Birthdays, anniversaries, festivals and achievements are some of the occasions on which gifts are received by people. By ‘gift’ I mean a token of love that one person or a group of persons give/s to the other in the form of either materialistic things or at times even non-materialistic things like handmade cards and letters. The idea of a ‘gift’ is subjective in nature and differs from person to person. In India, there are certain laws pertaining to what type of gifts can be given, which persons are deemed by law as fit to give gifts, what type of gifts constitute as illegal and can the given gifts be taken back or not. Answers to all these questions are given under the Transfer of Property Act, 1882. It is important for the common man to study this act in order to prevent himself from committing an act that is illegal.
Gifts can be formal or informal depending on the occasion and the relationship between the persons who are giving as well as receiving the gift. The meaning and value of the gift change depending on whether it is formal or informal. It is also important for people to understand that a gift is a material or an immaterial thing which one gives to the other with no intention of the receiver paying some amount or consideration to the giver. It is also important to note that once the gift has been given it is the property of the one who received it and the giver cannot exercise any control over it except in some situations which are considered exceptions to this rule under law.
The Transfer of Property Act, 1882
The Transfer of Property Act, 1882 deals with the laws related to the transfer of property from one person to another. It specifies the legalities involved in the transfer of property, the acts which constitute as offences, the jurisdictions under which one can file a case against the other in matters of injustice, the meaning of a gift and who can give it under the law and so on. The Transfer of Property Act, 1882 not only deals with matters of gifts but also with the transfer of property which takes place for consideration between two or more two people.
The sections of the Transfer of Property Act, 1882 which are essential to be comprehended to understand the ‘revocation of gift’ are mentioned as follows:
Section 122 – “Gift” defined – “Gift” is the transfer of certain existing moveable and 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.
Acceptance when to be made – Such acceptance must be made during the lifetime of the donor and while he is still capable of giving, if the done dies before acceptance, the gift is void.
Section 123 – Transfer how effected – For the purpose of making a gift of immovable property, the transfer must be effected by a registered instrument signed by or on behalf of the donor, and attested by at least two witnesses. For the purpose of making a gift of moveable property, the transfer may be effected either by a registered instrument signed as aforesaid or by delivery.
Section 124 – Gift of existing and future property – A gift comprising both existing and future property is void as to the latter.
Section 125 – Gift to several, of whom one does not accept – A gift of a thing to two or more donees, of whom one does not accept it, is void as to the interest which he would have taken had he accepted.
Section 126 – When gift may be suspended or revoked – The donor and donee may agree that on the happening of any specified event which does not depend on the will of the donor, it shall be suspended or revoked; but a gift which the parties agree shall be revocable wholly or in part at the mere will of the donor is void wholly or in part, as the case may be. A gift also be revoked in any of the cases (save want or failure of consideration) in which, if it were a contract, it might be rescinded. Save as aforesaid, a gift cannot be revoked. Nothing contained in this section shall be deemed to affect the rights of transferees for consideration without notice.
Revocation of gift under the Transfer of Property Act, 1882
As per Section 122, the definition of ‘gift’ is clear. Section 122 of the Act allows the transfer of immovable and movable property with the acceptance of the gift done in the lifetime of the donor (the one giving the gift) and the gift agreement stands void if the donee (the one receiving the gift) dies before he/she/they can receive the gift from the donor.
It is a general rule that a person cannot take back the gift/suspend it from the person to whom it was given except under the conditions which have been mentioned below.
As per Section 126, the revocation or suspension of a gift may be done on the happening or not happening of an event which is agreed by the donor as well as the donee and on which the donor does not have any control. For example, A gifts a car to B with a condition that A and B both agree on that if B or B’s descendants die before A dies then A will take possession of the car. B and his descendants die in a train accident during the lifetime of A. A takes possession of the car.
As per Section 126, any gift which shall be revocable on the will of the donor is void wholly or partly depending on whether the will of the donor is exercised on the gift wholly or partly.
Section 19 of the Indian Contract Act, 1872 is the Voidability of agreements without free consent – When consent to an agreement is caused by coercion, fraud and misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused.
A party to a contract whose consent was caused by fraud or misrepresentation, may, if he thinks fit, insist that the contract shall be performed and that he shall be put in the position in which he would have been if the representations made had been true.
Exception – If such consent was caused by misrepresentation or by silence, fraudulent within the meaning of section 17, the contract, nevertheless, is not voidable, if the party whose consent was so caused had the means of discovering the truth with ordinary diligence.
Explanation – A fraud or misrepresentation which did not cause the consent to a contract of the party on whom such fraud was practised, or to whom such misrepresentation was made, does not render a contract voidable.
When Section 126 of the Transfer of Property Act, 1882 is read with Section 19 of the Indian Contract Act, 1872 it applies that the gift is revocable at the option of the donor if the consent of the donor has opted through coercion, fraud, misrepresentation or undue influence by the donee. Just as the contract would be revocable under the said condition of Section 19 the same shall apply to Section 126 in which instead of the contract the gift shall be revoked.
For example, B a trustee of an institution receives gifts from the parents of certain students. Since B is in a position of dominance there can be a chance that B used undue influence to get the gifts from the parents. Under such situations, the gift can be revoked at the option of the parents.
The last condition pertaining to the revocation of gift as per Section 126 of the Transfer of Property Act, 1882 is the protection of the rights of transferees for consideration without notice. It means that there is a car which P the donor gifts to Q (the donee) on the condition that if Q fails the exam, P will revoke the gift and take possession of the car back from Q. Q sells the car which P had given him to T (transferee). Q fails the exams after the sale deed has been executed between Q and T. At the time of the sale, T was not informed about the condition between P and Q which is why P cannot obtain possession of the car from T as Q has already sold it to T and T was not aware of the arrangement between P and Q.
Important Case Laws
In the case of K. Balakrishnan vs K. Kamalam. & Ors on 18th December 2003 the appellant (K. Balakrishnan, donee) is the son of Devyani his mother and the donor. His mother had transferred 1/8th of the property which was inherited by the donor from her maternal grandfather to her son (the appellant) and the respondent, her daughter K. Kamalam on 24.09.1945 through a gift deed. At that time her son was 16 years old and her daughter was 4 years old. On 28.03.1970 the donor cancelled the gift deed which was executed by her on 24.09.1945 and issued a will on 30.03.1970. In the will, she mentioned that 1/8th of the property shall be inherited by her daughter the respondent and not her son the appellant. The donor died on 06.11.1982. The appellant filed a case for his share of the property against the respondent and it was held by the court that the gift deed cannot be cancelled by the donor as it was in force for 25 years and that the appellant did not deny the gift. The court also ruled that as per Section 126 of the Transfer of Property Act, 1882 the gift cannot be revoked at the will of the donor and hence the appellant should get his share.
In the case of Jagdeo Sharma vs Nandan Mahto And Ors. on 4 September 1981 land was gifted to the donee with a condition that the donee or the heirs of the donee cannot sell the land or alienate it and if they do so then the donor will have a right to take it back into their possession. The donee alienated the land and the donor filed a case to take the land under his control. The court held that this condition was correct under Section 126 of the Transfer of Property Act, 1882 but Section 126 cannot be read alone. It is to be read with Section 10 of the Transfer of Property Act, 1882 which says that any stipulation completely restraining the donee from transferring the gifted property is void. Since Section 126 cannot be read without Section 10 of the said Act, the donor cannot get possession of the land even if the donees alienate it.
Through this article, an attempt has been made to educate the masses about the legalities involved in giving gifts to anyone they know. Under the general rule, a gift can never be revoked except for some conditions which have been specified in Section 126 of the Transfer of Property Act, 1882 and elaborated upon through case laws and definitions taken from the bare act. It is important for the layman to be aware of the rules and regulations before giving a gift to someone in order to prevent unnecessary court trips. A gift is a token of love or appreciation that one has for the other and under no circumstances does the donor have the right to take it back from the donee just because the donor feels it is right for him/her/they to do so.
K.Balakrishnan vs K.Kamalam. &Ors on 18 December, 2003 – Appeal (civil) 1036 of 2000 Appeal (civil) 4770 of 2001
Jagdeo Sharma vs Nandan MahtoAndOrs. on 4 September, 1981 – AIR 1982 Pat 32, 1982 (30) BLJR 37