Gifts

A gift is the transfer of certain existing moveable or immoveable property, made voluntarily and without consideration, by one person (donor) to another (donee), and accepted by or on behalf of the donee (S.122). The essential elements are: voluntary transfer, without consideration, and acceptance.

Why: A gift differs from sale (no consideration) and from will (takes effect during donor's lifetime, not after death). The requirement of acceptance ensures the donee consents property cannot be thrust upon an unwilling person.

Legal Framework

Essential Elements (S.122)

Mode of Gift (S.123)

Why (registration for immoveable): Gifts of immoveable property are irrevocable and high-value. Registration ensures: (a) evidence of the transaction, (b) protection against fraud/forgery, (c) public notice. For moveables, physical delivery achieves the same certainty.

Types of Gifts

Onerous Gift (S.127)

If a gift carries an obligation (e.g., mortgaged property, property with attached liability), the donee who accepts the gift MUST bear the obligation. A donee cannot take the property and reject the burden.

Example: Father gifts his flat to son. The flat has an outstanding home loan of Rs. 15 lakhs. Son accepts the gift. Son must now bear the Rs. 15 lakh loan obligation. He cannot say "I accept the flat but reject the mortgage."

Revocation of Gift (S.126)

Why: Gifts are irrevocable because once the donee accepts, the property BELONGS to the donee. The donor's ownership has ended. Allowing revocation at will would make all gifts insecure. Only a pre-agreed condition or mutual consent can undo a completed gift.

Illustrations

1. Valid gift of immoveable property: Mother executes a registered gift deed transferring her flat to daughter. Two neighbours attest as witnesses. Daughter accepts by signing the deed. Gift complete. Mother cannot revoke even if daughter later displeases her.

2. Invalid gift (no registration): Father writes on plain paper: "I gift my house to my son" and hands over the keys. This is NOT a valid gift of immoveable property S.123 mandates a registered instrument + 2 witnesses. The unregistered writing cannot transfer title. Son has possession but no ownership.

3. Gift of moveable (delivery suffices): Grandmother gives her gold necklace (Rs. 3 lakhs) to granddaughter by handing it over and saying "this is yours." Valid gift under S.123 delivery of possession is sufficient for moveables. No registration needed.

4. Onerous gift: Uncle gifts a commercial building (worth Rs. 1 crore) to nephew. The building has a mortgage of Rs. 30 lakhs outstanding. Nephew accepts. Under S.127, nephew bears the Rs. 30 lakh mortgage. Nephew cannot enjoy the Rs. 1 crore building while refusing to pay the Rs. 30 lakh debt.

5. Conditional revocation (valid): Father gifts a plot to son with registered condition: "If son uses the plot for illegal activities, the gift shall stand revoked." Son opens a gambling den. Father invokes the condition. Revocation valid under S.126 the condition was agreed at the time of gift.

6. Revocation for ingratitude (NOT valid): Father gifts flat to son. Son neglects father in old age. Father tries to revoke. Under TPA (unlike Muslim law), ingratitude is NOT a ground for revocation. Gift is irrevocable. Father has no remedy under property law (may have remedy under Maintenance and Welfare of Parents Act, 2007 for maintenance, but cannot recover the flat).

Recall Check

1. What three elements must be present for a valid gift under S.122?
2. What is the mode prescribed by S.123 for gift of immoveable property?
3. Under what circumstances can a completed gift be revoked (S.126)?

Key Cases

K. Balakrishnan v. K. Kamalam (2004) K-Balakrishnan-v-K-Kamalam-2004 Issue: Whether acceptance by the donee is essential for a valid gift, and whether acceptance can be implied. Rule: S.122 mandates acceptance by or on behalf of the donee during the donor's lifetime. Acceptance may be express or implied from conduct (e.g., taking possession, exercising ownership rights). Held: A gift deed executed and registered by the donor is incomplete without donee's acceptance. However, acceptance can be inferred from conduct donee's name in mutation records, payment of taxes, or exercise of ownership.

Kalyanasundaram v. Kasiammal (1994) Kalyanasundaram-v-Kasiammal-1994 Issue: Whether an unregistered gift deed of immoveable property has any legal effect. Rule: S.123 mandates registration for gift of immoveable property. An unregistered gift deed is void and confers no title. Held: An unregistered gift deed of immoveable property is a nullity. It cannot pass title, and possession without registration does not cure the defect. Registration is mandatory, not optional.

Distinctions

Flashcards

Q: How does S.122 define a gift? A: Transfer of certain existing moveable or immoveable property, made voluntarily and without consideration, by one person to another, accepted by or on behalf of the donee.

Q: What is the mode for gift of immoveable property (S.123)? A: Registered instrument signed by donor, attested by at least 2 witnesses.

Q: What is the mode for gift of moveable property (S.123)? A: Delivery of possession (or registered instrument either suffices).

Q: Can a completed gift be revoked under the TPA? A: Only if: (1) a condition for revocation was agreed at the time of gift (S.126), or (2) by mutual consent. Donor's change of mind or ingratitude is NOT a ground.

Q: What is an onerous gift (S.127)? A: A gift that carries an obligation or burden. The donee who accepts must bear the burden (e.g., gift of mortgaged property donee bears the mortgage).

Q: Is acceptance essential for a gift? A: Yes. Under S.122, the donee must accept during the donor's lifetime and while the donor is competent. Without acceptance, the gift is incomplete.

Q: Can future property be gifted? A: No. S.124: a gift of property that the donor does not possess at the time is void. Only existing property can be gifted.

Q: Define "gift" under S.122. A: Transfer of certain existing movable or immovable property, made voluntarily and without consideration, by one person to another, and accepted by or on behalf of the donee.

Q: What two formalities does S.123 require for gift of immovable property? A:

• (1) Registered instrument signed by the donor
• (2) Delivery of possession (attested by two witnesses).

Q: Can a gift of future property be made? A: No. S.124 provides that a gift of future property is void.

Q: When can a gift be revoked under S.126? A: Only when the gift deed contains a condition for revocation that is (a) agreed between donor and donee, and (b) not dependent on the donor's will alone.

Q: What is an onerous gift? A: S.127: a gift subject to an obligation (e.g., property carrying a mortgage); donee who accepts must fulfill the obligation.

Q: Can a minor be a donee? A: Yes. A gift to a minor is valid and is accepted by the minor's guardian.

Exam Scenario

A, an elderly father, executes a registered gift deed transferring his only house to his son B. The deed is attested by two witnesses. B accepts and gets his name mutated in revenue records. Two years later, A and B have a dispute. A seeks to revoke the gift, arguing B is ungrateful and neglectful. Advise A.

Approach: (1) S.122: gift complete voluntary transfer + no consideration + acceptance (mutation = implied acceptance per Balakrishnan, 2004). (2) S.123: registered deed + 2 witnesses = valid mode for immoveable property. (3) S.126: once accepted, a gift cannot be revoked UNLESS a condition for revocation was agreed at the time of gift. (4) No such condition exists here. (5) "Ingratitude" and "neglect" are NOT grounds for revocation under the TPA (unlike Muslim law). (6) A cannot recover the house through property law. (7) A's alternative remedy: file under the Maintenance and Welfare of Parents and Senior Citizens Act, 2007. Under S.23, if a senior citizen transferred property by gift subject to the condition that the transferee shall provide basic amenities, and the transferee fails to do so, the transfer is deemed voidable at the option of the transferor. If A can prove that the gift was conditional on B providing maintenance/care (implied or express), the Tribunal under the 2007 Act can declare the transfer void. (8) If no such condition existed: A has no remedy to get the house back. The gift is irrevocable.

Problem: Mrs. Sharma executes a registered gift deed gifting her flat to her son Rohit. Rohit is abroad and does not take possession. Two years later, Mrs. Sharma gifts the same flat to her daughter Priya through another registered gift deed. Priya takes possession immediately. Rohit returns and claims the flat. Advise on:

• (a) whether the first gift to Rohit was complete without delivery of possession

• (b) whether Mrs. Sharma could gift the same property to Priya

• (c) who has better title.

Illustrations (from consolidated notes)

1. Valid gift (immovable): Father executes a registered gift deed transferring his house to daughter. Daughter accepts and takes possession. Gift is complete and irrevocable. Father cannot later revoke.

2. Invalid gift (unregistered): Uncle writes a letter: "I am giving you my flat as a gift." No registered instrument is executed. Under S.123, a gift of immovable property without a registered instrument is void (no matter how clear the intent).

3. Conditional gift (valid revocation): A gifts his car to B with a condition: "If B fails his final exam, the car returns to A." B fails. A can reclaim the car. The condition is independent of A's will and was agreed upon.

4. Future property (void under S.124): A says "I gift to you the house I will buy next year." This is void under S.124 because the property does not exist at the time of gift.

5. Onerous gift (S.127): A gifts a house to B. The house carries a mortgage debt of Rs.10 lakhs. If B accepts the gift, B must take the house subject to the mortgage (B bears the debt). B cannot take the house and repudiate the mortgage.