Can a Gift Deed be challenged in India?

 What is a Gift Deed?

According to section 122 of the Transfer of Property Act, 1882, you can transfer immovable property through a gift deed. Like a sale deed, a gift deed contains details of the property, the transferrer and recipient. But it allows you to transfer ownership without any exchange of money.

Registering a gift deed with the sub-registrar is mandatory as per section 17 of the Registration Act, 1908, and as per section 123 of the Transfer of Property Act. If you don’t do this, the transfer will be invalid.

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Besides that, once a gift deed is registered in the name of the recipient, only then can she/he apply for mutation of the property. Mutation is necessary to transfer utility connections in the name of the recipient. Also, for the recipient to be able to further transfer the property, a registered gift deed will be required.

 

Can a Gift Deed be challenged?

The gift deed can certainly be questioned in the court of law by filling a suit for such declaration. However, it will be challenged only if you are able to establish that the execution of the deed was not as per the wish of the donor or was executed under misrepresentation, fraud etc.

 

What is Suit of Declaration?

A "Declaration" is legal pronouncement by a court of law in respect of a person's right to property or his status.

Any person entitled to any legal character, or to any right to a property may institute a suit against any other person denying or interested to deny, his title to such character or right, and the court may in its discretion make therein a declaration that he is so entitled, and the plaintiff need not in such a suit ask for any further relief.

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The Suit for declaration is to declare a right of the party/plaintiff and when the right is pertaining to property, the suit is for declaration title/ownership and also for recovery of possession.

 

What is the procedure of revocation of a Gift Deed?

Section 126 of the Transfer of Property provides for conditions where a gift can be revoked. the following are essential ingredients for revocation of gift:

there must be an agreement between the donor and donee that the gift shall be suspended or revoked on the happening of a specified event;

such event must be one which does not depend upon the will of the donor;

the condition as to the suspend or revocation should be agreed to by the donee at the time of accepting the gift. And,

there must exist a ground , except want or failure of consideration, on which a contract may be rescinded.

the condition should not be illegal, or immoral and should not be repugnant to the estate created under the gift.

Section 126 is controlled by sec. 10. As such, a clause in the gift deed completely prohibiting alienation is void in view of the provisions contained in sec. 10.

A gift, which was not based on fraud, undue influence or misrepresentation nor was an onerous one, cannot be canceled unilaterally. Such a gift deed can be cancelled only by resorting to legal remedy in a competent court of law.

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How can a lawyer help in executing a gift deed?

A gift deed being a legal document requires the supervision of a legal expert for the purpose of drafting and executing. A documentation lawyer, owing to his years of experience in handling gift deeds, can guide you through the procedure of drafting and registration of the same. He can get the gift deed drafted on your behalf and can ensure that your other rights or assets are not affected by executing a particular deed. He can make sure that all the legal formalities are fulfilled while gifting property and no legal harm is done to the transferor during the transaction.