Property Law Ayush

8/13/2019 Property Law Ayush

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Subject:Property Law I

Title of the project: Prepare a Valid gift deed of FLAT(4 BHK) between two parties on the considerationof Natural love and affection

Submitted by

Ayush Kumar

Division: C Roll No.: 53 Class: BBA/LLB

Of

Symbiosis Law School, NOIDA

Symbiosis International University, PUNE

In

September, 2013

Under the guidance of

Prof. Vikram Singh

&

Prof. Kiran Kale

Symbiosis Law School, Noida


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C E R T I F I C A T E

The project entitled Prepare a Valid gift deed of FLAT (4 BHK)

between two parties on the consideration of Natural love and

affection submitted to the Symbiosis Law School, Noida for

Property Law-1 as part of internal assessment is based on my

original work carried out under the guidance of Prof. Vikram

Singh and Prof. Kiran Kale.

The research work has not been submitted elsewhere for

award of any degree.The material borrowed from other sources and incorporated in

the thesis has been duly acknowledged.

I understand that I myself could be held responsible and

accountable for plagiarism, if any, detected later on.

Signature of the candidate


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ACKNOWLEDGEMENT

I take immense pleasure in thanking Prof. Vikram Singh and

Prof. Kiran Kale, our beloved course in charges for having

permitted me to carry out this project work.

I wish to express my deep sense of gratitude to them for their

value guidance and useful suggestions, which helped me in

completing the project work, in time.

Finally, yet importantly, I would like to express my heartfelt

thanks to my beloved parents for their blessings, my friends/

classmates for their help and wishes for the successful

completion of this project.

Signature of the candidate


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INDEX

1.Introduction2.Types of gifts3.Essentials of Gift4.Gift Deed5.Transfer of gift depending upon nature of property6.Transfer process of gift7.Mode of Transfer of gift8.Nature of relationship between parties9.Gift deed10. Property Declaration Affidavit


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Introduction

Gift is transfer of ownership without consideration. Transfer without

consideration. Transfer without consideration is called gratuitous

transfer. A gratuitous transfer may take place between two living

persons or, it may take place only after the death of the transferor.

Gift may, therefore, be either inter vivos or, testamentary. Gift inter

vivos is gratuitous transfer of ownership between two living persons

and is a transfer of property within the meaning of Section 5 of the

Transfer of Property Act, 1882. Gift testamentary is called a will

which is transfer by operation of law and is outside the scope of this

Act. A gift made during apprehension of death is called a gift mortis

causa. Such gifts are also excluded from the Chapter 1 . The

provisions of this Act are applicable only to gifts inter vivos.

Definition of Gift: Section 122 of the Transfer of Property Act,

1882defines gift as under:

Gift is transfer of certain existing movable or immovable property

made voluntarily and without consideration, by one person called

the donor, to another, called the done, and accepted by or on

behalf of the donee.

Gift, as defined in this section, is gratuitous transfer of ownership in

some existing property made voluntarily. The definition include giftof both movable as well as immovable property. The transferor is

called donor and the transferee is called donee.

1Under Muslim law a gift made in apprehension of death is called gift during

marz-ul-maut and is interpreted as will. Gift made by a Muslim is called Hiba.

Both of these gifts are excluded from this Chapter by Section 129 of the Act.


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Donor: Donor must be a competent person. For competency, the

donor must have capacity as well as right to make the gift. If the

donor has capacity to contract he is deemed to have capacity to

make gift. Thus, at the time of gift, the donor must be of the age ofmajority and must have a sound mind. Gift minor or insane person

is void. Juristic persons, such as registered societies or firms or

institutions are also competent to make gift. Besides capacity,

donor must also have the right to make gift. Gift being transfer of

ownership, the donor must have ownership rights in the property at

the time of gift.

Donee: Donne need not be competent to contract. Donee may be

any person in existence at the date of making of gift. A gift made to

minor or insane person or even in favor of a child in mothers womb

is provided it is lawfully accepted by a competent person on his

(her) behalf. Donee too may be juristic person. Juristic persons,

such as, firms, companies or institutions are deemed to be

competent done and gift made to them is valid. However done must

be ascertainable person. Gift made to public in general is void. If

ascertainable, done may be two or more persons.

The idea of Gift:

A gift is a transfer of property without any monetaryconsideration by one person in favor of another and accepted by

him or by a person on his behalf. A gift, where both the parties

are Muslims is governed by the provisions of Quranic Law, and

not by the Transfer of Property Act, as it is inconsistent with the

provisions of this act.

There are certain essentials of a gift like donor and donee,

subject matter of a gift, interest created by the donor, gift must


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be made with free and voluntary consent and acceptance of the

gift without consideration.

Under Section 122 of Transfer of Property Act, 1882 Gift is

defined as the transfer of certain existing movable andimmovable property made voluntarily and without consideration,

by one person called the donor, to another, called the done and

accepted by or on behalf of the done.

Types of Gifts:

The two principal categories of gifts are:

Inter vivos gifts

Causa mortis gifts.

Inter vivos gifts: Inter vivosis Latin for between the living or

from one living person to another. A gift inter vivos is one that

is perfected and takes effect during the lifetime of the donor and

donee and that is irrevocable when made. It is a voluntary

transfer of property, at no cost to the donee, during the normal

course of the donors life.

A gift inter vivos differs from a sale, a loan, or barter sincesomething is given in exchange for the benefit in each of such

transfers. Whether the value given is a money price, a

percentage interest or an equivalent item of property, or a

promise to repay, the element of exchange makes such transfers

something other than a gift.

There are a number of special types of inter vivos gifts.


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Forgiveness of a debt is a gift of the amount of money owed, and

destroying the promissory note signed by the debtor and handing

it over to him or her can accomplish delivery. A share of stock in

a corporation may ordinarily be given to someone else by havingownership transferred to the person on the books of the

corporation or by having a new stock certificate issued in the

persons name. A life insurance policy can generally be given to

someone by delivering the policy, but it is more expedient to

express in writing that all interest in the policy is assigned, or

transferred, to the donee and to notify the insurance company to

that effect. Certain states require these formalities since state

law strictly regulates insurance. Written transfer can only make

gifts of land.

A donor can limit an inter vivos gift in certain ways. For example,

he or she might give someone a life estate in his or her property.

When the donee dies, the property reverts to the donor. A donor

cannot place other restrictions on a gift if the restrictions would

operate to make the gift invalid. If, for example, the donor

reserves the power to revoke a gift, there is no gift at all.

Causa Mortis Gifts: A gift causa mortis (Latin for in

contemplation of approaching death) is one that is made in

anticipation of imminent death. This type of gift takes effect upon

the death of the donor from the expected disease or illness. In

the event that the donor recovers from the peril, the gift is

automatically revoked. Gifts causa mortis only apply to personal

property.

A donor who is approaching death might make a gift by putting

his or her intention in writing. This procedure is likely to befollowed, when, for example, the donee is in another state, and


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personal delivery is thereby impractical. The delivery requirement

is frequently relaxed when a causa mortis gift is involved, since a

donor is less likely to be able to make an actual delivery as his or

her death approaches. A symbolic delivery is frequently sufficientto show that a gift was made, provided at least some effort to

make a delivery is exercised. The overt act aids a court in its

determination as to whether a delivery has been made.

The difference between a gift causa mortis and a testamentary

gift made by will is that a will transfers ownership subsequent to

the death of the donor, but a gift causa mortis takes effect

immediately. In most states, the donee becomes legal owner of

the gift as soon as it is given, subject only to the condition that

the gift must be returned if the donor does not actually die.

The requirements of a causa mortis gift are essentially the same

as a gift inter vivos. In addition, such a gift must be made with a

view toward the donors death, the donor must die of the

ailment, and there must be a delivery of the gift.

Gifts causa mortis are usually made in a very informal manner

and are frequently made because dying people want to be certain

that their dearest possessions go to someone they choose.

A donor who is approaching death might make a gift by putting

his or her intention in writing. This procedure is likely to be

followed, when, for example, the donee is in another state, and

personal delivery is thereby impractical. The courts only permit

the donee to keep the gift if the donor clearly intended the gift to

take effect at the time it was made. If the gift is made in writing

in a will and is intended to become effective only after the donordies, the gift is a testamentary one. The law in each jurisdiction is


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very strict about the features that make a will valid. One

requirement, for example, is that witnesses must sign the will. If

the donor writes down that he or she is making a gift, but the

writing is neither an immediate gift nor a witnessed will, thedonee cannot keep the gift.

The delivery requirement is frequently relaxed when a causa

mortis gift is involved, since a donor is less likely to be able to

make an actual delivery as his or her death approaches. A

symbolic delivery is frequently sufficient to show that a gift was

made, provided at least some effort to make a delivery is

exercised. The overt act aids a court in its determination as to

whether a delivery has been made.

A gift causa mortis is only effective if the donor actually dies. It is

not necessary that the donor die immediately, but the person

must die of a condition or danger that existed when the gift was

made and without an intervening recovery. The donee becomes

legal owner of the property in most states from the time the gift

is made. The person must, however, later return the gift if the

donor does not actually die. If the donor changes his or her mind

and revokes the gift, or recovers from the particular illness or

physical injury, the gift is invalid. A donor also has the right to

require that debts or funeral expenses be paid out of the value of

the gift.


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Essentials of Gift

The essentials of gift are given below:

There must be transfer of ownership The property must be existing property Transfer is without consideration The transfer is made voluntarily, i.e., free consent Gift must be accepted by transferee

Gift deed

This document allows you to gift your assets or transfer ownership

without any exchange of money. To gift immovable property, you

just have to draft the document on a stamp paper, have it attested

by two witnesses and register it. Registering a gift deed with the

sub-registrar of assurances is mandatory as per Section 17 of the

Registration Act, 1908, failing which the transfer will be invalid.

Besides, such a transfer is irrevocable. Once the property is gifted,

it belongs to the beneficiary and you cannot reverse the transfer or

even ask for monetary compensation.

However, if you want to gift movable property like jewellery,

registration is not compulsory. At the same time, a mere entry in an

account book is not sufficient to establish a transfer. Apart fromphysically handing over the property, you need to back it with a gift

deed. The process is slightly different if you are gifting company

shares. You will have to fill out the share transfer form and submit

it to the company or registrar, and the transfer agent of the firm.

Once again, get a gift deed drawn and executed to complete the

transfer, but the document need not be registered.


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Transfer of Gift depending upon the nature

of property:

Section 123 of the Transfer of property act, 1882 deals with

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 movable property the transfer may be effected either by a

registered instrument signed as aforesaid or by delivery. Such

delivery may be made in the same way as goods sold may be

delivered.

This section deals with formalities necessary for completion of a

gift. Unless these formalities are completed, the legal title does

not pass on to the done and the gift is not enforceable at law.

Section 123 of the transfer of property Act, 1882 lays down two

modes for effecting a gift depending on the nature of property.

Registration is necessary for the gift of immovable properties.

Where the property is movable, it may be effected by delivery of

possession.

Immovable Properties:

A gift of immovable property must be made only through a

registered document. Irrespective of valuation of property,

registration is necessary for the gift of an immovable property.

Gift of a piece of land valuing less than a rupees must also be

registered. Registration of a document including a gift deed,implies that the transaction is in writing, signed by the executant


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(donor), attested by two competent persons and duly stamped

before the registration formalities are officially completed. In

Gomtibai vs Muttulal,2 the Supreme Court had held that in the

absence of written instrument executed by donor, attestation bytwo witnesses, registration of this instrument, and acceptance

thereof by the donee, the gift of immovable property is not

complete.

Without due compliance of these formalities, the gifted-property

cannot be said to have been transferred to the donee. The

doctrine of past performance is not applicable to gifts. Therefore,

the donee that takes possession of a land under unregistered

gift-deed cannot defend his possession on being evicted.

However following two points are important with regard to the

requirement of registration:

Although registration of gift of immovable property is mustbut the gift is not suspended till registration. A gift may be

registered and, made enforceable at law even after the

death of the donor provided the essential conditions are

fulfilled.

Where the essential conditions for a valid gift are notfulfilled, registration shall not validate the gift.

The registration cannot validate a gift in the absence of any of

the essential elements. On the other hand, without registration

title cannot pass even if the essential ingredients are present.

Accordingly, although a gift of immovable property may be made

by registered deed, yet if it is not accepted by donee the gift is

inoperative.3

2AIR 1997 SC 1273Radhika Devi vs. Rajesh Kumar Niranjan, AIR 2009 Pat 109


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The case was under the Government Grants Act, 1895 (Section

2). The Ruler permitted the plaintiff to occupy and reside on a

portion of the land after the closure of the orphanage. It wasmentioned in the deed that the plaintiff and his heirs and

successors would enjoy that land and might get their names

recorded in the settlement records. The court said that it was

benevolent concession by the ruler in favor of the plaintiff and

was in the nature of a grant rather than a gift. This was

particularly so because there no indication in the document that

the ruler as donor gifted the land, and the plaintiff as a donee

accepted the same. No witness signed or attested the document

as is required in a gift transaction under Section 123, the TP Act.4

Movable Properties

Gift of movable properties may be completed by delivery of

possession. Registration is optional it is not compulsory.

Accordingly, gift of a movable property effected by delivery of

possession is valid irrespective of the valuation of property. The

mode of delivering the property to donee depends upon the

nature of property.5All that is necessary is that donee gets title as

well as possession of the gifted property. Delivery of goods

(movables) may be made by doing anything which the parties

agree shall be treated as delivery or which has the effect ofputting the property in possession of the transferee (donee).

4Sher Khan vs. State of Orrisa, AIR 2008 Ori 945See Sction 33of the Sales of Goods Act, 1930


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Transfer process of Gift

Gift how to be made: Section 122 defines gift to mean the

transfer of certain moveable or immoveable property made

voluntarily and without consideration by one person to another

and accepted by or on behalf of the latter. But how the gift

becomes effective is given under Section 123. It is seen that the

gift of immoveable property should be made only to transferring

the right, title and interest by the donor to the donee by a

registered instrument signed by or on behalf of the donor and

must be attested by at least two witnesses. In the absence of any

registered instrument of gift and acceptance thereof by the

donee, the said property could not be said to have been legally

transfe, it is not rred and therefore the gift is not complete in the

eyes of law.

In the case of Gift Tax Officer vs Dr. V. Srinivasan on 29

January, 2002.The Honble High Court held as under:

Section 123 of the Transfer of Property Act provides that 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. The

GT Act does not enact any exception to the general law as found

in Section 123 of the Transfer of Property Act. Therefore, in orderto effectuate a valid gift, the requirements of Section 123 of the

Transfer of Property Act should have been complied with. Section

123 of the Transfer of Property Act requires a registered

instrument. There was no instrument in May, 1956, and mere

delivery of possession would not satisfy the requirements of

Section 123 of the Transfer of Property Act. It would, therefore,

follow that there was no gift in the year 1956.


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Therefore, in this case, it was held by the Honble Madras High

Court that mere delivery of possession would not satisfy the

requirements of Section 123 of the Transfer of Property Act. In

the case of the assessee also mere agreement to sell theproperty on 13th April 1981, and mere delivery of property at

that time did not constitute any gift. The ratio of the decision of

the Madras High Court reported in (1980) 124 ITR 233 (Mad)

(supra) is squarely applicable to the facts of the case. If the

formalities required by the law are not complied with, the gift

would not be complete. Therefore, gift of immovable property is

not complete till the properties transferred by registered deed.

Immovable property:

Where immovable property is gifted, the transfer must be

effected by a registered instrument signed by or on behalf of the

donor, and attested by at least two witnesses. A gift of

immovable property is invalid without a registered instrument

even if the intended donee is put in possession. An oral gift is

void in law unless there is a specific statutory provision

dispensing with formalities for gifts as laid in the Act.

Registered Gift Deed Denial Of Execution:

Registered gift deed Denial of execution of, by person by

whom it purports to have been executed Burden of proof of

execution is on party relying upon deed and burden has to be

discharged by calling at least one of attesting witnesses to prove

execution Where burden has not been discharged, deed cannot

be used as evidence of gift. Held: Section 123 of the Transfer of

Property Act, requires the specific mode in the matter of

execution of gift of immoveable property. That gift of immoveableproperty can be made only by the execution of the registered


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in future. In other words, person making the gift may provide

that the interest in gifted property will stand conveyed or

transferred as per deed either in present or in future. In the

deed, it has to be looked into to ascertain the intention of theparties, whether the transfer has been effected in present or in

future, Expression lastly used in the document, you shall enjoy

the above mentioned property and live, as you wish after you

attained majority and got married. These expressions have to be

taken as controlled by the expression used earlier that the

intention of the author is that the right and title as an absolute

owner of the property should pass on to the donees on the

fulfillment of those conditions. That as the document appears to

have been executed with the object of the marriage and the

effect of it is that donees could get absolute ownership under the

deed on the fulfillment, of both the conditions, namely, attaining

the age of majority by both of them and they getting married and

until and unless this had so happened, the property had to

remain in possession of the husband of the donor. This action

shows that till the happening of the condition, namely, the

attaining the age of majority by the two donees and their getting

married, the property had to remain in possession of the husband

of the donor, so, the property had not been transferred to the

donees, the transfer could take effect only on the donees

attaining majority and getting married. That as the marriage did

not takes place in the present case and the plaintiff did not marry

the defendants daughter, deed did not become effective to

transfer the title of the property to the plaintiff and defendant 1

and the title of the property re-examined with the donor. Mere

execution of the deed of cancellation at subsequent stage will not

lead to the conclusion that the gift deed had been acted upon.

The deed cancelling the gift deed might have been executed as amatter of mere precaution and for safety protection.


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Hutchegowda v Smt. Jayamma and Another, 1996(2) Kar, L.J.

751.

Attestation of Gift Deed:

In the present case, the gift deed in question has been registered

and the Sub-Registrar makes the necessary endorsements. P.W.

2 has sworn that he had attested the deed. But he has nowhere

stated in his evidence that the executrix namely, Gangavva

affixed her signature or mark to the gift deed in his presence or

acknowledged to him, that she had affixed her signature or mark

to the gift deed. Therefore, his evidence does not satisfy the

ingredients of definition attested. Hence, it will have to be held

that attestation by P.W. 2 and another person as required by law,

has not been proved. Therefore, though Gangavva appears to

have admitted execution of the gift deed as is seen from the

endorsement of the Sub-Registrar, it will have to be held that the

gift deed, though registered, does not satisfy the ingredients of

Section 123 main part. When that is so, no title in law can be

said to have passed from Gangavva to the plaintiffs, even

assuming that Gangavva did have such title to transfer. Anant

Somappa Pattar v Kalappa Devendrappa Yarakad, 1987(2) Kar.

L.J. Sh. N. 177: ILR 1985 Kar. 1432.

Gift proof of attestation. Where the attestor called as witness

says he does not know who else attested and there is no other

evidence, held, the gift deed was not proved as required by law.

Kempamma v Honnamma, 1979(1) Kar. LJ. Sh. N. 85.


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Gift when takes effect:

A gift takes effect from the date of execution of the deed of gift

and not from the date of its registration. A gift takes effect assoon as the instrument of gift, is duly executed and attested is

handed over to the donee and the gift has been accepted by the

donee. A gift of movable or immovable property by a registered

instrument is complete as soon as the donee accepts the same.

Delivery of possession is not necessary unless it is a case of oral

gift under any custom.

Nature of Relation between parties

To make a valid gift of property

The donor is the person who gives. Any person who is competent to

contract can make a gift of his property. A minor, being

incompetent to contract is incompetent to transfer. A gift by aminor is void.

However, a minor can accept gifts. A natural guardian can accept a

gift on behalf of a minor with the condition that the person

nominated in the gift deed will act as a manager of the gifted

property. Such acceptance would amount to recognition by the

natural guardian of the nominated person as the manager or the

agent of the minor for the purpose of the property.

For a valid acceptance

The donee is the person who accepts the gift. A minor may be a

donee. But if the gift is onerous, the obligation cannot be enforced

against him while he is a minor. But when he attains adulthood he

must either accept the burden or return the gift. A gift may be


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accepted by or on behalf of a donee. A donee may also be a person

who is unable to express acceptance. A gift can be made to a child

and could be accepted on the child's behalf. The donee must be an

ascertainable person.

Absence of consideration must

A gift is a transfer without any element of consideration. Complete

absence of monetary consideration is an important prerequisite.

Where there is any equivalent of benefit measured in terms of

money in respect of a gift, the transaction ceases to be a gift.

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Property Law Ayush