Archive for the 'Law' Category

Gifting of property

July 2, 2006

Gift refers to the transfer of certain existing moveable or immoveable property by one person to another. The transfer should be done voluntarily and without consideration. The person transferring the property is called the donor and the person to whom the property is transferred is called the donee. The donee must accept the property during the lifetime of the donor and while he is still capable of giving. In case the donee dies before acceptance, the gift becomes void.

Any person who is sui juris can make a gift of his property. As a minor is incompetent to contract as well as transfer, a gift by the minor would be void. On behalf of a minor, a natural guardian can accept a gift containing a condition that the person nominated in the gift deed shall act as a manager of the gifted property. A minor may be a donee. But, if the gift is onerous, the obligation cannot be enforced upon him while he is a minor.

For a gift to be valid, it must be made by a person with his free consent and not under compulsion. The donor must not be insane. However, a mere weakness of the intellect would not be sufficient to invalidate the gift if the donor was able to apprehend the transaction.

There cannot be a `gift’ without a giving or taking.

The giving or taking are two reciprocal acts, which constitute a gift. No particular mode of acceptance is required. A transaction of gift must be accepted by the donee during the lifetime of the donor. Acceptance can be established by different modes like donee taking a property or being in possession of deed of gift. If a document of gift after its execution or registration in favour of donee is handed over to him by the donor, it amounts to a valid acceptance of gift.

Gift may be accepted by or on behalf of the donee. Donee may be a person unable to express acceptance. A gift can be made to a child and could be accepted on its behalf. The donee must be an ascertainable person. The giving or taking are two reciprocal acts, which constitute a gift. No particular mode of acceptance is required. A transaction of gift must be accepted by the donee during the lifetime of the donor. Acceptance can be established by different modes like donee taking a property or being in possession of deed of gift. If a document of gift after its execution or registration in favour of donee is handed over to him by the donor, it amounts to a valid acceptance of gift.

Gift may be accepted by or on behalf of the donee. Donee may be a person unable to express acceptance. A gift can be made to a child and could be accepted on its behalf. The donee must be an ascertainable person.

The subject matter of the gift may be land, goods, or actionable claims. It must be transferable. A gift must be of tangible property and it cannot be future property.

There must be a voluntary transfer of property to another made gratuitously and without consideration. When a gift is made, it must appear that the donor knew what he was doing and understood the contents of the instrument and its effect. Complete absence of monetary consideration is the main requirement. Love, affection, spiritual benefit and many other factors may be relevant. Where there is any equivalent of benefit measured in terms of money in respect of a gift, the transaction ceases to be a gift.

A clause in the gift deed totally prohibiting alienation is void. 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.

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. Law requires acceptance of the gift after its execution, though the deed may not be registered. The acceptance may be 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. Delivery of possession is an essential condition for the validity of the gift.

However, it is not necessary that in every case there should be a physical delivery of possession. The donor should divest himself completely of all ownership and dominion over the subject of the gift.

A gift of immovable property , which is not registered, is bad in law and cannot pass any title to the donee. Documents should be stamped with appropriate non-Judicial stamp and to be registered as required under the India Registration Act. Mere delivery of possession without a written instrument cannot confer any title. A gift of immovable property can only be made by a registered instrument. However, it is not necessary that in every case there should be a physical delivery of possession. The donor should divest himself completely of all ownership and dominion over the subject of the gift.

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