Supreme Court Judgement on Registered Gift Deed

Introduction to Supreme Court Judgement on Registered Gift Deed

• A gift is often thought of as the voluntary transfer of ownership of a piece of property by the sender without payment or any consideration of monetary worth. 
• It might be movable or immovable property, and the parties could be two live people, or the transfer could happen only after the transferor’s demise. 
• Inter Vivos refers to transfers made between two live parties, whereas testamentary refers to transfers made after the death of the transferor. 
• Only inter vivos transactions are referred to as gifts under this Act since testamentary transfers are not covered by Section 5 of the Transfer of Property Act. In this blog, we will discuss the Supreme Court judgment on registered Gift Deeds. 

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Essentials of Gift Deed in India

A legitimate gift must have the following five characteristics:

• A change in ownership
• Existing real estate
• Transferring without thought
• Voluntary transfer with unrestricted approval
• Acceptance of the Gift

1. A change in ownership

• The property must be given to the transferee, or donee, by the transferor, or donor, who must give up all rights to it.
• Any rights and obligations about the property are also transferred when absolute interests are transferred. The Supreme Court judgment on registered Gift Deeds has given a different angle to this element of Gift deeds. 
• According to the court’s ruling in the case of CIT Jaipur v. Hirehmal Nawalakha, there may be transfer transactions that do not constitute gifts under Section 122 of the act but are still treated as gifts to be subject to the levy of the gift tax, which has since been eliminated.
• However, there must be a transfer of property, and one can only transfer property using a registered instrument under section 17 of the Registration Act of 1908. This is a Supreme Court judgment on a registered Gift Deed.

1. Existing real estate

• The donation’s property can be of any sort, whether it be moveable or immovable, tangible or intangible, but it must exist at the moment of the gift and be transferable as defined by the Transfer of Property Act. 
• The Supreme Court judgment on registered Gift Deeds has defined this essential in a better way. 
• The court ruled that the gift of a portion of the joint family that was the donor’s share under the preliminary order of partition must be upheld in the case of Munni Lal Mahto v. Chandeshwar Mahto. This is a Supreme Court judgment on a registered Gift Deed.

1. Transferring without thought

• A gift must be gratuitous, meaning that ownership of the item must be given away for no money or other benefit. 
• Even the smallest amount of insignificant property or cash provided by the transferee in exchange for the transfer of a very large asset might qualify as consideration for a sale or an exchange. The Supreme Court judgment on registered Gift Deeds has also upheld this essential. 

1. Voluntary transfer with unrestricted approval

• The donor must give voluntarily, that is, out of his own free will and agreement, which must be given freely. 
• When a donor is completely free to contribute without being subjected to coercion, fraud, or undue influence, this is known as free consent. The Supreme Court judgment on the registered Gift Deed has approved this essential.

1. Acceptance of the Gift

• A gift must be accepted by the donee. Property cannot be given to a person without that person’s consent, not even as a gift. The donee has the same right to refuse the gift as they have with onerous or unfavorable donations of property. 
• A gift is considered onerous when its burden or responsibility surpasses its true market worth. Thus, it is vital to accept the present. Such consent may be given expressly or inferred. The Supreme Court judgment on registered Gift Deeds has elaborated on this essential of Gift deeds. 
• It was determined in the case of R Jamuna Bai v. MA Anusuya that section 122 stipulates that acceptance of a gift must be given while the donor is still alive and capable of giving. The gift is worthless if the donee dies before accepting it since it is a bilateral transaction between two living people. 
• As a result, the acceptance of the gift must be completed before the donor passes away or loses the capacity to make gifts. This was held in this Supreme Court judgment on the registered Gift Deed.
  

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Supreme Court Judgement on Registered Gift Deed 

• In the matter of Nur Bhanu v. Abdul Amis Bhuinya (AIR 2006), the donor’s mental capacity—i.e., his or her ability to enter into a contract—was at issue. 
• In this case, the lower court had found that the donor was mentally sound and capable of executing the deed; as a result, the court declared that this finding could not be changed. 
• In the second appeal, the deed was duly registered and supported by the testimony of the attesting witness, and no conspiracy element was established. 
• Additionally, the suit was filed after three years, so this finding could not be changed either. This is the Supreme Court judgment on registered Gift Deeds.
• In Pratima Choudhury v. Kalpana Mukherjee (2014) 4 SCC 196, the court in this Supreme Court judgment on registered Gift Deed outlined criteria for evaluating legality as per the nature of the transaction in cases of undue influence when the consent of the gift giver is impacted. In such a circumstance, the Court must ask two questions:  

1. Is one party in a position to control the other’s will, given the relationships between the parties?
2. Has the position been utilised to exert excessive influence, i.e., has the position been used to control the will?

• The court ruled in the case of Sulender Singh v. Pritam AIR 2014 that the court will infer that you have influence and will invalidate the gift if the answer to both of the questions in the case is yes. This is the Supreme Court judgement on the registered Gift Deed. 
  

Conclusion

The Supreme Court judgement on registered Gift Deeds has changed the face and complexation of Gift deeds. One must get the Deed of Gift registered to get it enforced in the Court of Law. To get the Deed of Gift registered, one must take legal consultation. Legal consultation not only guides you in a better way but also makes your work done more efficiently. 

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Frequently Asked Questions

Q1. What is a registered gift deed under Indian law?

Ans1. A registered gift deed is a legal document that voluntarily transfers ownership of movable or immovable property from one living person (donor) to another (donee) without any monetary consideration. It must be registered under Section 17 of the Indian Registration Act, 1908, to be legally enforceable.

Q2. What are the essentials of a valid gift deed in India?

Ans2. A valid gift deed must include: a transfer of ownership, existing property, absence of consideration, voluntary and free consent, and acceptance by the donee. These essentials have been reiterated in various Supreme Court judgments on registered gift deeds.

Q3. Is registration of a gift deed mandatory in India?

Ans3. Yes, according to Section 17 of the Indian Registration Act, 1908, registration of a gift deed is mandatory to validate the transfer of immovable property. Unregistered gift deeds are not enforceable in a court of law.

Q4. Can a gift be made for future property?

Ans4. No, a gift must involve existing property that the donor legally owns at the time of the transfer. Future property or interests cannot be transferred as gifts under the Transfer of Property Act.

Q5. What did the Supreme Court rule in Nur Bhanu v. Abdul Amis Bhuinya?

Ans5. In this case, the Supreme Court upheld the validity of a registered gift deed, ruling that the donor was mentally sound at the time of execution. The court emphasized the importance of registration and timely legal action when challenging such deeds.

Q6. What is the significance of acceptance in a gift deed?

Ans6. Acceptance by the donee is essential for the gift deed to be valid. The Supreme Court ruled in R. Jamuna Bai v. M.A. Anusuya that acceptance must occur while the donor is alive and competent. Without acceptance, the gift is void.

Q7. Can undue influence invalidate a gift deed?

Ans7. Yes, if undue influence is proven, the gift deed can be declared invalid. In Pratima Choudhury v. Kalpana Mukherjee, the Supreme Court held that gifts made under influence, where one party controls the will of the other, are not legally binding.

Q8. What happens if a gift deed is executed under coercion?

Ans8. If coercion or fraud is involved in the execution of a gift deed, it becomes voidable. The Supreme Court has clarified that free consent is a fundamental requirement for a valid gift under Section 122 of the Transfer of Property Act.

Q9. What type of properties can be gifted?

Ans9. Any existing movable or immovable, tangible or intangible property can be gifted, provided it is transferable under the Transfer of Property Act. The donor must have ownership rights at the time of gifting.

Q10. Why is legal consultation important before executing a gift deed?

Ans10. Legal consultation ensures that the gift deed is properly drafted, registered, and free from future disputes. A lawyer can help verify ownership, ensure valid consent, and confirm that all legal requirements are fulfilled as per the latest Supreme Court judgments.