PRESTIGE INSTITUTE OF MANAGEMENT AND RESEARCH

DEPARTMENT OF LAW

SUBJECT: TRANSFER OF PROPERTY

TOPIC: ONEROUS GIFT

SUBMITTED TO: SUBMITTED BY:

ASST. PROF. DIVYANI SINGH BHARAT BHUSHAN SHUKLA

BA.LLB VII SEM
11110100194
 INTRODUCTION

Gift under Transfer of Property Act deals with section 122 to section 129. “ Gift” is the transfer
of certain existing movable or immovable property made violently and without consideration, by
one person, called Donor, to another, called the Donee and accepted by and behalf of the Donee.

Every transfer of property will take effect only when it is considered by both the parties.
However, gift is an exception to section 25 of Indian Contract Act, 1872. Where a contract or an
agreement without consideration is void to which gift is an exception. Gift is transfer of both
existing movable and immovable property with the transfer of ownership without consideration.
A gift can only be made in favour of an ascertainable person means it cannot be in favour of an
idol or public. Under the transfer of property act it is essential that gift must be accepted by the
done though it could not be necessary to be expressly accepted.

Essentials of Gift-

1) There must be two persons: to make a gift there must be two persons i.e. donor and the
donee. The donor must be of sound mind, competent to make a gift, must have attained
the age of majority, and should not be disqualified by law.

2) Gift should be made violently: Gift should be made out of free wish and will and it
should not be under any undue influence, coercion etc.

3) Transfer of ownership: When a gift is to be made, the property transfers with the transfer
of ownership with all the rights and liabilities.

4) Gift must be existing and transferable: Gift cannot be made of uncertain property or of
future property. The property must be existed and must be transferable.

5) Donor and Donee must be living: A gift is an intervivos i.e. between two living persons.
It is necessary that donor and donee must be living at the time of transfer and acceptance.
If the Donee dies before the acceptance then the gift become void.
 Onerous gifts

Onerous gift is defined under section 127 of Transfer of Property Act which stated that when a
gift is in a form of single transfer and is to be made to the same person with several things where
one or two can be and others are not, created a burden on the donee that the donee can take
nothing until he has accepted it fully.

Whereas, a gift is in a form of two or more separate transfers, which is made to the same person
with several things then in this situation a donee is under liberty to accept the one of them and
rejects the other.

Where a gift 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.

In case the donee dies during his minority, property passes to his heirs. The donor cannot take
back the gift on the ground of incompleteness as hweld in Subramania Ayyer vs Sitha Lakshmi1.

Illustrations

(a) Ram has shares in SATA, a prosperous joint stock company, and also shares in lakshman, a
joint stock company in difficulties. Heavy calls are expected in respect of the shares in SATA.
Ram gives lakshman all his shares in joint stock companies. Lakshman refuses to accept the
shares in SATA. He cannot take the shares in X.

(b) Bharat, having a lease for a term of years of a house at a rent which he and his representatives
are bound to pay during the term, and which is more than the house can be let for, gives to
Akshat the lease, and also, as a separate and independent transaction, a sum of money. Akshat
refuses to accept the lease. He does not by this refusal forfeit the money

1
ILR (1897) 20 mad 147.
PRINCIPLE INVOLVED

Onerous gift is based upon the maxim “Qui Sntit Commodum Sentire Debet Et Onus”. It means
that one who receives the advantage must have to bear the burden. This rule is analogous to the
doctrine of election2 and the donee here is really put to his election either to accept the whole gift
or not to accept anything at all. He has no right to pick up the benefit of the transaction and reject
it's burden.

The rule is analogous to the rule of election dealt with under section 35 of the Transfer of
property Act. The section stipulates that where an instrument confers benefit and through the
same transaction deprives the beneficiary of other property, the beneficiary cannot take benefit
without surrendering property.3

-: Onerous gift to the disqualified person.

When a donee is not competent to make a contract and accepted the property which is burdened
by and that time he is not bound by his obligation. But, as soon as he becomes competent to
make contract and being aware about his obligation, he can retain back his property and becomes
bound of it.

-: Onerous Gift when accepted by a minor

A minor, though not competent to contract , may be donee, but on attaining majority, he has the
right to repudiate the gift. If he attains the property, after attaining majority, he is estopped from
repudiating. In the case of gift the estoppel arises from the retention of property, and no doubt a
reasonable time would be allowed for repudiation. If a gift is complete during minority, and the
donee dies a minor his heir takes.

Section 127 throws light on the question of validity of transfer of property by gift to a minor. It
recognises minor’s capacity to accept the gift without intervention of guardian, if it is possible, ir
through him. The last part of section 127 clearly indicates that a minor donee, is competent to
accept a non onerous gift. Acceptance of a onerous gift, however cannot bind the minor. If he
2
Section 35 of Transfer of Property Act,1882

3
Cooper vs Cooper, 1874 (R) H.L 53.
accepts the gift during his minority of property burdened with obligation and on attaining
majority does not repudiate but retains it, he would be bound by the obligation attached to it.
Section 127 clearly recognises the competence of a minor to accept the gift. The provision of law
is clear and precedent clarify the position4

-: Where property is not burdened by an obligation

Where property is not burdened by an obligation, but the instrument of gift imposes a condition,
that the donee should discharge certain liabilities, the donee accepting the gift is bound to fulfil
the condition. In Panna lal v fulmoni5, Calcutta High court held that a deed of gift whereby
properties were transferred to the son by his deceased father, to provide maintenance to his
dependants, is not in any way repugnant to the inetrest created by the instrument and the
condition is valid and enforceable and not hit by the provisions of section 11. Therefore, the son
was held bound to maintain his step-mother under the express terms of the gift deed. It was a
case of an onerous gift.

Conclusion
4
Firm of Ganeshdas Bhiwaraj v. Suryabhan, (1977) XII Nag. L.R. 18.

5
AIR 1987 Cal. 763
Thus a gift may not always be of a purely beneficial character but may at time be burdened with
obligations e.g. when shares in company subjects to heavy calls formed the subject matter of the
gift . One cannot approbate and reprobate the same transaction . thus one cannot accept
beneficial part only by rejecting obligatory part of transaction.

S. 127 is based on simple principle that one who wants the rose must not fair thorns . The
donee has to elect or accept the whole gift or not to accept anything at all.

An onerous gift has both benefits and liabilities attached to it and it is upto the person recieving it
to accept or reject it in totality.