Gifts under the Transfer of Property Act
Property Law · Unit IV · Topic 17 of 21 · 6 min read
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Cases checked to exist. Read the judgment before quoting a holding.
Every case cited here has been checked to exist — the citation resolves and names the right parties. The propositions attributed to each case have not been verified line by line against the judgment. Case names link through to the full judgment: read it before quoting a holding in an examination answer, and never carry a proposition from notes into court on trust.
1. Definition: section 122
Gift is the transfer of certain existing movable or immovable property made voluntarily and without consideration by one person, the donor, to another, the donee, and accepted by or on behalf of the donee. 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.
- Transfer of ownership. The donor parts with the whole of his interest. A gift of a limited interest (for example a life interest to one and the remainder to another) is possible, since the Act allows transfer of any interest.
- Existing property that the donor owns and can transfer.
- Without consideration. Love and affection is not consideration in money or money's worth. A transfer in return for anything of value is a sale or exchange. A gift subject to an obligation is still a gift (s.127).
- Voluntarily: by the donor's free will, without coercion, fraud or undue influence. A gift by an old or dependent donor to a person in a position to dominate his will is closely scrutinised.
- Acceptance by the donee or on his behalf, during the donor's lifetime and while he can still give. Acceptance may be express or implied from conduct, such as taking the deed or possession. A gift to a minor can be accepted by his guardian (and a gift to a minor is presumed accepted when beneficial).
2. How a gift is made: section 123
- Immovable property: the gift must be effected by a registered instrument signed by or on behalf of the donor and attested by at least two witnesses. This applies whatever the value. Oral gifts of immovable property are not recognised under the Act.
- Movable property: by such a registered instrument or by delivery. Delivery may be made in the same way as goods sold may be delivered.
Delivery of possession is not an essential of a gift of immovable property under the Act. In Renikuntla Rajamma v. K. Sarwanamma, 2014 INSC 492, (2014) 9 SCC 445, the donor executed a registered gift deed but reserved to herself the right to retain possession and enjoy the income during her lifetime. The Supreme Court held the gift complete and valid: s.123 replaces the old requirement of delivery with registration, and reserving a life interest does not make the transfer any less a gift of the property.
3. Gift of existing and future property: section 124
A gift comprising both existing and future property is void as to the latter. Future property cannot be gifted at all, because a gift is a present transfer and there is nothing yet to transfer. (A promise to give future property is unenforceable for want of consideration.) The gift of existing property in the same deed is good.
Gift to several, section 125. 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.
4. Suspension or revocation: section 126
A gift once complete cannot be taken back at the donor's whim. It may be suspended or revoked only in two cases:
- By agreement. Donor and donee may agree that on the happening of a specified event, which does not depend on the will of the donor, the gift shall be suspended or revoked. A gift which the parties agree shall be revocable wholly or in part at the mere will of the donor is void wholly or in part, as the case may be.
- By rescission. A gift may be revoked in any of the cases (save want or failure of consideration) in which, if it were a contract, it might be rescinded: fraud, coercion, undue influence, misrepresentation, mistake.
Nothing in the section affects the rights of a transferee for consideration without notice. Neglect of the donor by the donee is not, under the TPA, a ground of revocation. (Under s.23 of the Maintenance and Welfare of Parents and Senior Citizens Act, 2007, a transfer by a senior citizen subject to the condition that the transferee will provide for his basic needs may be declared void by the Tribunal if the transferee fails to do so.)
5. Onerous gifts: section 127
Where a gift is of several things under one transfer, of which one is burdened by an obligation and the others are not, the donee can take nothing by the gift unless he accepts it fully. He cannot take the benefit and refuse the burden. Where the gift is in the form of two or more separate and independent transfers, he may accept one and refuse the others. A donee not competent to contract and accepting property burdened by an obligation is not bound by his acceptance; but if, after becoming competent and knowing of the obligation, he retains the property, he becomes bound.
Example. A gives B shares in a profitable company and, in the same deed, shares in a company on which calls are unpaid. B cannot accept the first and refuse the second.
6. Universal donee: section 128
Where a gift consists of the donor's whole property, the donee is personally liable for all the debts due by, and liabilities of, the donor at the time of the gift, to the extent of the property comprised in it. The rule protects creditors, who would otherwise be left without assets.
7. Saving: section 129
Nothing in the chapter relates to gifts of movable property made in contemplation of death (donationes mortis causa), or affects any rule of Muhammadan law. A donatio mortis causa is governed by s.191 of the Indian Succession Act, 1925; it is made in expectation of death from an existing illness, is revocable, and fails if the donor recovers. A Muslim gift (hiba) is valid orally and needs declaration, acceptance and delivery of possession; s.123 does not apply to it.
8. Problem
F, aged 80, executes and registers a gift deed of his house in favour of his son S, reserving the right to live in it for life. S accepts. A year later F, displeased with S, executes a “revocation deed” and gifts the house to his daughter.
Issue. Was the gift to S complete, and can F revoke it?
Law. Sections 122, 123, 126; Renikuntla Rajamma.
Application. The deed was registered, attested and accepted. Reservation of a life right of residence does not defeat the gift. The deed contains no agreed condition for revocation, and F alleges no fraud, coercion or undue influence; displeasure is not a ground under s.126.
Conclusion. The gift to S is complete and the unilateral revocation is void; the later gift to the daughter passes nothing. F could succeed only by proving a ground of rescission, or, if the gift was conditional on S maintaining him and S failed, by applying under s.23 of the 2007 Act.
How this is examined
Ten marks: “Define gift and explain its essentials” or “When can a gift be revoked?” Short notes: onerous gift; universal donee; gift of future property; donatio mortis causa. Compare with hiba where the question allows.
Now try the real questions: Property Law past question papers.