Cancellation of a Gift Deed in India

As the name suggests, in India, a gift is referred to as something (may it be money, a present or any thing whether moveable or immoveable) being given to someone without any consideration in return is called as a Gift. Similarly, in legal terms, a gift involves the transfer of ownership of a property which may be moveable or immoveable, that shall be delivered by one person to another, without any consideration is called a Gift Deed. The person who will deliver the gift is the Donor and the person who will accept the gift is the Donee.

Legal Provisions of Gift

As per Section 22 of the Transfer of Property Act, 1882, a “Gift” is a “transfer of certain existing moveable or immoveable property made voluntarily and without any consideration” by the Donor to the Donee, which is accepted by or on behalf of the Donee.

Essentials of a Gift Deed

• The property that is being transferred must be transferable as per Section 5 of the Transfer of Property Act, 1882.
• The Donor shall transfer the ownership to the Donee.
• Such a transfer must be conducted without any consideration or remuneration in return and with the free consent (voluntarily) by the Donor.
• The acceptance to the gift by the Donee must be made during the lifetime of the Donor when he is still capable of giving.
• A gift that would be transferred may it be moveable or immoveable shall be existing in real during the time of transferring of ownership.
• The quintessential factor to the trasnfer of such a gifted propery shall be the delivery of possession.
• If at any point of time, the Donee dies before accepting such a gift by the Doner, it shall become void.

Can a Gift Deed be cancelled? Is it possible?

As the law prescribes, it is for sure possible to cancel a gift deed, however such a condition must be considered and included on the dot in the registered Gift Deed. To be precise, as per Section 126 of the Transfer of Property Act, 1882, a gift deed cannot be revoked or cancelled anytime after the acceptance of the same if so, is not specified by the Donor in the gift deed that is registered that she/he wants to keep a rights clause where there shall be an option in the hands of the Donor to evoke the gift at any point of time. Within the purview of Section 126 of the Act, it is now clear that, if the Doner has to revoke his/her gift that is already accepted by the Donnee, she/he shall have to keep in mind to keep a clause in the Registered Gift Deed itself awarding himself/herself a right of revocation at any point of time that she/he feels to revoke.

Furthermore, revocation of a gift is of two types. They are as follows:

• Revocation by Mutual Agreement by the Donor and the Donee.
• Revocation by rescission as a contract.

Revocation by Mutual Agreement by the Doner and the Donee

As the name suggests, if both the parties i.e., the Donor and the Donee agrees upon both of their understandings, then the gift shall stand suspended upon the happening of any event which is not the will of the Donor. Furthermore, it shall be explicitly specified that upon the failure or dissatisfaction of such a condition, the Donor may revoke their gift deed. However, it is to be carefully mentioned that a person (Donor) cannot just solely or single handedly revoke a gift deed, it must be questioned in the Competent Court of law.

Revocation by Rescission as Contract

As mentioned above, a gift is simply a transfer made voluntarily without any consideration. If the party is successful in showing that the gift is not made voluntarily, as well as the consent of the Donee was not free and was obtained out of undue influence or fraud or misrepresentation, the gift may or must be revoked. If the contract itself is revoked for not fulfilling its basic essentials as per Section 10 of the Indian Contract Act, 1872, then the question of any such transfer of ownership for the purpose of gift does not arise.

According to Section 19 of the Indian Contract Act, 1872, “the agreement is voidable if the consent of the party is obtained by coercion, fraud, undue influence or misrepresentation.” In short, it is now evident that if the gift deed is not made voluntarily by the Donor for any or any one of the aforementioned factors, then such a gift or transfer may be revoked by the Donor himself.

Few other modes of revocation of Gift Deed

As mentioned above, the primary and important reasonability of revoking a gift deed is either by mutual agreement or by rescission as a contract. However, there’s more to it. There can be a few other reasons and ways where one can easily revoke the gift. Some of them are as follows:

When Donee fails to accept the Gift

One of the primary essentials of a successful transfer of gift deed also includes the free acceptance and consent from the donee. If the donee refuses or fails to accept the Gift, resulting in non completion of that transfer, then such a gift automatically stands cancelled/ revoked.

Forgery

If the gift or gift deed is later found to be forged, then such a gift deed can also be revoked. Along with that, if the gift is not registered, then such a gift deed can also be revoked.

Who can cancel a Gift Deed?

The right of revocation of a gift deed has only been awarded to the Donor to recuperate the possession of the property so gifted to the Donee upon the happening of a certain event or upon the non fulfillment of a prior condition by the Donee.

Limitation Period to cancel a Gift Deed

As per Article 59 of the Limitation Act, 1963, a person who claims to cancel or revoke a particular gift deed having so transferred to the Donee, has a period of three years in hand from the date of learning of the fact that she/he wants to cancel the gift deed so happened between the Donor and the Donee.

Conclusion

The concept and provision of “Gift” is as old as the emergence of the Transfer of Property Act, 1882 and so is its essentials and factors to properly execute the same. Like the acceptance of a gift deed is upon the discretion of the Donee; the revocation of the gift deed is the discretion of the Donor as that is the right that has been awarded to him by the legal system. The key principle to conduct a successful transfer of gift is to follow up with the basic essentials laid down under the provisions of the act, as well as obtaining fee and fair consent from the Donee.