GIFT UNDER

TRANSFER OF
PROPERTY ACT 1882
What is a gift?
• Transfer of ownership of a property where sender willingly transfer without any compensation in monetary value.
• It may be moveable or immoveable.
• The transfer occurs between two living persons or after the death of transferor.
• When the transfer takes place between two living persons, it’s called “inter vivos”.
• When transfer takes place after death of transferor, it’s called “testamentary”.
• Only “inter vivos” fall under the scope of section 5 of the transfer of property act.
Parties involved in a gift transfer
DONOR:
• Must be competent, have sound mind and be at the age of majority.
• Must have the capacity and right to make a gift.
• Juristic persons (registered societies, firms & institutions) are also competent to make gifts.
• Gift my minor or insane person is a void.
• The right of donor is determined by ownership rights in the property at the time of transfer.
• Only “inter vivos” fall under the scope of section 5 of the transfer of property act.
DONEE:
• No need for donee to be competent to contract.
• A gift made to an insane or minor or a child in mother’s womb is lawfully acceptable which is collected by a competent
person on his/her behalf.
• Juristic person are deemed as competent donee.
• The donee must be ascertainable.
• The gift made to general public is void.

Essentials of a gift
TRANSFER OF OWNERSHIP:
• Transfer of absolute interests implies the transfer of all rights and liabilities in respect of property.
• Nothing less than ownership may be transferred by way of gift.
• Transfer of gifts also has certain conditions.
EXISTING PROPERTY:
• The property ,may be of any kind, must be in existence at the time of making a gift.
• The gift must be transferable under section 5 of transfer of property act.
• Any kind of future property, inheriting property is deemed void as a gift.
TRANSFER WITHOUT COSIDERATION:
• A gift must be transferred without any consideration.
• Even if a small amount of money is used by the transferee to transfer negligeable or big property, it is then considered as a sale or
exchange.
• Consideration shall have same meaning as giving in section 2 (d) of the Indian contract act.
• The consideration is pecuniary in nature.
• Property transferred in consideration of love and affection is considered as a gift.
• A transfer of property made in consideration for services rendered by a donee is a gift.
• Property transferred in consideration of donee undertaking liability of donor is not a gift.
VOLUNTARILY TRANSFER WITH FREE CONSENT:
• The donor must make the gift voluntarily.
• Donor’s will in executing the deed of gift must be free and independent.
• The burden of proving that the gift was made voluntarily with free consent of donor lies on donee.
ACCEPTANCE OF GIFT:
• The donee must accept the gift.
• The donee may refuse the gift in case of non beneficial property or onerous gifts.
• When the donee takes possession of the property or of the title deeds, there is acceptance of gift.
• Where the property is on lease, acceptance may be inferred upon the acceptance of the right to collect rents.
• When the property is jointly enjoyed by the donor and donee, mere possession cannot be treated as evidence of acceptance.
• When the gift is not onerous, even minimal evidence is sufficient to prove that gift has been accepted by Donee.
• Mere silence of the donee is indicative of the acceptance provided it can be established that the donee had knowledge of the gift being
made in his favour.
Modes of making a gift
• Section 123 of the transfer of the property act deals with the formalities necessary for the completion of a gift.
• The section lays down to modes depending upon the nature of the property.
• For immovable property, registration is necessary.
• For movable property, it may be transferred by the delivery of possession.
• Mode of transfer of various types of properties are:
IMMOVEABLE PROPERTIES:
• In this case transfer of property is necessary irrespective of the value of property.
• It is considered officially completed when the transaction is in writing, signed by the donor, attested by two competent persons and
duly stamped before the registration.
• E.g: In the case of Gomtibai V. Maltulal, it was held by the Supreme Court that in the absence of written instrument executed by the
donor, attestation by two witnesses, resgistration of the instrument and acceptance thereof by the donee, the gift of immovable
property is incomplete.
MOVEABLE 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 affected 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 favor of the donee.
Actionable claims
• They are defined under Section 3 of the transfer of property act.
• Transfer of actionable claims comes under the purview of section 130 of the act.
• It may be unsecured money debts or right to claim moveables not in possession of the claimant.
• They are thus intangible movable properties.
• They may be transferred as gift by an instrument in writing signed by the transferrer or his duly authorised agent.

A gift of future
• Registration and delivery of possession are not necessary.
property
• Section 124 of the transfer of property act renders the gift of future property void.
• If the gift consist of both present and future property then the whole gift is not considered void. Only the part with future property is
considered as void.

A gift made to more than one Doonee

• Under section 125 of the act, in case a property is gifted two 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 transferrer and does not go to the other doonee.
• A gift made to two donnies jointly with the right of survivorship is valid, and upon the death of one, the surviving donee takes the
whole.
Revocation of gifts
• In case of conditional gift, section 126 of the act must be followed.
• The section 126 lays down to modes of revocation of gifts which are as follows:
REVOCATION BY MUTUAL AGREEMENT:
• In this case the donor and the donee mutually agree that the gift shall be suspended or revoked upon the happening of an event.
• It is not dependent on the will of the donor.
• It is called a gift subject to work condition laid down by mutual agreement.
• It must consist of following essentials:
i. The condition must be expressly laid down.
ii. 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.
iii. The condition upon which a gift is to be revoked must not depend solely on the will of the donor.
REVOCATION BY RECISSION OF CONTRACT:
• Gift is a transfer, it is thus preceded by a contract for such transfer.
• Under section 126, a gift can be revoked on any grounds on which its contract may be rescinded.
• 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 gift on the grounds of fraud is three years from the date on which facts come to the knowledge of the
donor.
 • E.g: section 19 of the Indian contract act makes a contract voidable at the option of the party whose consent has been obtained
forcefully. In this case gift maybe rescinded by the donor.

Conclusions
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 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 transferrer 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.