Concept of Gift – Kinds & Essential Elements of Valid Gifts

Concept of Gift – Kinds & Essential Elements of Valid Gifts

Introduction and Meaning:

The gift is a voluntary transfer of personal property without consideration; a parting by owner with property without pecuniary consideration; a voluntary conveyance of land; on the transfer of goods, from one person to another, made gratuitously and not upon any consideration of blood or money. The essential requisites of ‘gift’ are the capacity of the donor, the intention of the donor to make a gift, completed delivery to or for the donee, and acceptance of the gift by the donee. A gift is undoubtedly a transfer that does not contain any element of consideration in any shape or form. In fact, where there is any equivalent benefit measured in terms of money in respect of a gift, the transaction terminates to be a gift and assumes a different color.

Kinds of Gifts:

1.Void Gifts:

The category of void gifts are as follows: –

  1. It is for illegal purposes.
  2. It is made upon a condition, the fulfillment of which is prohibited by law.
  3. It is by a person incompetent to contract.
  4. The donee dies before acceptance.
  5. It comprises of both the existing and future property is void as to future property.

2.Onerous Gifts:

A gift is burdened with an obligation, where a gift is in the form of a single transfer to the same person of several things of which one is, and the others are not, burdened by an obligation, the donee can take nothing by the gift unless he accepts it fully.

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When a gift is in the form of two or more separate and independent transfers to the same person of several things, the donee is at liberty to accept one of them and refuse the others, although the former may be beneficial and the latter onerous. The following elements are essential: –

  1. It must be in the form of a single transfer;
  2. To the same person;
  3. Of several things;
  4. Of such thing, only one is burdened with obligation and others are not.

Illustrations:

A has shares in X, a prosperous joint-stock company, and also shares in Y, in difficulties. Calls are expected in respect of shares in Y. A gives B all his shares in joint-stock companies. B refuses to accept the shares in Y. He cannot take the shares in X.

Suspension or Revocation of Gifts: –

A gift is a transfer of ownership without consideration. A pit of the gift once executed and registered cannot be canceled unless it can be shown that the mandatory requirements of the section were complied with. It can be made subject to a certain condition. It is necessary that these conditions must be valid conditions according to this Act.

A gift once made is irrevocable, except in the following cases provided in this section:
a. It is revocable if the donor and the donee have agreed that on the happening of a specified event, the gift should be suspended.

  1. It may also be revoked in any of the cases in which, if it were a contract, it might be annulled.

Essentials of a Valid Gift:

1)Attestation– A gift deed, must be attested by two witnesses.

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2)Recitals– Recitals in the commencement are drafted in a form different from those in other forms. The gift documents in India commence by the introduction of the donor himself.

3)Deed of Transfer– The deed should be drafted as a deed of transfer, if necessary. As there is no consideration, none need be expressed although consideration of “natural love and affection” is generally expressed in all cases of gift to relations, and “consideration of esteem and regard” is expressed when the gift is in favor of some person for whom the donor has regarded.

A gift is generally, absolute and irrevocable, but a condition of revocation on the happening of a specified event not depending on the will of the donor is valid and a gift may be burdened with obligations.

4)Registration of Gift-Deed– Registration of gift of immovable property, if a deed is at all implemented, of movable property, is compulsory, under Registration Act, whatever may be the value.

Concept of Universal Donee:

Where the gift consists of the giver’s whole property, the donee is personally liable for all the debts due by all liabilities of the donor and at the time of the gift to the extent of the property contained within. The donee holds the entire property of the donor, he is a universal donee. A universal donee is liable only to the extent of the property received by him under the gift and not duly applied by him towards the payment of the donor’s debts.

A universal donee, who, by reason of a gift, enters into possession of the estate of the deceased donor, becomes his legal representative. He takes the estate of the deceased donor, subject to his liabilities as this section affixes a personal liability upon the universal donee, for all the debts due by the donor at the time of the gift, though such liability is confined only to the extent of the properties comprised in the gift. The liability of the universal donee to pay the debts of the donor arises not only by the reason of the donee accepting the gift and being the legal representative of the deceased but also by the very terms under which he becomes a universal donee.

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The section applies only where the gift is of the donor’s whole property. Where after such a gift, the donee gives back some property to the donor for which he agrees to the payment to the donee, this fact does not prevent him from being a universal donee since-

  1. for all the purposes, the claimant holds the entire property of the donor and;
  2. dealings subsequent to the gift cannot affect the nature of the gift after it has become been completed.

Author: Shreya Potdar,
S.N.D.T LAW COLLEGE

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