What is a Gift Deed?
Property can be transferred from one person to another through several ways. It can be through the way of sale, will, intestate succession or a gift. According to Section 122 of The Transfer of Property Act, 1882, “Gift” is the transfer of certain existing moveable or immoveable 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. Hence, the Gift Deed is a document, registering the voluntary transfer of a property, movable or immovable, from a donor (the person giving the gift) to a donee (the person receiving the gift).
The Gift Deed is completed when accepted by the donee. The acceptance is, however, to be made before the death of the donor, when he is still capable of giving and before the donee dies.
Transfer of a Gift
The steps involved in making a gift are:
- The drafting of a gift deed
- Acceptance of the gift by the donee
- Transfer of property (the gift)
Once a gift deed is made and duly accepted, the transfer of the gift needs to be made. The transfer process differs for movable and immovable property. For the transfer of immovable property, it is mandatory to register the property under Section 17 of The Registration Act, 1908. The transfer is said to have been effected when the registered instrument is signed by or on behalf of the donee, in the presence of two witnesses. The transfer of movable property on the other hand is effected either by a registered instrument signed as aforesaid or by mere delivery of the property.
Revocation of Gift Deed
Under regular circumstances, a gift once made, cannot be revoked. However, Section 126 of the Transfer of Property Act, 1882, makes two provisos to the given rule. A gift deed can be suspended or revoked either by a mutual consent of the donor and the donee or by rescinding the contract between the two parties.
If the donor and the donee mutually agree on revocation of the gift deed, then it will stand suspended. This can also be done by certain stipulations mentioned in the contract, not at the will of the donor, unfulfillment of which result in the revocation of the deed. For instance, if A gifts to B his property on the condition that B maintains A till the latter’s death and B fails to do so, the gift deed will be revoked. However, it is important to note that if both the donor and donee agree to make the revocation at the will of the donor, then such a gift deed would be void.
In the case S. Sarojini Amma v. Velayudhan Pillai Sree Kumar, the appellant executed a gift deed in favour of the respondent. The deed clearly stated that the transfer of property will occur after the appellant’s death. However, the appellant cancelled the deed before her death. The validity of the suspension was brought before the Supreme Court. The division bench in this matter, held that since the property had not been transferred to the respondent, it can be reasonably revoked since possession of property is necessary for the transfer of gift. Hence, the revocation was held to be valid by the Court.
Another method for revoking a gift deed is by rescinding the contract. A gift deed is a contract between the donor, who proposes to give their property as a gift and the donee who accepts the possession of the property. However, if the agreement between the two parties is not valid, then the gift deed is revocable. Section 10 of the Indian Contract Act, 1872, states that, “All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void.” Hence, to contract, the consent needs to be free and the parties should be competent to contract. If A makes B execute a gift deed in his favour without A’s free consent, such deed is revocable. Similarly, a gift deed cannot be executed by a minor since he is not competent to contract as defined under Section 11 of the Indian Contract Act.
Therefore, a bona fide gift cannot be revoked. A revocation can only be made with the decree of the Court.
This article is authored by Vallari Gokhale, student of 2nd-year BALLB at University School of Law and Legal Studies, Guru Gobind Singh Indraprastha University.
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