1.

Introduction to Gift

The Transfer of Property Act 1882 is an Indian legislation which regulates the
transfer of property in India. It contains specific provisions regarding what constitutes a
transfer and the conditions attached to it. 1

According to the Act, 'transfer of property' means an act by which a person conveys the
property to one or more persons, or himself and one or more other persons. The act of
transfer may be done in the present or for the future. The person may include an
individual, company or association or body of individuals, and any kind of property may
be transferred, including the transfer of immovable property.

The object of the Transfer of Property Act is to define and amend law relating to
Transfer of Property by act of parties and not to transfer by operation of law. A Transfer
of Property is a contract hence all necessary requirements to constitute valid contract
are to be fulfilled.

The Act contemplates the following kinds of transfers: Sale, Mortgage, Lease
Exchange, and Gift. Sale is an out-and-out transfer of property. In mortgage, there is a
transfer of limited interest in property. A lease is a transfer of a right to enjoy immovable
property for a certain time or in perpetuity. Exchange is like a sale, but differs from it as
regards the consideration. In sale, the consideration is money, while in exchange, the
consideration is another thing. In a gift, there is no consideration.

A gift is generally considered as the exchange or transfer of ownership of any property

from one person to another where the sender willingly transfers his/her property to the
receiver without any compensation i.e., without considering any monetary value. A gift is
often called a form of reward. It may be given by sender to receiver during any events
like Weeding Ceremony, Birthday Party etc.

1
Transfer of Property Act, Section 5

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 2. Meaning and Definition
The term “Gift” is considered as the transfer of property in the eye of law. Without
proper giving and taking process between donor and done, the legal aspects of a gift
will be collapsed.

According to Section 122 of Transfer of Property Act,1882 -“A Gift is the transfer of
certain existing movable or immovable property made voluntarily and without
consideration, by one person, called the donor or guarantor or sender, to another, called
the donor, and accepted by or on behalf of the donee or guarantee or receiver.” Any gift
may be void and suspended if the rules and regulations of giving and taking a gift are
not observed properly. For Example: If the receiver or donee of any gift dies before
accepting it although the sender or donor have done proper intention and delivery to
give that gift to the donee then that gift may be void by law because of lack of
acceptance of the done.

Every transfer of property will take effect only when it is considered by both the
parties2. 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..

2
Indian Contract Act 1872, Section 25

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 3. Essential elements or Conditions of a gift

1st. Absence of Consideration:

A gift should be legally approved when the donor or guarantor gives the gift to the
donee or gurantee without any consideration i.e., without taking any compensation or
monetary value. Example: Mr. X wants to gift his private car to his employee Mr. Y for
his good job performance without taking any cash or monetary value for that car.

It is required to be a voluntary transfer of property to another made gratuitously and

without consideration. This section applies to those gifts that are gifts inter vivos or an
absolute gift. Property under the above section can be both moveable or immoveable
but however have to be tangible in nature. In order to constitute a valid gift, there must
be an existing property as already earlier elaborated.

This is an absolutely important requirement that the transfer must occur without any
consideration. Even a negligible property or very small sum of money given by the
transferee in consideration of a transfer of ownership in a big property would make the
transfer either sale or exchange. The consideration must be pecuniary. Mutual love and
affection is not is not a pecuniary consideration. Property transferred in consideration of
love or affection is a transfer without consideration, and hence a gift3.

3
Munni Devi VS Chhoti, AIR 1983 All. 444

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2nd. Gift must be given voluntarily:-

In this section the word 'voluntarily' bears its ordinary popular meaning. It
denoting the exercise of the unfettered free will, and not its technical meaning of 'without
consideration'. When a gift is made, it must satisfactorily appear that the donor knew
what he was doing and understood the contents of the instrument and its effect, and
also that undue influence or pressure was not exercised upon clear intention to make an
out-and-out gift, but the intention has failed for want of transfer or any other cause, the
courts will not convert what was meant to be an out-and-out gift into a trust, and the
donor will not be deemed a trustee of the property for the intended donee. The gift will
fail.

Where the husband deposited certain ornaments with a bank for safe custody in the
joint names of himself and his wife, with direction to be delivered to be either or survivor,
it did not amount to a gift, as the husband retained dominion over the property. Where a
person keeps money to fixed deposit in the name of his niece, brought up and given in
marriage by him, there is an inference of gift in favour of the niece. The burden of
proving that the gift was made voluntarily with free consent of donor, lies on the donee.4

Where the motive behind the deed of gift was unequivocal to give the transferee a title
which would act as a safeguard against any claim for pre-emption, the transaction for
that reason cannot be called a sale. Similarly where a person settles an annuity upon
his alleged wife, the settlement cannot be construed to be a contract for consideration of
love and affection, but is a gift pure and simple.

4
Ajmer singh VS Aatma Singh, AIR1985 P&H 315

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3rd . Acceptance of Gift:-

The gift must be accepted by the donee or by someone on his behalf. An offer without
acceptance by the donee cannot complete the gift. Acceptance may be inferred from
acts prior to the execution of the deed of gift. Mere silence may sometimes indicate
acceptance provided the donee knows about the gift, slighest evidence of acceptance
being sufficient.5

Even when a gift is made by a registered instrument, the same has to be accepted by or
on behalf of the donee to make it complete, failing which the gift will be bad, because it
so provides in sec. 122. What the law requires is acceptance of the gift after its
execution, though the deed may not be registered. Anterior negotiations or talks about
the gift would not amount to acceptance. Person accepting gift on behalf of the minors
appended his thumb-impression on the deed in token of acceptance. It was held that
the gift was complete. Acceptance must be essentially made before the death of the
donor. There must be something shown to indicate an acceptance. The acceptance
may be signified by an overt act such as the actual taking of possession of the property,
or such acts by the donee as would in law amount to taking possession of the property
where the property is not capable of physical possession. Acceptance may be implied,
but the rule of implied acceptance ought not to be extended so far as to hold that the
acceptance will be presumed unless dissent is shown. Acceptance will be presumed if
there is possession, actual or on the parties where some right, interest, profit or benefit
accrues to one party, or some forbearance, detriment, loss, or responsibility is given,
suffered or undertaken by the other. There is nothing in section 122 of the transfer of
property Act to show that the acceptance under this section should be express. The
acceptance may be inferred, and it may be proved by the donee's possession of the
property, or even by the donee's possession of the deed of gift.

5
Indrasan Singh VS Yudhishtir Singh, AIR 2008 NOC 1649

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4th . Existing Property:-

Gift must be made of existing movable or immovable property and the same should be
capable of being transferred. The property which is to be acquired by the donor in future
cannot be transferred therefore the donor can transfer only that property of which he is the
absolute owner and the property which is in existence on the day of transfer by way of gift by
the donor to the donee.

5th . Parties:-

There are two parties to the transfer of property by the mode of Gift. The person who makes
the gift is called "donor" and the person in whose favour the gift is made is called the "donee".
Moreover, the donor should be competent to make a gift. A person who is not competent to
contract cannot gift his property. It has been further held that a guardian of the property of a
minor cannot make a transfer of the property without the permission of the court and if he
exceeds his power by executing a gift of the property of minor then the same would be void.
The donor must be either the owner of the property or be should be authorized by the owner
to execute a valid gift of the property, otherwise the gift would be invalid. Hon'ble Supreme
Court has held that donee can even be a minor.6

6
K. Balakrishnan v. K. Kamalam, AIR 2004 SC 1257

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 4. Modes of Transfer of a gift

Section 123 of the Transfer of property Act provides for the requirements that are
essential for completion of a gift. Unless and until these legal requirements are not met
with, the done has no legal title as regards property gifted by donor and consequently
the gift is not enforceable by law. This section provides for two modes for making a gift,
depending upon the nature of the property. In case of gift of movable property, the gift
can be effected by delivery of possession of the same, whereas in case of immovable
property, registration is essential for transfer of an immovable property by way of a gift.

Movable Property:-

The registration for the gift of an immovable property is essential irrespective of its
valuation. The Supreme Court has held that in the absence of written instrument
executed by donor, attestation by two witnesses, registration of the same and
acceptance thereof by the donee, the gift of immovable property is not complete.

Immovable Property:-

In case of gift of movable properties, registration is not compulsory rather the same
isoptional. The gift of movable property is completed by delivery of the possession of
the gifted property.

As per Section 33 of the sale of Goods Act, 1930 the mode of delivering the property to
the donee depends upon the nature of the property. The only requirement is that the
donee should get the title as well as the possession of the gifted property in case of
movable property.

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 5. Revocation or Suspension of Gifts:
According to Section 126 Transfer of Property Act, a gift may be suspended or revoked.
Section 126 further provides for two modes of revocation of gift which are as under :

• Revocation of gift by mutual consent of the donor and the done

. • Revocation by rescission as in the case of contracts. Prima Facie gift is a contract

between both the parties and if they agree that it would be revoked on the happening of
an event, the gift will be revoked on the happening of such an event. Similarly, since gift
is voluntary transfer of ownership of property in favour of donee by the donor, therefore,
if it could be proved that the gift was not made voluntarily by the donor, then the gift
must be revoked. Gift is always preceded by an express implied contract i.e. offer by the
donor and acceptance by the donee. Therefore, if the preceding contract itself is
rescinded then there is no question of taking place of gift under it.

Section 126 of the Transfer of Property provides for conditions where a gift may be
revoked.the following are those conditions-

(1) That the donor and donee must have agreed that the gift shall be suspended or
revoked on the happening of a specified event;

(2) such event must be one which does not depend upon the donor's will;

(3) the donor and donee must have agreed to the condition at the time of accepting the
gift; and

(4) the condition should not be illegal, or immoral and should not be repugnant to the
estate created under the gift. Section 126 is controlled by sec. 10. As such, a clause in
the gift deed totally prohibiting alienation is void in view of the provisions contained in
sec. 10. A gift, which was not based on fraud, undue influence or misrepresentation nor
was an onerous one, cannot be cancelled unilaterally. Such a gift deed can be
cancelled only by resorting to legal remedy in a competent court of law.

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 Conclusion

When a person acquires or owns an immovable property, the law also give him/her the
right to use, lease, sell, rent or transfer/gift of the land. The owner also has a right to
mortgage his immovable property as a security for loans. However, there are some laws
which restrict the type of use a land can be put to, e.g., a land may be used only for
residential or commercial purposes to prevent haphazard/unorganized growth of cities
and towns. Laws in some of the States prevent/restrict outsiders from acquiring property
within the State. Restrictions are also placed on non-agriculturists from acquiring
agricultural land.

The conception of the term gift and subject matter of gift has been an age old and
traditional issue which has developed into a distinct facet in property law.. In considering
the law of gifts, it is to be remembered that the English word 'gift' is generic and must
not be confused with the technical term of Islamic law, hiba. The concept of hiba and
the term "gift as used in the transfer of property act, are different. The English law as to
rights in property is classified by a division on the basis of immoveable and moveable
(real and personal) property. The essential elements of a gift are (a) The absence of
consideration; (b) the donor; (c) the donee ;(d) the subject-matter; (e) the transfer; and
the acceptance.

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 Bibliography

1. The transfer of property Act by Dr RK Sinha

2. Legal Service India- Gift under TPA
3. Scribd- Gifts and Modes of Transfers

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