INDORE INSTITUTE OF LAW

(Affiliated to D.A.V.V. & B.C.I., an Autonomous Law College with NAAC A+ Grade)

Session 2023-2024
Date – 11/01/2024

B.A.LL.B. (Hons)
Semester- VII semester

Assignment 01: - Research paper presentation

Topic- A study of the provisions of Gift under the Transfer of

Property Act, of 1882

NAME OF STUDENT NAME OF FACULTY

ZIA ALI KHAN
AND ROMI RATHORE ASST. PROF. AAYESHA SHEIKH

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 CERTIFICATE

This is to Certify That Zia Ali Khan and Romi Rathore of B.A.LL.B. & 7th Semester has
Successfully Completed the Research Work on A study of the provisions of Gift under the
Transfer of Property Act, of 1882, Partial fulfilment of Requirements for the Knowledge
given by Asst. Prof. Aayesha Sheikh Prescribed by Indore Institute of Law. This Assignment
is the record of authentic work carried out during the Academic Year 2023-24.

Teacher’s signature

Date

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 DECLARATION

We hereby declare that the project work entitled A study of the provisions of Gift under the
Transfer of Property Act, of 1882 submitted for fulfilling the essential criteria of the Indore
Institute of Law is a record of an original work done by me under the guidance of Asst. Prof.
Aayesha Sheikh is in B.A.LL.B. 7th semester, Indore Institute of Law for the academic
session 2023-24.

Name- Zia Ali Khan

and Romi Rathore

B.A.LL.B.

7th semester

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 ACKNOWLEDGEMENT

We, Zia Ali Khan and Romi Rathore students of B.A.LL.B. & 7th Semester would like to
express our special thanks of gratitude to our professor and guide Asst. Prof. Aayesha Sheikh
gave us the golden opportunity to do this wonderful assignment on the topic A study of the
provisions of Gift under the Transfer of Property Act, of 1882. We are sincerely grateful to
my teacher for guiding us and providing the relevant information thus helping me to complete
the project successfully. We would also like to give a hearty thanks to our parents who
supported us morally as well as economically in the completion of this assignment without
any type of problem. We would like to appreciate and thank all our friends and alma maters
for helping us in every possible manner in the way of completing our project. Last but not least
We want to thank the almighty who made everything possible.

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RESEARCH METHODOLOGY

The research methodology applied during this project is the belief associate degree informative
study is employed to seek out underlying principles; the information would be in the main
collected from secondary sources of data. These can embody books, journals, and the web.
Keeping this insight, the man of science has passed through completely different books,
journals, internet references, E-journal, reports, etc. The relevant material is collected from
secondary sources. Materials and knowledge square measure collected from each legal source
like books. This project is based on secondary sources that embody each written and non-
printed material. Written material includes articles and newspapers, whereas non-printed
materials embody knowledge obtained from online materials.

SOURCES

This project is primarily based on secondary sources that include both printed and non-printed
materials. Printed material includes articles and newspapers, whereas non-printed materials
include data obtained from online materials.

MODE OF CITATION

The Rules of Citation as prescribed by the 20th edition of Bluebook.

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Table of Contents
ABSTRACT............................................................................................................................ 7
INTRODUCTION ................................................................................................................... 7
WHAT MAY BE REFERRED TO AS A GIFT ....................................................................... 8
Gift ...................................................................................................................................... 8
Mt. Brij Devi v. Shiva Nanda Prasad & Ors (1939): an analysis ....................................... 9
PARTIES TO A GIFT TRANSFER....................................................................................... 13
Donor ................................................................................................................................ 13
Donee ................................................................................................................................ 13
ESSENTIAL ELEMENTS .................................................................................................... 14
Transfer of ownership ........................................................................................................ 15
Existing property ............................................................................................................... 15
Transfer without consideration ........................................................................................... 15
Voluntary transfer with free consent .................................................................................. 16
ACCEPTANCE OF GIFT ................................................................................................. 17
MODES OF MAKING A GIFT ............................................................................................. 18
Immovable properties ........................................................................................................ 18
Movable properties ............................................................................................................ 19
Actionable claims .............................................................................................................. 19
A gift of future property..................................................................................................... 19
A gift made to more than one donee ................................................................................... 20
PROVISIONS RELATING TO ONEROUS GIFTS ............................................................... 20
UNIVERSAL DONEE .......................................................................................................... 20
SUSPENSION OR REVOCATION OF GIFTS ..................................................................... 21
Revocation by mutual agreement ....................................................................................... 21
REVOCATION BY THE RESCISSION OF THE CONTRACT........................................ 22
BONAFIDE PURCHASER ................................................................................................... 22
Exceptions ......................................................................................................................... 22
CONCLUSION ..................................................................................................................... 23

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ABSTRACT

The Transfer of Property Act, of 1882, governs the transfer of property in India. The Act lays
down the rules and regulations governing the transfer of immovable property, which includes
land, buildings, and any other structure that is attached to the land. In this context, gifts are an
important aspect of the transfer of property. A gift is a transfer of property made voluntarily
and without consideration. It is a transfer of property that is made by the donor to the donee,
without any expectation of receiving something in return. The Transfer of Property Act has
specific provisions relating to gifts of immovable property.

INTRODUCTION

A Gift is generally regarded as a transfer of ownership of a property where the sender willingly
brings into effect such transfer without any compensation or consideration in monetary value.
It may be in the form of moveable or immovable property and the parties may be two living
persons or the transfer may take place only after the death of the transferor. When the transfer
takes place between two living people it is called inter vivos, and when it takes place after the
death of the transferor it is known as testamentary. Testamentary transfers do not fall under the
scope of Section 5 of the Transfer of Property Act, and thus, only inter vivos transfers are
referred to as gifts under this Act.

If the essential elements of the gift are not implemented properly it may become revoked or
void by law. There are many provisions for the gifts. All such provisions, for example, types
of property which may be gifted, modes of making such gift, competent transferor, suspension
and revocation of gift, etc.1

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 WHAT MAY BE REFERRED TO AS A GIFT

Gift

Section 122 of the Transfer of Property Act defines a gift as the transfer of an existing moveable
or immovable property. Such transfers must be made voluntarily and without consideration.
The transferor is known as the donor and the transferee is called the donee. The gift must be
accepted by the donee. This Section defines a gift as a gratuitous transfer of ownership in some
property that already exists. The definition includes the transfer of both immovable and
moveable pro

1
https://lddashboard.legislative.gov.in/actsofparliamentfromtheyear/transfer-property-act-1882

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Mt. Brij Devi v. Shiva Nanda Prasad & Ors (1939): an analysis

One of the few essentials of a Gift is, that in the event of a transfer, there must be a transference
of all the rights in the property by the donor to the donee; however, it is also permissible to
make conditional gifts. Such a clause is governed by Section 126 of the Act.

To delve into the issue, we must refer to the first important pre-independence judgment of the
Allahabad High Court, where the subject matter of the dispute is the same as our concern. In
the case of Mt. Brij Devi v. Shiva Nanda Prasad & Ors (1939)2, Brij Devi had claimed
possession of a land which had formed the focus of a gift deed executed by her ancestors on
11th December 1914, in favour of one Jain Bulaqi Shankar. According to a certain gift deed, a
property was gifted to Pt. Jain Bulaqi Shankar with the condition that he constructs a temple
and a residential quarter for his occupation. The donee was not allowed to transfer or mortgage
the property and if he did, the transfer would be invalid, and the gift would be revoked by the
donors or their successors. However, Jain Bulaqi failed to fulfil the conditions mentioned in
the gift deed and instead transferred the property to someone else in 1927. The plaintiffs alleged
that this transfer was in contravention of the conditions mentioned in the gift deed, and they
had the right to declare it invalid and take back possession of the land.

The defendants put forth an argument that the transfer of land through a gift deed was an
absolute transfer to Jain Bulaqi. However, the transfer came with a condition restraining the
transferee and his successors from parting with or disposing of their interest in the property,
which is repugnant to the Transfer of Property Act. As per Section 10 of the Act, an absolute
restraint on the transferee by the transferor is void. This means that the condition restraining
the alienation is void, while the transfer of the property itself is valid. The defendants' argument
relied on Section 10 of TPA, stating that such a restraint on the land was void and the contract
should be treated as an unequivocal transfer of the land to the donee.

Moreover, because the condition was void, the transfers in favour of Shiva Nanda Prasad were
valid and could not be set aside, nor were the plaintiffs entitled to revoke the gift deed. The
plaintiffs then took the defence of Section 126 of the Transfer of Property Act and contested
that the transfer was not void as per the mentioned section. The section essentially means that
the donor and donee can agree upon happening of certain conditions, when the condition is not
fulfilled, the gift can be revoked. The plaintiffs argued that the right to revoke the gift was

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CIVIL APPEAL NO.1209 OF 2020

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 contingent upon the alienation by the donee of the land gifted and not upon the will of the
donor.

The plaintiffs supported this claim by citing the case of Makund Prasad v. Rajrup
Singh (1907)3, in which the court held that a gift of property made on the condition that the
land would be liable to be taken back in the event of its Alienation, was valid and the power of
revocation was not repugnant to the original transfer under Section 10.

The court in this case rightfully upheld the defendant's claim and ruled that the gift deed cannot
be revoked by the successors of the ancestor who had made the gift deed in favour of Jain
Bulaqi as the transfer was uncountable in the first place as it restricted the donee completely to
alienate such property. This was the first major judgment which rightfully upheld the donee’s
claim and rightfully interpreted the law relating to sections 10 and 126, however the thing to
note in this judgment was the lower appellant court had ruled in favour of the plaintiffs and the
high court had overturned the decision which is a usual trend which we see in cases relating to
the issue of our paper. Even after such a judgment, we see cases relating to the same issue
where the lower and high court’s decision is overturned in the Supreme Court. In the case
of Sridhar vs N. Revanna (2000)4, which is a case of February 2020, out of the many issues in
the suit, the same issue, that is, whether a gift deed can be revoked under Section 126 if such
property is alienated had been raised in the Supreme Court once again for which the court had
to adjudicate the matter. In this case, one Shri Muniswamappa, great-grandfather of the
plaintiffs and grandfather of defendant No.1, was the absolute owner of the suit schedule
property who executed gift deeds in favour of the defendants with the same condition that the
property should not be alienated and if such property was to be alienated, then the gift deed
stands invalid. The defendants on the other hand had sold the property which they had received
as a gift to which the plaintiffs alleged that such a transfer was invalid as the gift deed
specifically stated that the mentioned property was not to be alienated and the plaintiffs
demanded the property to be transferred to them back.

The High Court in this case too decided that the condition of the gift deed was not fulfilled and
thus ruled that the sale made by the donee was invalid and the property was to be returned, but
the Supreme Court in this too cited the ruling held in the case of Mt. Brij Devi v. Shiva Nanda
Prasad & Ors (1939) and overturned the High court’s decision and ruled that the gift deed

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4 ALJ 7084 CIVIL APPEAL NO.1209 OF 2020 (arising out of SLP (C) No. 7493 of 2014)

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cannot be revoked as at the very inception of the gift deed, the donee was completely restricted
to alienate such property which is prohibited by Transfer of Property Act under section 10.

For an issue that has been a settled law as per the 1939 judgment of the Allahabad High Court,
it is important to analyze what is making the courts interpret such laws in different manners
and why are the higher courts being time and again invoked to settle such disputes. Firstly we
would look at the way Section 126 is drafted in the Transfer of Property Act and also the
placement of such a section would be beneficial for an in-depth analysis. Section 126 reads
as: “donor and donee may agree that on the happening of any specified event which does not
depend on the will of the donor, a gift shall be suspended or revoked; but 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.”

The wording of this section is quite generic and allows a donor to impose certain conditions
while gifting property to a donee. If the donee fails to fulfil or abide by these conditions, the
donor can revoke the gift deed, not based on their will, but subject to the unfulfilled condition.
This section is a conditional clause, and it appears in the chapter of Gifts under Section 122 of
the Transfer of Property Act. Chapter 2 of the Act imposes certain restrictions on property,
while the chapter of Gifts is a separate chapter that deals specifically with gifting property.

The law seems to be unclear on what happens if there are complete restrictions on the alienation
of the property. When courts deal with such matters, they look at the placement of the
conditional clauses. If the conditional clause is already present in the chapter, the courts tend
to think that the gifts are to be governed only by the set conditions made in the gift deed.
Furthermore, the courts interpret that if such a conditional clause is present in the chapter 'of
gifts,' there must be a legislative intent behind this structuring, and the chapter must be looked
at separately from other chapters, specifically Section 10, which is limited in its scope. The
illustrations provided in Section 126 are silent on such conditions, which adds to the court's
misinterpretation.

The first illustration provided in the section is contingent upon the death of B and his
descendants, but the donee is not restricted from alienating the property in the first place. The
second illustration provided also does not talk about the alienation issue rather it clarifies that
if an amount of 100 is gifted to someone by the donor and with both the donor's and donee’s
assent, they agree that Rs 10 can be asked back at any time, this shows that the actual gift was
of Rs 90 only as the donee has to return the Rs 10 to the donor back, that is, that amount of Rs

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10 is inalienable. The second illustration is somewhat related to the issue at hand but because
it is talking about a movable gift, that is, in cash, the courts tend to think that this may apply to
only movable gifts as we cannot gift land in such a way. Thus, due to the absence of such clarity
on the issue, the court thinks that the act is silent in the issue at hand and they tend to give
different rationales and rule that the property which forms the centre of a gift deed can be
revoked if the condition of alienation is not abided by the donee.

This interpretation or perception of the courts is wrong as section 10 of the act is part of chapter
2, that is, ‘of transfers of property by act of Parties’ which is a general section and must apply
to all the chapters of the Act as it defines the ‘action’ of the parties per se which is void in the
eyes of law. Needless to mention, Parties of any transaction are an essential element for a
transaction to take place, thus a specific chapter has been created by the Act which gives some
clarity of what actions of the parties entering into the transaction are good or bad in law. If
there was a legislative intent for a gift to be governed only by the conditions of the gift deed,
that is, section 126 of the Transfer of Property Act and section 10 would not apply to such
conditions, then such an exception would be specifically mentioned in section 10 of the Act
just like a mortgage, which has been specifically excluded in section 10 of the Act. Thus,
reading into the issues where the act appears to be silent as section 126 and section 10 are a
part of different chapters is the wrong approach that is often followed by the court which leads
to wrong judgments time and again. The same logic of the free market that is used to defend
the creation of section 10 of the Act can also be extended to this issue as well. The main reason
for which such a section, that is, section 10 was created was to not allow accumulation of the
property. People in India hold a lot of sentimental value towers the land and property they own
and subsequently, the ancestors do not want their future generations to alienate such property.

To counter such a problem, that is, a property does not start limiting to one family lineage; such
a section was created and is still needed as the exclusion of such a section would pull us back
to the zamindari system as was prevalent in India a few years back. Moreover when a gift deed
is revoked the government too is not benefitted from this transfer in terms of taxes. A gift deed
in the first place executed does not attract any tax but there is a change in ownership as there
is a change in title of the property and when such a gift deed is revoked, there will be again a
change in the title and ownership which would not attract any tax as the property which was
owned by the donor at some time is being handed back to him by way of revocation, thus two
transfers of title are made and the taxable amount is none on the property which is something
not beneficial for a new democracy to progress. Moreover, the legal maxim, “alienation rei

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prefecture juri crescendi” meaning that Law favours Alienation instead of Accumulation can
be extended to the issue at hand and by way of alienation of the gifted property, even the
government could benefit from the amount of taxes that would be charged by way of transfer
of such property to a third person.

PARTIES TO A GIFT TRANSFER

Donor

The donor must be a competent person, i.e., he must have the capacity as well as the right to
make the gift. If the donor can contract then he is deemed to have the capacity to make the gift.
This implies that at the time of making a gift, the donor must be of the age of majority and must
have a sound mind. Registered societies, firms, and institutions are referred to as juristic
persons, and they are also competent to make gifts. A gift by a minor or insane person is void.
Besides capacity, the donor must also have the right to make a gift. The right of the donor is
determined by his ownership rights in the property at the time of the transfer because a gift
means the transfer of the ownership.

Donee

Donee does not need to be competent to contract. He may be any person in existence at the
date of making the gift. A gift made to an insane person, a minor, or even to a child existing in
the mother’s womb is valid subject to its lawful acceptance by a competent person on his/her
behalf. Juristic persons such as firms, institutions, or companies are deemed as competent
donee and the gift made to them is valid. However, the donee must be an ascertainable person.
The gift made to the general public is void. If ascertainable, the donee maybe two or more
persons.

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ESSENTIAL ELEMENTS

There are the following five essentials of a valid gift:

1. Transfer of ownership

2. Existing property

3. Transfer without consideration

4. Voluntary transfer with free consent

5. Acceptance of the gift

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Transfer of ownership

The transferor, i.e., the donor must divest himself of absolute interest in the property and vest
it in the transferee, i.e., the donee. Transfer of absolute interests implies the transfer of all the
rights and liabilities in respect of the property. To be able to effect such a transfer, the donor
must have the right to ownership of the said property. Nothing less than ownership may be
transferred by way of gift. However, like other transfers, the gift may also be made subject to
certain conditions.

Existing property

The property, which is the subject matter of the gift may be of any kind, movable, immovable,
tangible, or intangible, but it must be in existence at the time of making a gift, and it must be
transferable within the meaning of Section 5 of the Transfer of Property Act.

Gift of any kind of future property is deemed void. And the gift of spes
successionis (expectation of succession) or mere chance of inheriting property or mere right to
sue, is also void.

Transfer without consideration

A gift must be gratuitous, i.e., the ownership of the property must be transferred without any
consideration. Even a negligible property or a very small sum of money given by the transferee
in consideration for the transfer of a very big property would make the transaction either a sale
or an exchange. Consideration, for this section, shall have the same meaning as given in Section
2(d) of the Indian Contract Act. The consideration is pecuniary, i.e., in monetary terms. Mutual
love and affection are not pecuniary considerations and thus, property transferred in
consideration of love and affection is a transfer without consideration and hence a gift. A
transfer of property made in consideration for the ‘services’ rendered by the donee is a gift.
But, a property transferred in consideration of donee undertaking the liability of the donor is
not gratuitous, therefore, it is not a gift because liabilities evolve pecuniary obligations.

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 Voluntary transfer with free consent

The donor must make the gift voluntarily, i.e., in the exercise of his own free will and his
consent as is free consent. Free consent is when the donor has the complete freedom to make
the gift without any force, fraud coercion, or undue influence. The donor’s will in executing
the deed of the gift must be free and independent. A voluntary act on a donor’s part also means
that he/she has executed the gift deed in full knowledge of the circumstances and nature of the
transaction. The burden of proving that the gift was made voluntarily with the free consent of the donor
lies on the donee.

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ACCEPTANCE OF GIFT

The donee must accept the gift. Property cannot be given to a person, even as a gift, against
his/her consent. The donee may refuse the gift as in cases of non-beneficial property or onerous
gift. Onerous gifts are such where the burden or liability exceeds the actual market value of the
subject matter. Thus, acceptance of the gift is necessary. Such acceptance may be either express
or implied. Implied acceptance may be inferred from the conduct of the donee and the
surrounding circumstances. When the donee takes possession of the property or the title deeds,
there is acceptance of the gift. Where the property is on a lease, acceptance may be inferred
upon the acceptance of the right to collect rents. However, 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 the gift has been
accepted by the donee. Mere silence of the donee is indicative of the acceptance provided it
can be established that the donee knew the gift being made in his favour.

Where the deed of gift categorically stated that the property had been handed over to the donee
and he had accepted the same and the document is registered, a presumption arises that the
executants are aware of what was stated in the deed and also of its correctness. When such
presumption is coupled with the recital in the deed that the donee had been put in possession
of the property, the onus of disproving the presumption would be on the donor and not the
donee.

Where the donee is incompetent to contract, e.g., minor or insane, the gift must be accepted on
his behalf by a competent person. The gift may be accepted by a guardian on behalf of his ward
or by a parent on behalf of their child. In such a case, the minor, on attaining majority, may
reject the gift.

Where a donee is a juristic person, the gift must be accepted by a competent authority
representing such a legal person. Where the gift is made to a deity, it may be accepted by its
agent, i.e., the priest or manager of the temple.

Section 122 provides that the acceptance must be made during the lifetime of the donor and
while he is still capable of giving. The acceptance that comes after the death or incompetence
of the donor is no acceptance. If the gift is accepted during the life of the donor but the donor

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dies before the registration and other formalities, the gift is deemed to have been accepted and
the gift is valid.

MODES OF MAKING A GIFT

Section 123 of the Transfer of Property Act deals with the formalities necessary for the
completion of a gift. The gift is enforceable by law only when these formalities are observed.
This Section lays down two modes for effecting a gift depending upon the nature of the
property. For the gift of immovable property, registration is necessary. In case the property is
movable, it may be transferred by the delivery of possession. The mode of transfer of various
types of properties is discussed below:

Immovable properties

In the case of immovable property, registration of the transfer is necessary irrespective of the
value of the property. Registration of a document including a gift deed implies that the
transaction is in writing, signed by the executant (donor), attested by two competent persons
and duly stamped before the registration formalities are officially completed. In the case
of Gomtibai v. Mattulal5, it was held by the Supreme Court that in the absence of a written
instrument executed by the donor, attestation by two witnesses, registration of the instrument
and acceptance thereof by the donee, the gift of immovable property is incomplete.

The doctrine of part performance does not apply to gifts therefore all the conditions must be
complied with. A donee who takes possession of the land under an unregistered gift deed cannot
defend his possession on being evicted. The following must be kept in mind regarding the
requirement of registration:

 Registration of the gift of immovable property is a must, however, the gift is not
suspended till registration. A gift may be registered and made enforceable by law even
after the death of the donor, provided that the essential elements of the gift are all
present.

 In case the essential elements of a valid gift are not present, the registration shall not
validate the gift.

It has been observed by the courts that under the provisions of the Transfer of Property Act,
Section 123, there is no requirement for delivery of possession in case of an immovable gift.
5
Civil Appeal No. 1519(N) of 1980
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 The same has been held in the case of Renikuntla Rajamma v. K. Sarwanamma6 that the mere
fact that the donor retained the right to use the property during her lifetime did not affect the
transfer of ownership of the property from herself to the donee as the gift was registered and
accepted by the donee.

Movable 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 effected 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 favour of the donee. Anything which the parties agree to consider as
delivery may be done to deliver the goods or which has the effect of putting the property in the
possession of the transferee may be considered as a delivery.

Actionable claims

Actionable claims are defined under Section 3 of the Transfer of Property Act. It may be
unsecured money debts or the right to claim movables not in possession of the claimant.
Actionable claims are beneficial interests in movable. They are thus intangible movable
properties. Transfer of actionable claims comes under the purview of Section 130 of the Act.
Actionable claims may be transferred as gifts by an instrument in writing signed by the
transferor or his duly authorised agent. Registration and delivery of possession are not
necessary.

A gift of future property

A gift of future property is merely a promise which is unenforceable by law. Thus, Section
124 of the Transfer of Property Act renders the gift of future property void. If a gift is made
which consists of both present as well as future property, i.e., one of the properties is in
existence at the time of making the gift and the other is not, the whole gift is not considered
void. Only the part relating to the future property is considered void. Gift of future income of
a property before it had accrued would also be void under Section 124.

6
(2014) 9 SCC 445

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A gift made to more than one donee

Section 125 of the Act says that in case a property is gifted to 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 transferor and does not go to the other donee.

A gift made to two donees jointly with the right of survivorship is valid, and upon the death of
one, the surviving donee takes the whole.

PROVISIONS RELATING TO ONEROUS GIFTS

Onerous gifts refer to gifts which are a liability rather than an asset. The word ‘onerous’ means
burdened. Thus, where the liabilities on a property exceed the benefits of such property it is
known as an onerous property. When the gift of such a property is made it is known as an
onerous gift, i.e., a non-beneficial gift. The donee has the right to reject such gifts.

Section 127 provides that if a single gift consisting of several properties, one of which is an
onerous property, is made to a person then that person does not have the liberty to reject the
onerous part and accept the other property. This rule is based upon the principle of “Qui sentit
commodum sentire debet et onus” which implies that the one who accepts the benefit of a
transaction must also accept the burden of it. Thus, when two properties, one onerous and the
other prosperous, are given as gifts to a donee in the same transaction, the donee is put under
the duty to elect. He may accept the gift together with the onerous property or reject it. If he
elects to accept the beneficial part of the gift, he is bound to accept the other which is
burdensome. However, an essential element of this Section is a single transfer. Both the
onerous and prosperous properties must be transferred in one single transaction only then do
they require the obligation to be accepted or rejected jointly.

In case the onerous gift is made to a minor and such donee accepts the gift, he retains the right
to repudiate the gift on attaining the age of majority. He may accept or reject the gift on
attaining majority and the donor cannot reclaim the gift unless the donee rejects it on becoming
a major.

UNIVERSAL DONEE

The concept of universal donee is not recognised under English law, although universal
succession, according to English law is possible in the event of the death or bankruptcy of a
person. Hindu law recognises this concept in the form of ‘sanyasi’, a way of life where people
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renounce all their worldly possessions and take up spiritual life. A universal donee is a person
who gets all the properties of the donor under a gift. Such properties include movables as well
as immovables. Section 128 lays down in this regard that the donee is liable for all the debts
and liabilities of the donor due at the time of the gift. This section incorporates an equitable
principle that one who gets certain benefits under a transaction must also bear the burden
therein. However, the donee’s liabilities are limited to the extent of the property received by
him as a gift. If the liabilities and debts exceed the market value of the whole property, the
universal donee is not liable for the excess part of it. This provision protects the interests of the
creditor and makes sure that they can chase the property of the donor if he owes them.

SUSPENSION OR REVOCATION OF GIFTS

Section 126 of the Act provides the legal provisions which must be followed in case of a
conditional gift. The donor may make a gift subject to certain conditions of it being suspended
or revoked and these conditions must adhere to the provisions of Section 126. This Section lays
down two modes of revocation of gifts and a gift may only be revoked on these grounds.

Revocation by mutual agreement

Where the donor and the donee mutually agree that the gift shall be suspended or revoked upon
the happening of an event not dependent on the will of the donor, it is called a gift subject to a
condition laid down by mutual agreement. It must consist of the following essentials:

 The condition must be expressly laid down

 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.

 The condition upon which a gift is to be revoked must not depend solely on the will of
the donor.

 Such conditions must be valid under the provisions of law given for conditional
transfers. For eg. a condition prohibiting the alienation of a property is void
under Section 10 of the Transfer of Property Act.

 The condition must be mutually agreed upon by the donor and the donee.
 The gift revocable at the will of the donor is void even if such condition is mutually
agreed upon.

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REVOCATION BY THE RESCISSION OF THE CONTRACT

Gift is a transfer it is thus preceded by a contract for such transfer. This contract may either be
express or implied. If the preceding contract is rescinded then there is no question of the
subsequent transfer to take place. Thus, under Section 126, a gift can be revoked on any
grounds on which its contract may be rescinded. For example, Section 19 of the Indian Contract
Act makes a contract voidable at the option of the party whose consent has been obtained
forcefully, by coercion, undue influence, misrepresentation, or fraud. Thus, if a gift is not made
voluntarily, i.e., the consent of the donor is obtained by fraud, misrepresentation, undue
influence, or force, the gift may be rescinded by the donor.

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 a gift on the grounds of fraud, misrepresentation, etc, is three years
from the date on which such facts come to the knowledge of the plaintiff (donor).

The right to revoke the gift on the abovementioned grounds is lost when the donor ratifies the
gift either expressly or by his conduct.

BONAFIDE PURCHASER

The last paragraph of Section 126 of the Act protects the right of a bona fide purchaser. A bona
fide purchaser is a person who has purchased the gifted property in good faith and with
consideration. When such a purchaser is unfamiliar with the condition attached to the property
which was a subject of a conditional gift then no provision of revocation or suspension of such
gift shall apply.

Exceptions

Section 129 of the Act provides gifts which are treated as exceptions to the whole chapter of
gifts under the Act. These are:

 Donations mortis causa

These are gifts made in contemplation of death.

 Muslim-gifts (Hiba)

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These are governed by the rules of Muslim Personal Law. The only essential requirements are
declaration, acceptance and delivery of possession. Registration is not necessary irrespective
of the value of the gift. In case of a gift of immovable property worth more than Rupees 100,
Registration under Section 17 of the Indian Registration Act7 is a must, as it applies to Muslims
as well. For a gift to be Hiba only the donor is required to be Muslim, the religion of the donee
is irrelevant.

CONCLUSION
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 a gift.
The gift, being a transfer of the ownership rights, must be in possession and ownership of the
transferee and must exist at the time of making the transfer. The transferor 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 the gift must be ratified by a competent person on
his/her behalf. The gift of future property is void. Partial acceptance of prosperous gifts and
rejection of onerous gifts is not valid either. The acceptance of a gift entails the acceptance of
the benefits as well as the liabilities coupled with such a gift. A gift may be revoked only by a
mutual agreement on a condition by the donor and the donee, or by rescinding the contract
about such gift. The Donations mortis causa and Hiba are the only two kinds of gifts which
do not follow the provisions of the Transfer of Property Act.

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