Gifts, The Transfer of Property Act

Gift means to transfer certain existing moveable or immoveable property voluntarily and without consideration by one person called the Donor to another called the Donee and accepted by or on behalf of the Donee as held by the Supreme Court in Naramadaben Maganlal, (1997) 2 SCC 255. As further held: “It would be clear that the execution of a registered gift deed, acceptance of the gift and delivery of the property together make the gift complete. Thereafter, the Donor is divested of his title and the Donee becomes absolute owner of the property.”  

A conditional gift with no recital of acceptance and no evidence in proof of acceptance, where possession remains with the Donor as long as he is alive, does not become complete during lifetime of the Donor. When a gift is incomplete and title remains with the Donor the deed of gift might be cancelled.

In Reninkuntla Rajamma, (2014) 9 SCC 445 a Hindu woman executed a registered gift deed of immovable property reserving to herself the right to retain possession and to receive rent of the property during her lifetime. The gift was accepted by the Donee but later revoked. In Reninkuntla Rajamma, this Court held that the fact that the Donor had reserved the right to enjoy the property during her lifetime did not affect the validity of the deed. The Court held that a gift made by registered instrument duly executed by or on behalf of the Donor and attested by at least two witnesses is valid, if the same is accepted by or on behalf of the Donee. Such acceptance must, however, be made during the lifetime of the Donor and while he is still capable of making an acceptance.

We are in agreement with the decision of this Court in Reninkuntla Rajamma that there is no provision in law that ownership in property cannot be gifted without transfer of possession of such property. However, the conditions precedent of a gift as defined in Section 122 of The Transfer of Property Act, 1882 must be satisfied. A gift is transfer of property without consideration. Moreover, a conditional gift only becomes complete on compliance of the conditions in the deed.

In the instant case, admittedly, the deed of transfer was executed for consideration and was in any case conditional subject to the condition that the Donee would look after the Petitioner and her Husband and subject to the condition that the gift would take effect after the death of the Donor. We are thus constrained to hold that there was no completed gift of the property in question by the Appellant to the Respondent and the Appellant was within her right in cancelling the deed.

Hon’ble Justice Indira Banerjee, S. Sarojini Amma v. Velayudhan Pillai, [Civil Appeal No. 10785 of 2018].