What is a Gift Deed?
A gift deed is a legal document that can be used to transfer immovable property in accordance with section 122 of the Transfer of Property Act, of 1882. A gift deed includes information about the property, the transferrer, and the recipient, similar to what a sale deed does. However, it permits ownership transfers without monetary transactions.
Both section 123 of the Transfer of Property Act and section 17 of the Registration Act, of 1908 mandate that a gift deed must be registered with the sub-registrar. If you don’t do this, the transfer will be void.
Giving away one’s property includes transferring ownership to another party via a gift deed. If you want to give a property through a gift deed to someone close to you, you should first think about the financial implications.
A gift deed is a legal document used when someone wants to give money or property to another person. A gift deed can be used to freely transfer ownership of movable or immovable property from the donor to the donee. A gift deed enables the owner of the property to give the property to anyone and avoids any potential inheritance or succession conflicts in the future. The transfer of property occurs immediately, unlike in the case of a will, and you won’t need to visit a court of law for the gift deed’s execution, saving you time as well. A registered gift deed is also proof in and of itself.
Properties that can be transferred through a Gift Deed
A gift can be given by the donor to the donee including both moveable and immovable property. The immovable property does not contain growing crops, standing timber, or grass, but it does include land and any benefits derived from it. The properties that aren’t categorized as immovable ones are referred to as moveable properties.
However, the donor is restricted to giving just those assets that are present at the time the gift deed is registered. He cannot give away any property that he anticipates or will acquire in the future. Only the property that the donor is legally the owner of may be donated. When making the gift, the donor must already be the owner of the item.
How to register a Gift Deed?
The Registration Act of 1908’s guidelines is followed for registering a gift deed. The following are typical steps in the registration process:
A certified valuation expert must evaluate the property.
It is necessary to pay the proper transfer and stamp taxes. Men and women pay different amounts of stamp duty, which is often less for women. Since stamp duty is determined by the state list, it differs from state to state.
Can a Gift Deed be challenged?
By filing a lawsuit for such a declaration, the gift deed can certainly be called into question in a court of law. However, it will only be challenged if you can prove that the deed was executed against the donor’s wishes or under false pretences, such as fraud or deception. Here are some reasons for contesting a gift deed:
1. If the gift transfer consent was not freely given;
2. If no other gifting party was legally capable of entering into a contract,
3. When the givers fail to meet a conditional gift’s requirements.
4. The gift deed can be revoked in this situation.
5. The gift deed would not be valid if it included any payment for the gift.
Essentials to make a gift valid:
- Property: Moveable or immovable property may be given as a gift. It has to be an existing building. Future assets cannot be transferred
- Acceptance of gift: The donee, or someone acting on his behalf, must accept the gift. If the gift is not accepted while the donor is still alive, it is void. It is void if the donee passes away before accepting the gift.
- Parties must be competent to contract: The donor must be a legal adult who is able to enter into agreements. A minor is ineligible to donate. A minor may, nevertheless, be a donee. In this situation, a guardian must accept the gift on his behalf.
- Consideration: In a gift, there is no exchange for money. There can be a conditional gift such that the condition is not based on the donor’s will or pleasure. Until the conditions are met, the conditional gifts are not complete.
- Voluntarily: The gift has to be made with free consent. Free consent implies the absence of
- Undue influence
- Registration: A gift deed made for transferring immovable property has to be registered compulsorily as per The Registration Act, 1908. The gift deed has to be signed by the parties and attested by two witnesses.
Grounds for challenging the Gift Deed:
A gift deed can be challenged if any of the above-mentioned legal requirements for making a gift transaction valid have not been complied with, like:
- Consent was not free.
- Gift deed not executed and registered as per legal provisions
- Parties not competent to contract
- Consideration is present.
- Acceptance not made
- If the gift is conditional and the condition is not fulfilled, gift deed can be revoked.
Revocation of gift deed:
- Any legally permissible cause that is available for cancelling a contract may be used by the giver to revoke the gift deed.
- Revocation by agreement – Both the donor and the donee may have agreed at the time of the gift’s formation that the gift may be revoked in the case of an event that is independent of the donor’s will.
- At the time the gift deed is executed, the donee should be constantly reminded of the conditions for cancelling the gift.
- Revocation of the gift unilateral is not permitted.
The donor may rescind the gift deed if the donation is completed and the title is still theirs.
When to file suit for cancellation of gift deed:
A civil lawsuit for the cancellation of a gift deed may be filed within three years of discovering that there is legal grounds for doing so.
If both parties agree, a gift deed may also be revoked by means of a cancellation deed.
Gifts were made by people a long time ago and earlier there were no such disputes as such but with the changing mentality and culture, many people consider the transfer of property as a safe and a way through which future disputes could be hindered. To make the situation balance for those in whose favour a gift deed is not made law has provided remedies through which a wrong gift deed can be challenged.
Niranjan Kaur vs. Nirbigan Kaur
In this regard, the decision relied upon by learned counsel for the petitioner in Om Parkash’s case (supra) comes to her rescue because in that case also, there was a dispute with regard to the registered gift deed, challenged on the ground of fraud and the plaintiff had claimed himself to be in possession. This Court made an extensive reference to the decisions in the cases of Gobind Kaur v. Pritam Singh, The Punjab Law Reporter, Vol. LXXVII-1975 page 6, Jagat Singh v. Avtar Singh, 1970 Crl. Law Journal, 80, Niranjan Kaur v. Nirbigan Kaur, AIR 1981 (P&H) 368, Mast. Nand Kaur v. Gurdev Kaur, Vol. LXXIX-1977 PLR 500, Chhota Singh v. Jit Singh, AIR 1975 Punjab and Haryana 316(1), Kamla Prasad v. Jagarnath Prasad, AIR 1931 Patna, 78, Surjit Singh v. Karamjit Kaur, 2012 (3) R.C.R (Civil) 364 and Suhrid Singh @ Sardool Singh v. Randhir Singh, 2010 (2) RCR (Civil) 564 and ultimately opined that in such circumstances, the plaintiff is not required to pay the ad valorem court fee. A similar view has been expressed by this Court in Surjit Singh’s case (supra).
Jagat Singh vs. Avtar Singh And Others
In this regard, the decision relied upon by learned counsel for the petitioner in Om Parkash’s case (supra) comes to her rescue because in that case also, there was a dispute with regard to the registered gift deed, challenged on the ground of fraud and the plaintiff had claimed himself to be in possession. This Court made an extensive reference to the decisions in the cases of Gobind Kaur v. Pritam Singh, The Punjab Law reporter, Vol. LXXVII-1975 page 6, Jagat Singh v. Avtar Singh, 1970 Crl. Law Journal, 80, Niranjan Kaur v. Nirbigan Kaur, AIR 1981 (P&H) 368, Mast. Nand Kaur v. Gurdev Kaur, Vol. LXXIX-1977 PLR 500, Chhota Singh v. Jit Singh, AIR 1975 Punjab and Haryana 316(1), Kamla Prasad v. Jagarnath Prasad, AIR 1931 Patna, 78, Sutjit Singh v. Karamjit Kaur, 2012 (3) R.C.R (Civil) 364 and Suhrid Singh @ Sardool Singh v. Randhir Singh, 2010 (2) RCR (Civil) 564 and ultimately opined that in such circumstances, the plaintiff is not required to pay the ad valorem court fee. Similar view has been expressed by this Court in Surjit Singh’s case (supra).
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