A gift deed is a legal document that is used when someone wants to give their money or property to someone else. A gift of property may be made in the name of any person who is alive at the time the gift is made. During the donor’s lifetime, the donee or anyone else on his behalf must accept the gift of the property. Except in limited circumstances, a gift of property cannot be revoked. Some of the essential elements of the gift are: a) It must be movable or immovable property, b) It should be transferable, c) It should not be a future property; it must exist now, d) It must be tangible. Section 126 of the Transfer of Property Act of 1882 deals with suspending or revoking a gift. Section 126 states that the donor and donee may agree that on the happening of any specified event which does not depend on the will of the donor a gift shall be suspended or revoked. So, while drafting the gift deed the donor can even state whether or not a revocation clause should be included in the gift deed by the donee. This gift deed clause must be agreed upon by both the donor and the donee. This article aims to cover the reasons and procedure for cancellation of gift deed in India and some important judgments on the same.
- Revocation of a Gift Deed
Indian law allows you to give your property to whomever you want. A person may, on occasion, reconsider their decision to give an expensive item as a gift. The donor has the right to cancel the gift transaction for a variety of reasons, including the receiver’s inability or refusal to accept the gift.
1.1 Grounds for Terminating a Gift Deed
After the property has been legally gifted, it becomes the donee’s and cannot be easily revoked. However, under Section 126 of the Transfer of Property Act of 1882, revoking a gift deed may be permitted in the following circumstances:
a) If the gift deed was obtained through coercion or fraud: A gift can be revoked if it can be demonstrated that the donor’s consent was not given freely, as gifts are voluntary transfers of ownership from the donor to the donee. A gift deed may be revoked on any grounds that a contract may be revoked, according to Section 126 of the Transfer of Property Act (1882). According to Section 19 of the Indian Contract Act (1872), in circumstances where the donor’s consent was obtained through coercion, undue influence, fraud, or misrepresentation the gift contract may be voidable at the donor’s discretion.
b) Rescission by agreement: At the time of making the gift, the donor and donee may agree that the gift may be revoked if an event occurs that is not dependent on the donor’s will. The condition for revoking the gift should be made clear to the donee when the gift deed is executed. It is not possible to revoke the gift unilaterally.
In such cases, even if the donor dies, his legal heirs can proceed with the gift deed revocation. All gifts that are revoked on these grounds must be done within three years of the donor learning of it.
c) If the gift is incomplete and the donor holds the title: If a gift is incomplete and the title to the property is still held by the donor, the gift deed may be canceled. Some of the reasons that make a gift incomplete include an unregistered gift deed, insufficient payment of stamp duty, improper attestation of a gift deed, the donee’s failure to sign the gift deed, the gift relating to future real estate, a donee who refused to accept the gift deed, or the gift not being accepted while the donor was alive.
1.2 Procedure for cancelling the Gift Deed
• One of the parties may revoke the Gift Deed by filing a suit for cancellation of the Gift Deed with minimal court costs. Even if they are not a party to the Gift Deed, anyone who wishes to declare the Gift Deed invalid must file a Declaration Suit.
• According to Article 59 of the Limitation Act of 1963, a person seeking to cancel the Gift Deed (the plaintiff) has three years from the date he or she learns of the fact that entitles him to do so to have the Gift Deed cancelled or set aside.
• If a lawsuit is not filed within three years, a delay pardon may be requested under Section 5 of the Limitation Act.
• However, it should be noted that a person who has been in adverse possession of the property for 12 years acquires the title to it, and possession cannot be reclaimed from him after that time, in accordance with Articles 64 and 65 of the Limitation Act.
• Therefore, even if the delay is justified, the maximum time for canceling a gift deed and regaining possession is 12 years from the date adverse possession becomes known.
- The Court held in Mool Raj v. Jamna Devi (1995) that unconditional gifts cannot be revoked by the donor. A condition established by separate mutual agreements between the donor and the donee concerning the gift deed is valid and enforceable. As a result, they may be grounds for rescinding the gift. The Court stated this in the case of Thakur Raghunath Ji Maharaj v. Ramesh Chandra (2001).
- In the case, S. Sarojini Amma v. Velayudhan Pillai Sreekumar (2018) the Supreme Court stated that “there was no completed gift of the property in question by the appellant to the respondent, and the appellant had the right to cancel the deed.” The Court stated that the deed of transfer was executed for consideration and was, in any case, conditional on the donee looking after the petitioner and her husband and on the gift taking effect after the donor’s death. As a result, the Court determined that there was no completed gift of property and that the appellant was within her rights to cancel the deed.
- The Bombay High Court ruled in the case Pritish Natvar Sanghvi v. Natvar Keshavlal Sanghvi (2018) that elderly parents can take back a share of their property given to a son as a gift if he fails to look after them or harasses them. A division bench of Justices Ranjit More and Anuja Prabhudesai upheld a tribunal’s order that had cancelled a gift deed given by an elderly Mumbai-based resident in which he had granted a 50% share in his flat to his son, citing the special law for the maintenance of senior citizens.
According to the Maintenance and Welfare of Parents and Senior Citizens Act of 2007, if a senior citizen agrees to transfer his or her share of the property as a gift deed on the condition that their basic needs be met, but is mistreated, a maintenance tribunal has the authority to annul the agreement. The Act also includes provisions to protect elderly parents who have been abandoned.
A gift deed is used to legally transfer movable, immovable, or transferable existing property from the donor to the donee. According to the gift deed, the property owner may give the property to anyone, avoiding any potential inheritance or succession disputes in the future. A registered gift deed is evidence in and of itself, and it eliminates the need for the person to appear in court for the execution of the gift deed, saving time. The Transfer of Property Act of 1882 includes provisions for gift deeds and cancellation of gift deeds. It cannot be revoked unless the revocation conditions are met or the donee has accepted the property from the donor under duress.
- Mool Raj v. Jamna Devi and Ors AIR 117 (HP 1995)
- Pritish Natvar Sanghvi v. Natvar Keshavlal Sanghvi AIR 5 (BOM 2018)
- S. Sarojini Amma v. Velayudhan Pillai Sreekumar (Civil Appeal No. 10785 of 2018)
- Thakur Raghunath Ji Maharaj & Anr vs. Ramesh Chandra (Civil Appeal No. 6972 of 1999)
- See Anuradha Ramamirthan, Everything you need to know about gift deed, housing.com (Feb 22, 2022) https://housing.com/news/everything-you-need-to-know-about-gift-deed/ (Last visited Sept. 17, 2022)
- See Athira R Nair, All about will, gift deed, relinquishment deed and their revocation, blog.ipleaders.in (March 4, 2022) https://blog.ipleaders.in/all-about-will-gift-deed-relinquishment-deed-and-their-revocation/#Gift_deed_an_overview (Last visited Sept. 17,2022)
- See Bhavya Choudhary, All about the Cancellation of the Gift Deed, ezylegal.in https://www.ezylegal.in/blogs/all-about-the-cancellation-of-the-gift-deed (Last visited Sept. 16, 2022)
- The Indian Contract Act, 1872, Acts of Parliament, 1872 (India) s.19.
- The Limitation Act, 1963, Acts of Parliament, 1963 (India)
- The Transfer of Property Act, 1882, Acts of Parliament, 1882 (India) s.126.
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