Can Gift Deeds Be Challenged In Court Of Law?

9 May 2023

8,614 5 mins read

Can a Gift Dead be Challenged? If you want more information about it, give it a read!

According to the Registration Act, 1908 and the Transfer of Property Act, documenting a gift agreement with the sub-registrar is obligatory. Transfers are void if this is not done.

Table of Contents

Transfer by a Gift Certificate

Giving away one’s property or money, whether mobile or immovable, to another without expecting anything in return is known as a gift. The gift of a possessor should be documented to transfer ownership from the giver to the recipient. The gift deed must be registered with a sub-registrar, as required by the Indian Registration.

The donor and the recipient of the gift deed are referred to as the transfer or donee. Some requirements must be met for a gift to be considered genuine.

The following criteria must be met for a legitimate gift:

Ownership is transferred;
Ownership must be tied to a specific piece of real estate;
The transmission must be unrestricted and not influenced in any way.
An unforced error wouldn’t have been acceptable;
Donors should be capable individuals.
The recipient of the gift must accept it.

Gifts are transfers of property made without expecting any benefit in return from the recipient, referred to as the “transferee or donee.” In minor, the recipient might accept the present. Gratuitous transfers are those in which the recipient is not compensated. Section 5 defines a gift as a “gift Mortis causa” if given while the donor is still alive.

Is It Legal to Give Minors Gifts?

Even though a juvenile is deemed unable to provide consent or accept gifts, a gift can be given to a donee or transferee under the age of majority. Until the minor turns 18, the guardian is responsible for managing the property; at that point, the donee has the option of accepting the gift or returning it to the giver.

Flexible Assets

Gifts can include anything that can be moved, including cars, cash, jewellery, and other adornments. Immovable property must be Gift registered; however, movable property need not be Gift registered. A recorded deed or the simple transfer of the item by the donor’s wishes can be used to make a gift of movable property.

Gift Taxes

Individuals and undivided Hindu families are exempt from paying taxes on gifts received from blood relations, like inheritances, during the marriage, or in anticipation of death, according to Section 56 (2) (vii) of the Income Tax Act, 1961. Gifts exceeding Rs 50,000 in any other context will be taxed as income from other sources, but not in this situation.

Can Gift Deeds Be Challenged in a Court of Law?

Filling out a declaration of gift deed lawsuit is a surefire way to bring the gift deed into the dispute in court. However, if you want to know can a Gift Deed be challenged in India, you will only be able to contest it if you can show that the action was performed against the donor’s wishes or under false pretenses, such as fraud or deception. The following are some possible grounds for contesting a gift deed:

If the gift transfer consent was not given freely,
It is possible that the donation deed was not properly executed and registered by applicable law.
Incompetent to contract, either party can refuse to accept the gift.
If the recipient fails to meet the conditions of the gift, the gift will be forfeited. Such a gift deed may be cancelled.
A gift deed would be invalid if it included any compensation for the gift.

What Is a Declaration Suit?

A “Declaration” is a court’s official declaration of a person’s property rights or legal status.

An individual may bring a lawsuit against anyone who claims they are not entitled to a legal character or a property right, and the tribunal may declare at its discretion that they are. The claimant need not ask for any additional remedy.

If the right is property-related, the suit seeks to proclaim the plaintiff’s title/ownership and reclaim possession to protect the plaintiff’s interests.

What Is the Process of Withdrawal of a Gift Deed?

Under Section 126 of the Transfer of Property, a gift can be withdrawn if certain circumstances are met. Revocation of a facility requires the following elements to be present:

The giver and recipient must agree that the facility will be suspended or cancelled if a specific occurrence occurs;
Such an incident must be independent of the donor’s wishes;
The donee must consent to the suspension or revocation of the gift before accepting it. And,
A basis other than lack of consideration or failure to perform must exist for the cancellation of a contract.
If the condition is illegal or morally repulsive to the property created under the donation, it should not be a part of the agreement.
Section 126 is controlled by sec. As such, a stipulation in the gift document barring transfer is void in the provisions stated in art.
To cancel a non-fraudulent or non-unreasonable gift does not require the recipient’s consent. One such gift deed can be annulled only by turning to legal recourse in a competent court of law.

Bases

If consent was not free: There are various circumstances when the individual making the gift is affected by other persons, either personally or by threat; therefore, the consent and document’s worth is lost.
If the gift deed is not performed correctly and recorded as required by law, it has no legal significance. A gift deed is legitimate even if it is not correctly registered. An unreported gift deed cannot be used to collect the benefits of a gift deed.
Even though a present from a minor to a minor is legal, a gift from a little is not. Another reason the donor is not regarded as competent is if they are of an incompetent mind or unable to comprehend what they are doing.
Transferring property by way of a gift deed necessitates the payment of consideration. The gift deed is null and void if someone shows it was given without consideration.
If the recipient’s present does not meet the gift requirement, then: Despite consideration being misunderstood, it is not the same as completing a requirement. Donating property is not an act of reversal of favour; instead, the giver may perceive it as a form of security in making the gift.

Conclusion

Individuals have been making gifts for a long time, and there were no similar arguments back then. However, with the shift in mindset and culture, many people now view the gifting of assets as a safe and effective means of preventing future disagreements. For individuals who stand to lose if a gift deed becomes law, there are avenues for redress that allow them to dispute a mistaken gift deed.

Vakilsearch is an excellent place to start. People and corporations can now easily acquire the legal services they require by clicking on a link. They can handle all the paperwork and legalities.

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