Gifting property to a loved one might seem like the ultimate gesture of ‘love and affection‘. Viewers of Amazon will recall Maurizio Gucci, who generously showered his wife, Patrizia Reggiani, with luxury estates and riches before realizing that no amount of opulent real estate could secure her undying loyalty.[1] Spoiler alert: the story of ‘House of Gucci’ did not end with a thank-you card but rather a hitman, reminding us that sometimes love fades faster than the ink on paperwork. Therefore, before putting pen to paper, it is worth exploring how the Transfer of Property Act, 1882 (‘TOPA’) views gift of immoveable property. Once a gift deed is signed and sealed, reclaiming that gift might prove more difficult than simply wishing away that questionable decision. After all, as the Gucci saga shows, love and affection can regrettably turn to bitterness — and you might be stuck with more than just a bruised ego.
Primarily, it is important to understand the essentials of a valid gift. A gift must involve transfer of an existing movable and/or immovable property made voluntarily and without consideration, by a competent transferor i.e., donor and accepted by the recipient i.e., donee while the donor is still alive.[2] It is to be noted that TOPA only covers gifts inter vivos i.e., between two living persons. Testamentary gift or a will does not fall under the scope of TOPA. While the essentials of a valid gift seem to be fairly straightforward under TOPA, the process of bringing a gift to effect is often overlooked by the parties. To gift an immovable property, it is absolutely essential to register the gift deed signed by the donor which is duly attested by at least two witnesses.[3] For a movable property, registration is optional and delivery of possession of the said movable property suffices to give effect to the transfer. Having covered the essentials, this piece will now explore the options available to a donor when ‘love and affection’ have taken a backseat, post execution of a gift deed in case of an immovable property.
Once the gift deed is executed and registered, the law under TOPA outlines the conditions under which a gift may be suspended or revoked. It allows the donor and donee to agree that the gift can be revoked or suspended upon the occurrence of a specified event, provided it is not contingent on the donor’s will. Any agreement that permits the donor to revoke the gift solely at their discretion is deemed void, whether partially or entirely. Additionally, a gift can be revoked in situations where, if it were a contract, it could be rescinded.[4] Beyond these provisions, revocation is not permitted. In essence, TOPA offers little assistance to donors hoping to reclaim their gifts, as it explicitly rules out revocation based purely on the donor’s will.
As stipulated under TOPA, a gift deed affecting transfer of an immovable property is mandatorily required to be registered with payment of necessary stamp duty.[5] Further, both the Registration Act, 1908[6] (‘Registration Act’) and the Indian Contract Act, 1872[7] provide that instrument of gift of immovable property is required to be compulsorily registered.[8] Now that revocation solely at the will of donor is out of question, let’s investigate whether any alternative recourse is available to the donor attempting to get out of the obligations under the registered gift deed. There have been instances wherein the donors, in a feeble attempt to cancel a registered gift deed have gone ahead and registered a cancellation deed. The law stands clear that once an alienation has been made in respect of an immovable property by way of execution of a valid registered deed, such registration deed can neither be cancelled unilaterally by the donor nor by the registrar or sub-registrar concerned.[9] Unilateral cancellation or revocation of a gift deed, which is complete, is not permissible legally and such cancellation or revocation is void. [10] As provided under TOPA – ‘a gift may be revoked in any of the cases (for want or failure of consideration) in which, if it were a contract, it might be rescinded.’ This proviso leaves some room for the donor to get out of the obligations under registered gift deed. However, there is a way to exercise this option. One cannot unilaterally register a cancellation deed on the grounds of alleged fraud or undue influence. The jurisprudence is settled that when the donor executed a duly registered gift settlement deed, if the donor wished to cancel the said gift settlement deed, the donor is required to approach the competent civil court for cancellation, questioning the alleged fraud played by the donee. Under no circumstance, the donor can register a cancellation deed unilaterally on alleged fraud. Such cancellation deed is meaningless, void, and non-est.[11]
Likewise, Section 23 of the Maintenance and Welfare of Parents and Senior Citizens Act, 2007 (‘Senior Citizens Act’) provides statutory protection to senior citizens who transfer or gift their properties pursuant to the condition of maintenance or after care from the donee. In other words, Section 23 of the Senior Citizens Act deals with a situation where the transfer of the property is accompanied by a specific condition to provide for the maintenance and needs of a senior citizen. In such an event, if the donee fails to provide the maintenance and physical needs, the transfer of the property is deemed to have been vitiated by fraud, coercion or under undue influence.[12] However, even in such cases the remedy is not for unilateral revocation since the rule of law remains that once a gift deed is completed, it cannot be cancelled or revoked unilaterally. Therefore, even in such cases the senior citizen is procedurally required to challenge the validity of gift deed on the grounds of fraud and other related grounds before the competent court of law.[13]
Interestingly, there may be some hope for donors if for some reason, the gift deed has been executed, but the donor and the donee are dragging their feet on registering the same. The delay may possibly be the perfect window for the donor to make a quick exit—especially if ‘love and affection’ has quietly left the room. In Sumit Kumar v. Naresh Kumar,[14] a gift deed was executed and the donee failed to register the same claiming illiteracy and non-understanding of the legal requirements. In this window, the donor executed a registered sale deed in the name of an unrelated third party. The Court held that ignorance of law cannot be excused, further, a gift deed is unequivocally and compulsorily required to be registered under Section 123 of TOPA read with Section 17 of the Registration Act. An unregistered gift deed for an immovable property leaves no impact.[15] In fact, the subsequent sale deed executed and registered by the donor in the name of third party was held to be valid.[16]
In a rather dramatic turn of events, an elderly couple, the donors, decided to teach their ungrateful son and daughter-in-law a lesson. They executed a gift deed for their immovable property in favour of a family acquaintance, but with no real intention of parting with it — just enough to shake things up. Their plan worked like a charm, and soon enough, the once-indifferent offspring became the epitome of ‘loving and caring’ towards the elderly parents. Having achieved this newfound domestic bliss, the couple returned to the donee in order to reclaim the original property documents, only to discover that the donee had no plans of handing them back. Instead, he was plotting to sell the property. It is to be noted that years had passed but the gift deed was never registered, and donee claimed he was short on funds for the payment of stamp duty which would be payable at registration. The court held that scope of Registration Act allows for registration of gift deed for a maximum period of 8 (eight) months, including unavoidable delays. Further, no specific performance of an agreement to gift can be claimed. Accordingly, a declaration in favour of donors was passed declaring gift deed null and not creating any right, title or interest in favour of the donee. Luckily for the couple, the donee was directed to return back the original documents of the property to the donors.[17]
In conclusion, while gifting property out of ‘love and affection’ is a heartwarming gesture, donors need to avoid being impulsive. The law is clear — unilateral revocation is not an option after registration. Before you sign away your prized assets, make sure your love is anchored in more than just impulsive feelings which might change with time, because once registered, the gift is well and truly out of your hands.
~Donum ingrata saepe poenitentia sequitur~
Written By Probal Bhaduri (Managing Partner) and Aastha Singh (Associate)
[1] Town&Country, ‘How Patrizia Reggiani Became La Vedova Nera – The Black Widow – and Had Maurizio Gucci Killed’ 28 November 2021 <link>. Also, streaming on Prime Video as ‘House of Gucci’.
[2] Transfer of Property Act, 1882, Section 122
[3] Transfer of Property Act, 1882, Section 123
[4] Transfer of Property Act, 1882, Section 126
[5] Sonya Chikhalikar and Another v. Anita Fernandes and Another 2014 SCC OnLine Bom 1782
[6] The Registration Act, 1908 Section 17(1)
[7] The Indian Contract Act, 1872, Section 25(1)
[8] Madala Jyothi and Ors. v. Karanam Tirupalaiah and Ors. 2015 SCC OnLine Hyd 260
[9] Bollarapu Bhaskara Rao v. State of Andhra Pradesh and Ors. 2023 SCC OnLine AP 1621
[10] E.A. Pavithran and Ors. v. Erayi Arakkalath Neetha and Ors. 2023 SCC OnLine Ker 9253
[11] Kasani Subba Rao and Ors. V. Puli Radhakrishna Murthy 2024 SCC OnLine AP 338
[12] S. Vanitha v. The Deputy Commissisoner, Bengaluru Urban District and Ors. 2022 SCC OnLine SC 1023
[13] Pinnama Raju Ranga Raju v. The State of Andhra Pradesh and Ors. MANU/AP/0202/2020
[14] Sumit Kumar v. Naresh Kumar and Ors. 2016 SCC OnLine Utt 538
[15] The Registration Act, 1908, Section 49
[16] Supra 14
[17] Prem Prakash Gupta v. Sanjay Aggarwal 2018 SCC OnLine Del 6730