Giving a gift may seem simple, but legally transferring ownership of property as a gift involves specific rules. Without meeting these requirements, a gift can be declared invalid, causing confusion or disputes. This post explains the essential legal conditions that make a gift valid under the law, focusing on the transfer of movable and immovable property.
What Is a Gift Under the Law?
Requisites of a valid gift:
Section 122 of T.P.Act defines a gift. 'It is the transfer of certain existing movable or immovable property made voluntarily and without consideration and accepted by or on behalf of the donee'.
The person who makes the gift is the donor.
The donee must accept the gift:
a) during the life time of the donor and
b) While the donor is still capable of giving the property gifted. But if the donee dies before acceptance the gift is void.
Gift of movable property may be registered or may be effected by delivery. However gift of immovable property of any value requires registration under sections 17 (a) of the Registration Act. It must be signed by the donor and must be attested by two witnesses.
- Gift to God Almighty may be oral or may be in writing or may be registered.
- A makes a gift of his jewels to B. This may be done by delivery.
- A makes a gift of a piece of land worth Rs.50/-. This is to be registered.
- The property must be existing at the time of the gift. A gift of future property is void. When a gift is made to several persons and one or more donees does not accept, then it is void respect of those who do not accept.
Revocation of gift:
(i) Conditional gifts: The fundamental rule is that 'A resumable gift is not a gift at all.' A gift once given cannot be revoked at the mere will of the donor; such a gift if made, is void ab initio. But, a conditional gift is void.A conditional gift which attaches a condition subsequent is valid if the condition is not vague or illegal or immoral or opposed to public policy or impossible of performance. Hence conditional gifts may be made.
Ex.: A gifts to B a plot of land, reserving to himself with the consent of B, to take back the plot if B or his descendants die before A. B dies without any descendants during A's life time. The condition is valid and A may take back the plot.
b) A make a gift to C, a concubine, for her continued relation ship with the donor. The condition is immoral therefore gift is void. c) A gives Rs. 1 lakh to B reserving to himself with B's consent,the right to take Rs. 25,000 at his pleasure. Gift is valid upto Rs.75,000/ - only. It is void in respect of Rs.25,000/-.
(ii) Gift made under coercion, fraud undue influence or misrepresentation may be revoked by the donor. Protection of Transferees: Transferees who take the property for consideration and without notice are protected against any prejudice that may result due to revocation by the donor.
The leading case is: Allcard Vs. Skinner A, a sister executed a gift to S, the lady superior under undue influence. Later A sued to set aside the gift. A would have won but there was too much of delay is suing. Hence, her claim was dismissed.
Onerous Gift :
Section 127 of T.P.Act deals with onerous gift. It means a single transfer made to the donee but some of the properties gifted are burdened by obligations. The donee must take the entire gift. If he accepts only to take those which are without obligations, then the gift is void. But if the gift is in two or more separate and distinct transactions, the donee may select at his liberty and refuse those which are not beneficial to him.
Eg. : A gifts in one transaction, 200 shares of X & Co. a prosperous company and also 100 shares of Y & Co. a company in difficulties. Heavy calls are expected from Y & Co. A may take the entire gift. He is a onerous donee. He cannot take the gift of the shares of X & Co. only. A minor may repudiate the onerous gift after attaining majority. Effect of Onerous gift: The donee is liable to the extent of the total gifted property in his hands.
Universal Donee:
Here a gift of the entire property of the donor is made to a donee. The donee is liable for all the debts, dues and liabilities of the donor at the time of the gift. This liability extends to the extent of the property in the hands of the donee. Such a person who takes the entire rights and liabilities is called a universal donee. Property means here movable and immovable. If A makes a gift of his immovables only and not movables to B, B is not a universal donee. The universal donee is liable only to the extent of the immovable and movable property comprised in the gift. The liability is with reference to the tune of gift by the donor, that is universal donee is not liable for debts & liabilities incurred by the donor after the universal gift is made.
How Gifts of Movable and Immovable Property Differ
The law treats movable and immovable property differently when it comes to gifts.
Gifts of Movable Property
Movable property includes items like jewelry, vehicles, money, or furniture. Gifts of movable property can be made in two ways:
- Delivery: Physically handing over the item to the donee.
- Registration: In some cases, registration may be done but is not mandatory.
For example, handing over a car key and the car documents to the donee can complete the gift of a vehicle.
Gifts of Immovable Property
Immovable property refers to land, buildings, or any property attached to the earth. The law requires strict formalities for gifts of immovable property:
- The gift must be registered under the Registration Act.
- The gift deed must be signed by the donor.
- The deed must be attested by at least two witnesses.
Registration ensures the gift is legally recorded and protects the rights of both parties. Without registration, the gift of immovable property is not valid, regardless of other conditions.
Practical Examples of Valid and Invalid Gifts
Example 1: Valid Gift of Movable Property
A mother gives her son a gold necklace by handing it over to him during her lifetime. The son accepts the necklace. This is a valid gift because:
- The necklace exists.
- The transfer is voluntary and without payment.
- The son accepts the gift.
- The mother is capable of giving the gift.
Example 2: Invalid Gift Due to Lack of Acceptance
A father promises to gift his house to his daughter but dies before she accepts the gift. Since acceptance did not happen during the father’s lifetime, the gift is void.
Example 3: Invalid Gift of Immovable Property Without Registration
A person writes a gift deed for a plot of land but does not register it. The donee takes possession, but the gift is not legally valid because registration is mandatory for immovable property.
Why These Legal Requirements Matter
Summary
A valid gift requires:
- Transfer of existing property
- Voluntary transfer without consideration
- Acceptance by the donee during the donor’s lifetime
- Donor’s capacity to give the gift
- Registration for gifts of immovable property, signed and witnessed
Understanding these rules helps avoid legal complications and ensures that gifts are honored as intended. If you plan to give or receive a gift, especially of immovable property, consult legal advice to follow the proper steps.
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