Gift under Transfer of Property Act

Gifts under Transfer of Property Act, 1882

Section 122 to Section 129 contained in Chapter VII of Transfer of Property Act, 1882 deals with gifts.
A gift is considered a gratuitous transfer as an existing property is transferred in favour of another person without consideration.
- A gift between living persons is intervivos (between the living) gift and it is a transfer of property within the meaning of Section 5 of this Act.
The following gifts do not come within the purview of this Act:
- Testamentary gift that is a gift by operation of law.
- A gift made in apprehension of death.

A gift is defined in Section 122 of the Act, which reads as follows:

Gift is the transfer of certain existing moveable or immoveable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee.
Acceptance when to be made – Such 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.

1. Transfer of Ownership

A gift involves transfer of ownership as in this the whole interest of the person in the property is transferred in favour of another person.
The person transferring the interest is known as the ‘donor’ and the person to whom the interest is transferred is known as the ‘donee’.
The donor must be competent to contract; he must be major as well as of sound mind.
The donee does not need to be competent to contract; a minor or a person of unsound mind though disqualified from entering into a contract is capable of receiving the property.

2. Existing Property

As per Section 124 of this Act, the gifted property must be in existence at the time of making the gift, although its conveyance may take place either in future or in present.
Both immovable and movable property may be gifted.
A gift of a future property is Also, a gift comprising of both the existing and future property is void as to the future property.
An actionable claim is an existing property, and it can be gifted.

3. Transfer Without Consideration

An essential feature of a gift is that it must be gratuitous.
Ownership must be transferred without any consideration.
The word ‘consideration’ has been defined in Section 2(d) of the Indian Contract Act, 1872 (ICA) and is used in the same sense under the Transfer of Property Act, 1882.
As per Section 2(d) of ICA, when, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise.

4. Voluntary Transfer with Free Consent

The gift must be made by the donor voluntarily, that is with his free will and consent.
When the consent of the donor is not free that is the consent has been given due to coercion or undue influence, then the gift will not be a valid gift.
- Section 15 and 16 of the Indian Contract Act, 1872 defines coercion and undue influence respectively.

5. Acceptance of Gift

Acceptance of the gift by the donee is necessary and the acceptance may be expressed or implied.
When the donee is a minor or of unsound mind, then the gift must be accepted on his behalf by a competent person.

Section 123 lays down two modes for effecting a gift depending on the nature of property.

Gifts may be made to two or more persons
For the validity of the gift, it is necessary that it must be accepted by all the donees.
Section 125 provides that 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.

Void gifts may be divided into two types:

The following gifts are included in the category of void gifts:

Gifts depending on unlawful purposes.
Gifts made upon a condition, the fulfillment of which is impossible or forbidden by law.
Gifts by a person incompetent to contract.
Where the donee of the gift dies before acceptance.
A gift comprising of both the existing and future property is void as to the future property.

A gift is said to be onerous when it is accompanied by a burden or obligation.
- This section is based on the maxim ‘qui sentit commodum sentire debetet onus’ which means that he who receives advantage must also bear the burden.
Section 127 of this Act deals with the concept of Onerous Gifts. It states that:
- Where a gift is in the form of a single transfer to the same person of several things of which one is, and the others are not burdened by an obligation, the donee can take nothing by the gift unless he accepts it fully.
- Where a gift is in the form of two or more separate and independent transfers to the same person of several things, the donee is at liberty to accept one of them and refuse the others, although the former may be beneficial and the latter onerous.
Onerous Gift to Disqualified Person - A donee not competent to contract and accept a property which, burdened by any obligation, is not bound by his acceptance. But if, after becoming competent to contract and being aware of the obligation, he retains the property given, he becomes so bound.

Section 128 deals with the concept of universal donee. It states that:
Subject to the provisions of section 127, where a gift consists of the donor's whole property, the donee is personally liable for all the debts and liabilities of the donor at the time of the gift to the extent of the property comprised therein.
Universal Donee is the person who gets the whole property (both movable and immovable) of the donor under a gift.

Section 129 deals with the Gifts which are made in contemplation of death and known as donatis mortis causa. Such gifts are exempted from the operation of chapter VII by virtue of Section 129.
Another exemption is made in favour of gifts which are governed by Muslim personal law.