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CASE LAW ON GIFT DEED

GIFT DEED AND ITS LEGAL EFFECTS

In the case of Pankajakshy Amma v. Chandramathy Amma reported in (2001) 1 Kerala Law Journal 438, the Kerala High Court has dealt with the issue as to what constitute a valid transfer as gift. The Court has observed that "Section 123 of the Transfer of Property Act deals with the manner of execution of gift deed. If the purpose is for making a gift of immovable property, the transfer must be effected by a registered instrument signed by on or behalf of the donor and attested by atleast two witnesses. By a reading of Section 122 and 123, it can be seen that in order to execute a valid gift, the following elements are to be proved:-
(i) It must be a voluntary transfer.
(ii) The gift must be accepted by the donee during the lifetime of donor.
(iii) The gift must be effected by a registered document. It must be attested by two attestors.
If all the elements are fulfilled, there will be a valid gift, if not, it will have no legal consequence."


As per the commentary of Sanjiva Row on Transfer of Property Act 6th Edition - page 126 para 13), "mutation or change of name in the revenue records does not itself operate as a transfer. It is only evidence of transfer".



OWNERSHIP CAN BE GIFTED WITHOUT ITS POSSESSION AND RIGHT OF ENJOYMENT
K. Balakrishnan v. K.Kamalam (AIR 2004 SC 1257) It was open to the donor to transfer by gift title and ownership in the property and at the same time reserve its possession and enjoyment to herself during her lifetime. There is no prohibition in law that ownership in property cannot be gifted without its possession and right of enjoyment. Under Section 6 of the Transfer of Property Act "property of any kind may be transferred" except those mentioned in clauses (a) to (i). Section 6 in relevant part reads thus :-
"6. What may be transferred.- Property of any kind may be transferred, except as otherwise provided by this Act or by any other law for the time being in force,-
(a) ..............
(b) A mere right to re-entry for breach of a condition subsequent cannot be transferred to any one except the owner of the property affected thereby.
(c) ...........
(d) All interest in property restricted in its enjoyment to the owner personally cannot be transferred by him.
(e) A mere right to sue [***] cannot be transferred.

CANCELLATION OF GIFT DEED IS ONLY BY WAY OF SUIT

In Narayanamma and Anr.v. Papanna, 1988 (1 ) Kar. LJ. 80 : ILR 1987 Kar. 3892, it was held that cancellation of gift deed by 3rd defendant by another registered deed was not legal and valid as per the aforesaid decision, the remedy was to file a suit seeking cancellation of the gift deed.


ACCEPTANCE OF GIFT

The Supreme Court in K.Balakrishnan v. Kamalam [AIR 2004 SC 1257] held that when the gift is in favour of a minor created by the mother, natural guardian and she retained possession and the right of enjoyment, ownership of property by minor can be presumed by silent acceptance.


SUIT FOR CANCELLATION OF INSTRUMENT BY A PERSON WHO DID NOT EXECUTE THE DOCUMENT WOULD NOT LIE

A Full Bench of Madras High Court in Muppudathi v. Krishnaswami AIR 1960 Madras 1 (F.B.) when the instrument/document is not executed by the plaintiff, the same does not create a cloud upon the title of the true owner nor does it create apprehension that it may be a source of danger. Accordingly, a suit for cancellation of instrument by a person who did not execute the document would not lie. However, there could be cases where instruments are executed or purported to be executed by a party or by any person who can bind him in certain circumstances. As pointed out by the Madras High Court, these are : a party executing the document or principal in respect of a document executed by his agent, or a minor in respect of document executed by his guardian de jure or de facto, the reversioner in respect of a document executed by the holder of the anterior limited estate, a real owner in respect of a document executed by a benamidar. In these cases, though the party may not have executed document, if those are allowed to stand, it may become a potential source of mischief and danger to the title and a suit would, therefore, be maintainable for cancellation of such document. When the document itself is not executed by the plaintiff, there is no necessity to have the document cancelled by a Court decree, for it has no effect on the title of true owner.

APPEAL BEING A CONTINUATION OF THE SUIT

In Nair Service Society Ltd. v. K.C. Alexander, AIR 1968 SC 1165, the Supreme Court ruled". It is a fixed principle of law that a suit must be tried on the original cause of action and this principle governs not only the trial of the suits but also appeals. The appeal being a continuation of the suit new pleas are not considered."


Hon'ble Supreme Court in the case of Gurdev Kaur and Ors. v. Kaki and Ors. 2006 AIR SCW 2404. The duty of the Court would only be to test the authenticity of the WILL in terms of Section 63 of Indian Succession Act. Any and every circumstance is not a suspicious circumstance. A circumstance would be suspicious when it is not normal or is not. normally expected in a normal situation or is not expected of a normal person. A WILL is normally executed to interrupt the normal succession so that the testator would prefer some and exclude others and as such it cannot be said that. it. is unnatural or suspicious. Therefore, the authenticity of the document would have to be considered.

GIFT UNDER MUSLIM LAW
Transfer of Property Act are not applicable in the case of a gift in Muslim Law. In Muslim Law there can be an oral gift also. There are five types of gifts as per Muslim personal law, they are:
(i) Hiba
(ii) Ariat
(iii) Sadaqa
(iv) Hiba-bil.iwaz
(v) Hiba-ba-sharat-ul-iwaz.

As far as the Muslim gift is concerned, conditions necessary for a valid disposition is;
(i) majority
(ii) understanding
(iii) freedom
(iv) ownership of subject matter of disposition.


Hiba is a bilateral transaction, which takes effect when the donor declares the Hiba and the donee signifies his or her acceptance of the same. The ingredients to constitute Hiba are as follows: (i) disposition must be gratuitous.
(ii) it must effect mere transfer of the corpus of a property by one person to another.
(iii) Transfer should be unconditional. (iv) The property transferred must be in existence and should be specified.


The three essential conditions to constitute the gift are
(i) declaration of gift by the donor (Igde)
(ii) acceptance of the gift, express or implied, by or on behalf of the donee (Quabul)
(iii) delivery of the subject matter of the gift by the donor to the donee (Quada).


Hiba is an immediate and unconditional transfer of the corpus of the property without any return. Every Muslim, who has attained majority and has a sound mind can make a gift. The gift is complete not on the declaration of the date of acceptance, but on the date on which possession is delivered. It is also essential that for validity of a gift the donor should divest himself completely of all ownership and domain over the subject of gift. What is essential is that there should be a gift of the corpus. If the donor reserves to himself the right to be in possession of the corpus and the right to enjoy the same, there cannot be a valid gift as per the Muslim Law. But reservation of life interest and right of residence stand on a different footing.

Katheessa Umma v. Narayanath Kunhambu (AIR 1964 SC 275) "Where a husband, a Hanafi, makes a gift of properties, including immovable property, by a registered deed, to his minor wife who had attained puberty and discretion, and the gift is accepted on her behalf by her mother in whose house the husband and wife were residing, when the minor's father and father's father are not alive and there is no executor of the one or the other, such a gift must be accepted as valid and complete although the deed is handed over to the minor's mother and possession of the property is not given to a guardian specially appointed for the purpose by the civil Court. There can be no question that there was a complete intention to divest ownership, on the part of the husband of the donor, and to transfer the property to the donee. If the husband had handed over the deed to his wife, the gift would have been complete under Muhammadan law and it is impossible to hold that by handing over the deed to his mother- in-law, in whose charge his wife was, the husband did not complete the gift."

The Muslim Personal Law (Shariat) Application Act (26 of 1937) came into existence on 07.10.1937. The clear prescription of the said Act is that in a case of gift involving a donor and donee being Muslims, the law applicable to them shall be the Muslim Personal Law (Shariat). Section 2 of the said Act is extracted herein for better appreciation: "2.Application of Personal Law to Muslims.- Notwithstanding any customs or usage to the contrary, in all questions (save questions relating to agricultural land) regarding intestate succession, special property of females, including personal property inherited or obtained under contract or gift or any other provision of Personal Law, marriage, dissolution of marriage, including talaq, ila, zihar, lian, khula and mubaraat, maintenance, dower, guardianship, gifts, trusts and trust properties, and wakfs (other than charities and charitable institutions and charitable and religion endowments) the rule of decision in cases where the parties are Muslims shall be the Muslim Personal Law (Shariat).
Going by the Muslim personal law the natural guardians are father, grand father, executor appointed by the father or executor appointed by the grand father. Mother was never considered to be the natural guardian except in case of girl child till certain age.

There cannot be any quarrel about the principle of Mahommedan Law that a gift to a person not yet in existence is void.
Even under paragraph 141 of Mulla's Mahomedan Law it is observed that a gift does not fail in its entirity if it is made in favour of living persons and also in favour of unborn persons and that it would be void only to the extent to which interest is created in favour of unborn persons. The Muslim law does not recognise a gift in favour of an unborn person through the medium of trust. (Vide paragraph 151 of Mulla's Mahomedan Law) . Under the general law governed by the provisions of the T.P.Act , however, gifts to unborn persons through the medium of trust is recognised.
The normal rule of Mahomedan Law is that a gift can be revoked at any time before delivery of possession, subject, of course, to certain exceptions where a gift can be revoked even after delivery of possession. But where the donee is related to the donor within the prohibited degrees, the aforesaid exception does not apply.

GIFT IN FAVOUR OF UNBORN PERSON UNDER HINDU LAW
In F.M. Devaru Ganapati Bhat v. Prabhakar Ganapati Bhat - AIR 2004 SC 2665 - It was held that where a gift was made by a woman in favour of her brother's son then living with a stipulation that if other male children were later born to her brother they shall also be joint holders with the donee who was living at the time of gift, the stipulation would not be hit by Sec. 13 of T.P. Act but would be permissible and valid in view of Sec. 20 of T.P. Act.



GIFT IS WITHOUT CONSIDERATION
In Smt. SHAKUNTALA v. STATE OF HARYANA, AIR 1979 SC 843, their Lordships of the Supreme Court's observations as under: "It is therefore one of the essential requirements of a gift that it should be made by the donor 'without consideration'. The word 'consideration' has not been defined in the Transfer of Property Act, but we have no doubt that it has been used in that Act in the same sense as in the Indian Contract Act and excludes natural love and affection. If it were to be otherwise, a transfer would really amount to a sale within the meaning of Section 54 of the Transfer of Property Act, or to an exchange within the meaning of Section 118 for each party will have the rights and be subject to the liabilities of a seller as to what he gives and have the rights and be subject to the liabilities of a buyer as to that which he takes."

ONCE A GIFT IS COMPLETE, THE SAME CANNOT BE RESCINDED
Judgment reported in (2007)13 SCC 210, in the case of Asokan vs. Lakshmikutty and others, when a registered document was executed and the parties are close relatives, a presumption of the correctness of the averments in the document has to be taken and the onus of proof would lie not on the donee but on the donor and it was the donor to prove that the document was not acted upon. ……. ...It is, however, beyond any doubt or dispute that in order to constitute a valid gift acceptance thereof is essential. The Transfer of Property Act does not prescribe any particular mode of acceptance. It is the circumstances attending to the transaction which may be relevant for determining the question. There may be various means to prove acceptance of a gift. The document may be handed over to a donee, which in a given situation may also amount to a valid acceptance. The fact that possession had been given to the donee also raises a presumption of acceptance. ..In the present case it is not a case that the appellant was not aware of the recitals contained in deeds of gift which recite the factum of handling over of possession of the properties which were the subject-matter of the gift. The very fact that the defendant donors contend that the donee was to perform certain obligations in lieu of the gift is itself indicative of the fact that the parties were aware thereabout. Even a silence may sometimes indicate acceptance. It is not necessary to prove any overt act in respect thereof as an express acceptance is not necessary for completing the transaction of gift. ...Once a gift is complete, the same cannot be rescinded. For any reason whatsoever, the subsequent conduct of a donee cannot be a ground for rescission of a valid gift. The said deeds of gift were executed out of love an affection as well as on the ground that the donee is the son and successor of the denor and so as to enable him to live a good family life. The donors cannot later turn round and say that he was to fulfil a promise. It is one thing to say that the execution of the deed is based on a aspiration or belief, but it is another thing to say that the same constituted an onerous gift. What, however, was necessary is to prove undue influence so as to bring the case within the purview of Section 16 of the Contract Act. It was not done. ...It has been submitted by the donors that it would be open to them to prove that in fact no possession had been handed over. This case is concerned with the construction of recitals made in a registered document. When a registered document is executed and the executors are aware of the terms and nature of the document, a presumption arises in regard to the correctness thereof. When such a presumption is raised coupled with the recitals in regard to putting the donee in possession of the property, the onus is on the donor and not on the done.

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