Subject: Property Law I Title of the project: Prepare a Valid gift deed of FLAT

(4 BHK) between two parties on the consideration of 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

CERTIFICATE
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

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

INDEX

1. Introduction 2. Types of gifts 3. Essentials of Gift 4. Gift Deed 5. Transfer of gift depending upon nature of property 6. Transfer process of gift 7. Mode of Transfer of gift 8. Nature of relationship between parties 9. Gift deed 10. Property Declaration Affidavit

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 provisions of this Act are applicable only to gifts inter vivos. Definition of Gift: Section 122 of the Transfer of Property Act, 1882 defines 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 gift of both movable as well as immovable property. The transferor is called donor and the transferee is called donee.
1

. The

Under 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.
1

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 of majority 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 monetary

consideration 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

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 and 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 done.

Types of Gifts:
The two principal categories of gifts are: Inter vivos gifts Causa mortis gifts.

Inter vivos gifts: Inter vivos is 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 since something 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.

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

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 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. 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 donor dies, the gift is a testamentary one. The law in each jurisdiction is

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, the donee 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.

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 from physically 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.

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

(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 by two 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 must but 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 not fulfilled, 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

2 3

AIR 1997 SC 127 Radhika Devi vs. Rajesh Kumar Niranjan, AIR 2009 Pat 109

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 was mentioned 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 of putting the property in possession of the transferee (donee).

4 5

Sher Khan vs. State of Orrisa, AIR 2008 Ori 94 See Sction 33of the Sales of Goods Act, 1930

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 order to 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.

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 the property 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 immoveable property can be made only by the execution of the registered

deed attested by two witnesses. . The law prescribes the specific mode that it must be effected by a registered instrument or deed signed by or on behalf of the donor and attested by at least two witnesses. Section 68 of the Indian Evidence Act, 1972 required the production of at least one of the attesting witness to prove its execution. Compliance with the provisions of Section 68 or 69 of the Indian Evidence Act is necessary to make gift deed admissible in evidence. None of the attesting witnesses of the deed has been examined in this case to prove the execution thereof. The deed dated 29-11-1960 could not be used as evidence and its execution cannot be said to have been proved. Smt. Flora Margaret v A. Larwence, 2000(6) Kar. LJ. 27B.

Mode of Transfer of gift:

Transfer of property under Mode of transfer Gift deed may provide for transfer of existing property to donee at future date and/or on happening of certain events Intention of donor to be gathered by reading deed as a whole No word thereof to be ignored as meaningless Effect to be given to every part of deed Where gift deed in favor of two minor donees jointly concludes with words you shall enjoy property and live as you wish after you have attained majority and got married, the words to be interpreted that gift would take effect oniy when donees marry on attaining majority Property not conveyed to donees as marriage between them did not take place. Held: A reading of Section 123 along with Sections 122 and 5 of the Act, it appears to me that in the matter of gift also, transfer or conveyance of the property may be provided to take place in present or in future. The gift deed may also provide that the transfer may be effective on the happening of certain conditions

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 the parties, 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 a matter of mere precaution and for safety protection.

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.

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 as soon 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 minor 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. a gift of his property. A minor, being incompetent to contract is incompetent to transfer. A gift by a

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

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.