The Transfer of Property Act enumerates how an immovable property is transferred by way of gift. A transaction of gift should be done (1) by a registered document (2) be signed by or on behalf of the donor and (3) be attested by at least two witnesses.
An immovable property may be transferred by way of a gift only by way of a written document, called a gift deed. The document of the gift has to be read harmoniously as a whole giving effect to all the clauses contained in the document which manifest the intention of the persons who execute the document. In construing a document of gift whether in English or in any Indian language, the fundamental rule to be adopted is to ascertain the intention from the words employed in it. The surrounding circumstances may be considered for the purpose of ascertaining the intended meaning of those words, especially when there is some ambiguity in the words used in the document.
Registered instrument means registration of a document under the law for the time being in force regulating the registration of documents. The applicable law is the Registration Act, 1908, and Section 17(1)(a) of the Act makes instruments of gifts of immovable property compulsorily registrable.
A gift deed in respect of an immovable property ought to be presented for registration in the office of the sub-registrar within whose sub-district the whole or some portion of the property to the owner which such documents relate is situate.
A gift deed has to be presented for registration within four months from the date of its execution. The time for registration may be extended by the sub-registrar under Section 25 of the Registration Act if owing to urgent necessity or unavoidable accident, the document is not presented for registration within the stipulated time.
Section 47 of the Registration Act provides that a document is operative from the date of its execution and not from the date of its registration, even if there is a gap of four months or permitted extended period between the date of execution and date of registration.
Since a gift deed is a document which is compulsorily registrable, its non-registration within the stipulated time or extended stipulated time would fall within the mischief of Section 49 of the Registration Act. The effect of non-registration would be that it will not transfer the right, title and interest in the immovable property which is intended to be transferred by way of a gift deed. The donor would continue to be the owner of the property which was transferred.
Under Section 49 of the Registration Act, therefore, a gift of immovable property is not valid unless it is effected by a registered instrument. The section necessarily implies that such a document by reason of its execution alone cannot have the effect of transferring the property. The pre-existing rights, titles and interest of the donor stand divested in the done only when the gift deed is duly registered and thereafter the donor would lose title to the property.
Another effect of non-registration of the gift deed is that it shall not be read in evidence.
With the exception of Muslims, oral gifts of immovable properties are not permitted.
Attestation by at least two witnesses
A gift deed requires attestation of the same by at least two witnesses. Gift deed is one of the few documents, which, by law, requires the presence of witnesses.
Possession of the immovable property is not a pre-requisite of gift. A movable property can be transferred by way of gift either by registered instrument or by delivery of possession. An immovable property cannot be transferred by merely delivery of possession.
A gift is void in case of sole done, where the donee dies before the gift is accepted and in case of more than one donee, it is void against the donee, who does not accept the gift.
A gift may be suspended or revoked by an agreement between the donor and the done, on the happening of a specified event. A gift may also be revoked if the same is vitiated by coercion, undue influence, fraud, misrepresentation or mistake.
Any obligation attached to the gifted property passes on to the done with the transfer of immovable property. Every instrument is chargeable with stamp duty under the Indian Stamp Act. A gift deed would be impounded if the same is not adequately stamped by the authorized person in terms of the Indian Stamp Act.