SC: Ownership in property can be gifted without transferring possession.

Today in the matter of S. Sarojini Amma versus Velayudhan Pillai Sreekumar the Hon’ble Supreme Court held that ownership in property can be gifted without transfer of possession of such property. However, the conditions precedent of a gift as defined in Section 122 of the Transfer of Property Act must be satisfied.

The Hon’ble Supreme Court observed that:

(Para 14) Gift means to transfer certain existing moveable or immoveable property voluntarily and without consideration by one person called the donor to another called the donee and accepted by or on behalf of the donee. The execution of a registered gift deed, acceptance of the gift and delivery of the property together make the gift complete. Thereafter, the donor is divested of his title and the donee becomes absolute owner of the property. (Naramadaben Maganlal Thakker Vs. Pranivandas Maganlal Thakker and Others)

A conditional gift with no recital of acceptance and no evidence in proof of acceptance, where possession remains with the donor as long as he is alive, does not become complete during lifetime of the donor. When a gift is incomplete and title remains with the donor the deed of gift might be cancelled. (Para 15)

There is no provision in law that ownership in property cannot be gifted without transfer of possession of such property. However, the conditions precedent of a gift as defined in Section 122 of the Transfer of Property Act must be satisfied. A gift is transfer of property without consideration. Moreover, a conditional gift only becomes complete on compliance of the conditions in the deed. (Para 18)

Copy of Judgement: Judgement 26-Oct-2018

-Tushar Kaushik

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