Can A Gift Be Conditional In India?

Gifts can definitely be conditional. A conditional gift is a present given to someone without any consideration in return but with a condition attached to it. A conditional gift is always subject to a condition co-existing with the gift. But the condition should necessarily be lawful, condition prohibited under the law will not allow the beneficiaries to execute the gift deed. In Naramadaben Maganlal Thakker v. Pranivandas,[1] the Supreme Court held that the gift, movable or immovable, is transferred voluntarily without consideration and the person gifting the movable/immovable property is the donor and the recipient is the done.

The conditional gift can only be revoked when the offeree fails to fulfill the conditions attached to the gift. The gift is only transferred to the recipient on the occurring of some event which is denominated as a condition to the gift deed. If the said event fails to occur then the person giving the gift can take it back. The gift will only be complete when the conditions are fulfilled and the donor has the chance to cancel the gift deed before the conditions are actually fulfilled. For example, Akshay will gift his farmhouse to Shubh, if Shubh is alive at Akshay’s death.

While writing a will as a conditional gift, including in conditions will restrict the beneficiaries to execute the will and inherit funds, assets and belongings from the said estate until and unless they meet the certain criteria established by the person to whom the will belongs. For example, if you specify an age that is to be attained before executing the will, then beneficiaries need to attain the said age in order to execute the will.

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The two types of conditions attached to gifts are condition precedent and condition subsequent. Condition Precedent is the condition that is envisaged to happen or must happen before the gift is received by the beneficiaries. If the condition precedent is said to be void per se, then the gift fails completely.[2] Condition Subsequent is the condition that has to be fulfilled after the transfer of the gift, if not fulfilled the beneficiary loses the gift and it is taken back by the person who gifted it. If the condition subsequent is said to be void then the gift becomes an unconditional gift.

The Supreme Court of India also said that conditional gifts can be canceled before the conditions are fulfilled.

The conditions can be said to be void when the condition is repugnant and cannot be fulfilled or works against the beneficiary’s interest or the condition is not certain, not enforceable and the court is not able to interpret the request of the parties to the contract or if it is felt that r=the recipient will not be able to fulfill the condition without any fault of their own and the court overrules the condition. The court has all the rights to ascertain whether the recipient meets the condition subsequent or not. If they have not fulfilled the condition subsequent then the recipient’s right over the gifts will be exhausted and will be given back to the donor.

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The whole concept of conditional gift is based on common law that is the judge-made law. It’s been a long time since the courts have tried to strike down a settlement between the freedom of testation and imposition of certain limitations which in any case, if not followed, would make the condition void.

In Reninkuntla Rajamma v. Sarwanamma,[3] the court held that the donor has all the rights to enjoy the possession of the property during his lifetime and this right does not affect the validity of the deed. Further, the court said that satisfying the condition mentioned in the deed holds the utmost significance and those conditions do not make the gift void. The judges also mentioned that Indian law has no provision about transferring ownership without transferring the right of possession for the same. However, Section 122 of Transfer of Property Act defines condition precedent which should be satisfied before the execution of the gift deed and the gift constitutes the transfer of property without consideration.

Hence, gifts can be conditional and a conditional gift will be completed on compliance with the conditions mentioned in the gift deed.

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[1] 1997 2 SCC 255

[2] Transfer of Property Act, sec. 122.

[3] 2014 9 SCC 445

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This Article is Authored by Kinjal Sharma, First Year B.Com LLB (Hons) Student at Institute of Law, Nirma University, Ahmedabad.

Also Read – Is Revocation of Gift Possible?

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