GIFT AND ONEROUS GIFT

Definition of Gift:

Gift is the transfer of ownership in a movable or immovable property without

any consideration. The essence of gift is a voluntary and gratuitous transfer of
ownership in a property in favour of another person.

According to Section 122 of the Transfer of Property Act,

 “Gift" is the transfer of certain existing movable or immovable 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:

Section 122 further provides that, 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.

Classification of Gift:

A gift may be either:

 Gift inter vivos (gift which takes place between two living persons).
 Gift mortis causa (gift made in contemplation of death.
 Gift by Will.

Here gift made between living persons is inter vivos gift and it is a transfer of
property within the meaning of section 5 of this Act.

Whereas testamentary gift is a transfer by operation of law and it does not come
within the purview of this Act.

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A gift made in apprehension of death i.e., gift mortis causa also does not come
within the scope of this Act.

Therefore, Transfer of Property Act only recognizes gift between livings

persons i.e. gift inter vivos

Essential Elements:

The essential elements of a valid gift are:

 There must be a transfer of ownership of property.

 The property must be in existence.
 The transfer must be made voluntarily.
 The transfer must be made without consideration.
 The property must be accepted by or on behalf of the person to whom it is
transferred.
 The acceptance must be at a time when the donor is alive and capable of
giving.
 The subject matter of the gift must be certain existing movable or
immovable property.

Transfer of Ownership:

A gift necessarily involves transfer of ownership. In this, the whole of the

interest of the person in a property is transferred in favour of another person.
The person transferring the interest is known as "donor" and the person to
whom the interest is transferred is known as "donee".

However, it is permissible to make conditional gifts of property also but the

condition must not be repugnant to any of the provisions of sections 10 to 34 of
the Act.

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Existence of Property:

For a valid gift, it is necessary that the property must be in existence at the time
of making gift, although its conveyance may take place either in present or
future.

Under section 122, both types of properties i.e., movable or immovable may be
gifted, but such property must be in existence at the time of making gift
otherwise the gift will be void.

Voluntary Transfer:

The gift must have been made by the donor voluntarily i.e. with his free will
and consent. Where the consent of the donor is not free i.e., the consent has
been given due to coercion or undue influence, the gift will not be a valid gift.

The gift must be a voluntary act of the donor and should not have been obtained
under force, coercion or fraud and the donor must know and understand the
contents of the instrument and its effect.

Thus where undue influence and pressure has been exercised on the donor, it is
clear that he has not made the gift voluntarily.

Without Consideration:

The gift must be made without consideration. The word consideration" has been
defined in section 2(d) of the Contract Act, 1872, and it is used in the same
sense under the Transfer of Property Act. It must be a pecuniary consideration,
valuable terms of money.

Even a small sum of money given in return of gift will make it sale.

Acceptance by the Donee:

Acceptance of the gift by the donee is necessary. Acceptance of the gift may be
express or implied. Section 122 provides that acceptance must be made during

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the lifetime of the donor and while he is capable of giving. If the donee dies
before acceptance, the gift is void. Gift is bilateral transaction between two
living persons.

Therefore, the acceptance of the gift must be completed before the donor dies or
becomes incompetent.

The acceptance of gift

In order to constitute a valid gift, the fundamental requirement is that the gift
must be accepted by the donee. The acceptance of the gift should be made
during the life time of the donor, and while he is still capable of giving. If the
donee dies before acceptance, the gift will not be valid. The acceptance may be
express or implied. The fact that the donee has been put in possession of the gift
deed is sufficient to infer the acceptance.

Subject Matter of Gift:

The subject matter of the gift must be certain existing movable, or immovable
property. It may be land, goods, or actionable claims. It must be transferable
under Section 6. However, it cannot be future property.

MODE OF TRANSFER IN GIFT [SECTION 123]

This section lays down the modes of transferring in gift. A gift of immovable
property must be made through registered instrument whereas a gift of movable
property may be affected also by delivery of possession.

 Gift of immovable property

Under section 123, a gift of immovable property, irrespective of its value, must
be made through a registered instrument. This provision excludes every other
mode of transfer in case of a gift of immovable property. Even if a donee is put

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in the possession of the intended property under an unregistered gift deed, he
would not get the protection under section 53-A of the Act.

In the case of Birendra Kishore Ghose @ Gopal Krishna Ghosh VS.

Bangladesh, an unregistered gift was made to A by B which was made just to
avoid seizure of the gifted property by the Government as the said property was
excess of 100 bighas as mentioned in the Bangladesh Land Holding
(Limitation) Order, 1972. It was observed by the court that the deed itself is
unregistered and according to section 123 of the Transfer of Property Act, a gift
may be effected by registered document and in the absence of registration the
gift is not valid.

 Gift of movable property

In a gift of movable property, irrespective of its value, the registration is

optional. A gift of movable property can be made by two alternative ways- a) by
a registered instrument or b) by delivery of possession. Thus a gift of movable
property may be completed by delivery only. But under section 123, a gift is not
completed until the goods gifted are delivered to the donee.

VOID GIFTS UNDER THE TRANSFER OF PROPERTY ACT

Under the Transfer of Property Act, there are certain gifts which are considered
to be void. These are following

 gift made for an unlawful purpose, (section 6]

 Where the gift is a conditional one, the fulfillment of such condition is
impossible or forbidden by law,[section 6]
 Gift made by a person who is incompetent to contract, eg. gift made by
lunatic or minor etc.; [section 7]
 If the donee dies before the acceptance of the gift, [Section 122]

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  A gift comprising of existing and future property is void as to the latter,
[section 124]

 If a gift is made to two or more persons, and one of such person does not
accept the gift, the gift is void as to the interest which would be taken by
such person; [section 125]

Gift of Existing and Future Property (Section 124):

Section 124 provides that, a gift comprising both existing and future property is
void as to the latter.

The Transfer of Property Act provides that the gift can be made only of an
existing property. The property which is not in existence cannot be gifted.
Therefore, a gift comprising both the existing and future property is valid for
existing property but void for future property

A gift of a property not in existence is a promise to be performed in future and

since it is without consideration, it is void and unenforceable.

Onerous Gifts (Section 127):

Meaning of Onerous Gift:

A gift is said to be onerous when it is accompanied with 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.

According to Section 127, where a gift is in the form of a single transfer to 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.

This means the donee in such a case may either accept the full right or reject
that, partial acceptance is not allowed.

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Illustration: A has shares in X, a prosperous joint stock company, and also
shares in Y, a joint stock company, in difficulties. Heavy calls are expected in
respect of the shares in Y. A gives B all his shares in joint stock companies. B
refuses to accept the shares in Y. He cannot take the shares in X.

Section 127 further provides that, 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.

Illustration: A having a lease for a term of years of a house at a rent which he

and his representatives are bound to pay during the tem, and which is more than
the house can be let for, gives to B the lease and also, as a separate and
independent transaction, a sum of money. B refuses to accept the lease. He does
not by this refusal forfeit the money.

Onerous Gift to Disqualified Person:

Section 127 also provides that, a donee not competent to contract and accepting
property 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.

This means, when an onerous gift is made to an incompetent or disqualified

donee, for example, a minor, he has a right to reject or repudiate the gift on
attaining competency i.e., majority. Incompetent person is not bound by the
acceptance of the gift after attaining competency. He has to exercise his option
immediately because if after becoming competent to contract and being aware
of the obligation, he retains the property given to him, he becomes bound by the
obligation.

The section enshrined the rule that, where a gift is made to a person in single
form of several properties, of which one is burdened by an obligation and the

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others are not, he must accept the gift fully which means he cannot refuge the
burdened one and accepts the others. But if such gift is made in two or more
separate forms, then the donee might accept one of them and refuge the others
although the former might be beneficial and the latter onerous.

EXCEPTION

An exception is made in case of onerous gift in the last paragraph of section

127. If an onerous gift is made to a disqualified person e.g. minor, lunatic etc.
then as such person is unable to accept any burdened by obligation he is not
bound by his acceptance. But if such person latter becomes competent to
contract and is aware of the obligation, and still retains the property he becomes
bound by such obligation.

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