one of
which is an onerous property, is made to a person then that person does not
have the liberty to reject the onerous part and accept the other property. This
rule is based upon the principle of “qui sentit commodum sentire debet et
onus” which implies that the one who accepts the benefit of a transaction
must also accept the burden of it. Thus, when two properties, one onerous
and other prosperous, are given in gift to a donee in the same transaction,
the donee is put under the duty to elect. He may accept the gift together with
the onerous property or reject it totally. If he elects to accept the beneficial
part of the gift, he is bound to accept the other which is burdensome.
However, an essential element of this Section is a single transfer. Both the
onerous and prosperous properties must be transferred in one single
transaction only then they require the obligation to be accepted or rejected in
a joint manner.

In case the onerous gift is made to a minor and such donee accepts the gift,
he retains the right to repudiate the gift on attaining the age of majority. He
may accept or reject the gift on attaining majority and the donor cannot
reclaim the gift unless the donee rejects it on becoming a major.

Universal donee
The concept of universal donee is not recognised under English law, although
universal succession, according to English law is possible in the event of the
death or bankruptcy of a person. Hindu law recognises this concept in the
form of ‘sanyasi’, a way of life where people renounce all their worldly
possessions and take up spiritual life. A universal donee is a person who gets
all the properties of the donor under a gift. Such properties include movables
as well as immovables. Section 128 lays down in this regard that the donee is
liable for all the debts and liabilities of the donor due at the time of the gift.
This section incorporates an equitable principle that one who gets certain
benefits under a transaction must also bear the burden therein. However, the
donee’s liabilities are limited to the extent of the property received by him as
a gift. If the liabilities and debts exceed the market value of the whole
property, the universal donee is not liable for the excess part of it. This
provision protects the interests of the creditor and makes sure that they are
able to chase the property of the donor if he owes them.

Suspension or revocation of gifts

Section 126 of the Act provides the legal provisions which must be followed in
case of a conditional gift. The donor may make a gift subject to certain
conditions of it being suspended or revoked and these conditions must
adhere to the provisions of Section 126. This Section lays down two modes of
revocation of gifts and a gift may only be revoked on these grounds.

Revocation by mutual agreement

Where the donor and the donee mutually agree that the gift shall be
suspended or revoked upon the happening of an event not dependent on the
will of the donor, it is called a gift subject to a condition laid down by mutual
agreement. It must consist of the following essentials:

 The condition must be expressly laid down

 The condition must be a part of the same transaction, it may be laid
down either in the gift-deed itself or in a separate document being a
part of the same transaction.
 The condition upon which a gift is to be revoked must not depend
solely on the will of the donor.
 Such condition must be valid under the provisions of law given for
conditional transfers. For eg. a condition totally prohibiting the
alienation of a property is void under Section 10 of the Transfer of
Property Act.
 The condition must be mutually agreed upon by the donor and the
donee.
 Gift revocable at the will of the donor is void even if such condition is
mutually agreed upon.

Revocation by the rescission of the contract

Gift is a transfer, it is thus preceded by a contract for such transfer. This
contract may either be express or implied. If the preceding contract is
rescinded then there is no question of the subsequent transfer to take place.
Thus, under Section 126, a gift can be revoked on any grounds on which its
contract may be rescinded. For example, Section 19 of the Indian Contract
Act makes a contract voidable at the option of the party whose consent has
been obtained forcefully, by coercion, undue influence, misrepresentation, or
fraud. Thus, if a gift is not made voluntarily, i.e., the consent of the donor is
obtained by fraud, misrepresentation, undue influence, or force, the gift may
be rescinded by the donor.

The option of such revocation lies with the donor and cannot be transferred,
but the legal heirs of the donor may sue for revocation of such contract after
the death of the donor.

The limitation for revoking a gift on the grounds of fraud, misrepresentation,

etc, is three years from the date on which such facts come to the knowledge
of the plaintiff (donor).

The right to revoke the gift on the abovementioned grounds is lost when the
donor ratifies the gift either expressly or by his conduct.