GIFT UNDER PROPERTY LAW
A Gift is generally regarded as a transfer of ownership of a property where the sender
willingly brings into effect such transfer without any compensation or consideration in
monetary value. It may be in the form of moveable or immoveable property and the parties
may be two living persons or the transfer may take place only after the death of the
transferor. If the essential elements of the gift are not implemented properly it may become
revoked or void by law.
Section 122 of Transfer of Property Act defines a gift as the transfer of an existing
moveable or immovable property. Such transfers must be made voluntarily and without
consideration. The transferor is known as the donor and the transferee is called the donee.
The gift must be accepted by the donee. This Section defines a gift as a gratuitous transfer
of ownership in some property that is already existing. The definition includes the transfer
of both immovable and moveable property.
There are the following five essentials of a valid gift:
1. Transfer of ownership
2. Existing property
3. Transfer without consideration
4. Voluntary transfer with free consent
5. Acceptance of the gift
Transfer without consideration
A gift must be gratuitous, i.e., the ownership in the property must be transferred without
any consideration. Even a negligible property or a very small sum of money given by the
transferee in consideration for the transfer of a very big property would make the
transaction either a sale or an exchange. Consideration, for the purpose of this section, shall
have the same meaning as given in Section 2(d) of the Indian Contract Act. The
consideration is pecuniary in nature, i.e., in monetary terms. Mutual love and affection is
not pecuniary consideration and thus, property transferred in consideration of love and
affection is a transfer without consideration and hence a gift. A transfer of property made in
consideration for the ‘services’ rendered by the donee is a gift. But, a property transferred in
consideration of donee undertaking the liability of the donor is not gratuitous, therefore, it is
not a gift because liabilities evolve pecuniary obligations.
Section 122 provides that the acceptance must be made during the lifetime of the donor and
while he is still capable of giving. The acceptance that comes after the death or
incompetence of the donor is no acceptance. If the gift is accepted during the life of the
donor but the donor dies before the registration and other formalities, the gift is deemed to
have been accepted and the gift is valid.
In the case of immovable property, registration of the transfer is necessary irrespective of
the value of the property. Registration of a document including gift-deed implies that the
transaction is in writing, signed by the executant (donor), attested by two competent persons
and duly stamped before the registration formalities are officially completed. In the case
of Gomtibai v. Mattulal, it was held by the Supreme Court that in the absence of written
instrument executed by the donor, attestation by two witnesses, registration of the
instrument and acceptance thereof by the donee, the gift of immovable property is
The doctrine of part performance is not applicable to gifts, therefore all the conditions must
be complied with. A donee who takes possession of the land under unregistered gift-deed
cannot defend his possession on being evicted. The following must be kept in mind
regarding the requirement of registration:
Registration of the gift of immovable property is must, however, the gift is not
suspended till registration. A gift may be registered and made enforceable by law
even after the death of the donor, provided that the essential elements of the gift
are all present.
In case the essential elements of a valid gift are not present, the registration shall
not validate the gift.
In the case of movable properties, it may be completed by the delivery of possession.
Registration in such cases is optional. The gift of a movable property effected by delivery of
possession is valid, irrespective of the valuation of the property. The mode of delivering the
property depends upon the nature of the property. The only things necessary are the transfer
of the title and possession in favour of the donee. Anything which the parties agree to
consider as delivery may be done to deliver the goods or which has the effect of putting the
property in the possession of the transferee may be considered as a delivery.
To constitute a transfer as a gift it must follow the provisions of the Transfer of Property
Act. This Act extensively defines the gift itself and the circumstances of the transfer of such
a gift. The gift, being a transfer of the ownership rights, must be in possession and
ownership of the transferee and must be existing at the time of making the transfer.