Transfer of Property Act defines a gift deed under section 122 as a legal document that describes the voluntary transfer of immovable property as a gift from a donor to done without exchange of money. The donor is a person who transfers a property and the donee is who receives the property.Registering a gift deed with the sub-registrar is mandatory as per the Registration Act, 1908, and as of the Transfer of Property Act. If it is not done as per the procedure the transfer will be invalid.The appropriate stamp duty and transfer duty must be paid for registration. Stamp duty is subject of the state list and varies from state to state.Since contracts with a minor is void, and a gift deed is a legal contract, Minor is not eligible as a donor to transfer a property as a gift and therefore in a gift deed where the minor is the transferrer, is not valid in the eyes of law.In a circumstance where the donee is a minor, a natural guardian has the right to accept the gift on his behalf.Once a gift deed is registered in the name of the person who received it, only then the person can apply for mutation of the property. Mutation is necessary to transfer benefit connections in the name of the receiver. Also, for the receiver to be able to further transfer the property, a registered gift deed will be necessary.In case where the donee is a minor, a guardian has the right to accept the gift on his/her behalf.The gift deed can be questioned by filing a suit for declaration in the court of law. However, it will be challenged only if the person is able to establish that the execution of the deed was not as per the wish of the donor and was executed under fraud, coercion,misrepresentation etc.
What is Suit of Declaration?
A “Declaration” is discretion of a court or legal pronouncement by a court of law in respect of a person’s right to the property.
Any person entitled to any legal such character, or to any right to a property may file a suit against any other person denying or interested to deny, his title to such right in the property, and the court may in its discretion make therein a declaration that he is so entitled, and the plaintiff need not in such a suit ask for any further relief.
The Suit for declaration is to declare a right of the party/plaintiff and when the right is pertaining to property, the suit is for declaration title/ownership and also for recovery of possession.
There are grounds by whicha Gift Deed can be challenged:
A gift deed can be challenged if the above mentioned legal requirements for making a gift transaction valid have not been complied with.
- If Consent was not free.
- If the gift deed not executed and registered as per legal provisions
- If the parties not competent to contract.
- If consideration is paid.
- If the gift is conditional and the condition is not fulfilled by the recipients, gift deed can be revoked
Procedure for revocation of a gift deed :
Section 126 of the Transfer of Property provides some conditions where a gift can be revoked.
- There must be an agreement between the donor and donee that the gift shall be revoked or suspended on the happening of a particular event;
- happening of this event must not depend on the will of the donor;
- The condition as to the revocation should be agreed to by the donee at the time of accepting the gift.
- There must exist a ground, except failure of consideration, on which a contract may be rescinded.
- The condition for revoking the gift deed should be clear and must not be repugnant to the estate created under the gift.
- A gift, which was not based on fraud, undue influence or misrepresentation, cannot be canceled unilaterally. Such a gift deed can be revoked only by resorting to legal remedy in a competent court of law.