What is an Onerous Gift?
Section 127 of The Transfer of Property Act, 1882 specifies that- “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.” Where 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.
Based on the Maxim: Quisntit commodum sentire debet et onnus which means that one who receives benefit must bear the burden also.
For e.g. A shares in X, a prosperous joint stock company, and also shares in Y, a joint stock company in difficulty. Heavy calls are expected in respect of the 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.
An onerous gift to disqualified person– A donee not competent to contract and accepting property burdened by any obligation is not bound by his acceptance. But if, after becoming competent to contract and being aware of the obligation, he retains the property given, he becomes so bound.
This section is based on the rule that if a person accepts a gift then he must accept it in totality. This means that he must accept the gift along with all the benefits and liabilities. A person cannot just accept the benefit and reject the liability. He has to accept the gift along with the liability attached to its benefits.
Who is a Universal Donee?
Section 128 of the Transfer of Property Act, 1882 specifies that- “Subject to the provisions of Section 127, where a gift consists of the donor’s whole property, the donee is personally liable for all the debts due by and liabilities of the donor at the time of the gift to the extent of the property comprising therein.” This section tells us that when a person gifts the whole of his property then the donee will be personally liable to all the liabilities attached to the property up to the extent of the property which he got.
For e.g. A gifts his whole property of Rs.1 crore to B to which the liabilities attached are Rs.2 crore. Then in this case B would be liable personally to pay the liabilities up to Rs.1 crore only and not above that because the property he got as a gift was of that value.
In the case of Anirudh Kumar v. Lachmi Chand AIR 1928 All 500, Donee can only be personally liable when the whole of the property is transferred and the benefit of this section cannot be taken in the case where the donor retains even a small part of the property. It is necessary that the whole of the property is to be transferred.
Types of gifts
- Void gifts– Even though it is named as void ‘gift’ it is in fact not a valid gift. If any gift is mane for unlawful purposes or, if made upon a condition, the fulfillment of such a condition is either impossible or forbidden by law or; made by an incompetent person or if the transferee dies before acceptance or if the gift is for both existing and future property, the gift is void to the extent of future property.
Thereby, it can rightly be stated that void gifts are an exception to clearly understand what all will be included under the concept of gift.
- Onerous gifts– Section 127 deals with onerous gifts. These are those kinds of gifts which involves burden or obligation attached to the property.
It is based on the principle “qui senti commode sentire debetet onus’ which means that the person who receives an advantage must bear the burden.
To constitute an onerous gift there must be a single transfer of several properties, one of which is burdened with certain obligations and others not, then the transferee has to abide it to receive all the properties.
- Lifetime gifts– These are the most common type of gift, where the gift is given by the donor for lifetime, mostly these are given at certain occasions like birthdays etc.
For example, Mr. A gifts his son a laptop for his 21st birthday is a lifetime gift.
- Deathbed gifts– These are the gifts given by the donor during his lifetime with the condition that the said gift will be effective only after the donor’s death. This type of gift is also known as donations.
For example, if A wants to sell a part of his property to an Orphanage ‘XYZ’ after his death, it is called as deathbed gifts.
SUSPENSION AND REVOCATION OF GIFTS
Section 126 of the Act provides the legal provisions which must be followed by a donor while making a gift or it may be suspended or revoked. and there are two modes of revocation of gifts:
Revocation by mutual agreement-
When the donor and the donee mutually decides that the gift shall be suspended or revoked upon the happening of an event, it is said to be a revocation by mutual agreement. The conditions of the revocation of the gift must be presented at the time of giving gift itself, it may not be in same document as of the gift but should be presented at the same time. If there is no agreement made at the time of giving the gift and is made after giving the gift then the gift can not be suspended or revoked, it will become absolute.
In TilaBewa v Mana Bewa (AIR 1962 Ori 130), the gift-deed containedan alleged condition that the donee was to look after and serve the donor. The donee left the donor and remarried; the donor cancelled the gift. Thecourt held that to look after the donor was only the donor’s pious wishand not a condition, non-fulfilment of which could enable the donor to revoke or cancel the gift.
REVOCATION BY RESCISSION AS CONTRACTS-
Gift is transfer which is done by free will and consent to the other as a good will not under some pressure. If someone proves that the gift they gave was not due to free will and consent but was due to some influence or pressure on them which forced them to give the gift then the gift can be revoked. As the donor should transfer the gift of his own will not due to some force. If the donor proves that the force was used to take gift from him then the gift can revoked by the donor.
- BOOK- Dr. R.K. Sinha’s The Transfer Of Property Act – Twenty First edition(2021) published by Central Law Agency
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