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Suspension and Revocation of Gift as per Transfer of Preperty Act

Suspension and Revocation of Gift in Property Law
Suspension and Revocation of Gift in Property Law


Suspension or Revocation of Gift

A gift is characterized by the transfer of ownership without any consideration. Once a deed of gift is executed and registered, it cannot be revoked unless it can be proven that the mandatory requirements outlined in the relevant section were not adhered to.

Furthermore, a gift can be made subject to certain conditions, provided these conditions are valid according to the provisions of the governing Act.

In a scenario where both an unconditional gift deed and an agreement between the donor and the donee were executed on the same day, the condition specified in the agreement would be deemed attached to the gift, as both documents are considered part of the same transaction.

However, a gift, once made, is generally irrevocable, except in two specific cases provided by the section:

1. If the donor and the donee have mutually agreed that the gift should be suspended or revoked upon the occurrence of a specified event, not contingent upon the donor's will.

2. A gift may also be revoked in circumstances where, if it were a contract, it could be rescinded, with the exception of lack or failure of consideration.

Suspension or Revocation by Agreement

According to the stipulations outlined, a gift can indeed be suspended or revoked through mutual agreement between the donor and the donee. However, this agreement must specify that the revocation will occur upon the happening of a specified event, and crucially, this event must not be contingent upon the donor's will.

Should the occurrence of the event rely on the donor's volition, any attempt to suspend or revoke the gift would be deemed void.

 It's imperative that the agreement to suspend or revoke the gift is made at the time of the gift's creation; otherwise, the gift becomes absolute. Additionally, for such an agreement to be valid, the conditions laid out must conform to the legal requirements.

A gift deed can only be classified as conditional and revocable if it explicitly includes a condition for revocation within the deed itself.

In a specific instance where immovable property was gifted by the donor to the donee in exchange for services and maintenance, with possession granted to the donee, the gift was considered complete.

Without a clause for revocation in the gift deed, the fact that the donee ceased to provide services could not render the gift revocable or conditional.

For illustration, if A gifts B a sum of one lakh rupees while reserving the right, with B's agreement, to reclaim ten thousand rupees at his discretion from the gifted amount, the gift is valid for ninety thousand rupees but void for the remaining ten thousand rupees, which continue to be owned by A.

Revocation by Rescission

Indeed, a gift may be revoked in circumstances akin to those under which a contract could be rescinded, with the exception of want or failure of consideration.

According to Section 19 of the Indian Contract Act, 1872, a contract may be rescinded if consent to the agreement was obtained through coercion, undue influence, fraud, or misrepresentation.

Consequently, if the donor's consent to the gift was secured through coercion, fraud, undue influence, or misrepresentation, the donor holds the right to revoke the gift.

However, if the donor chooses not to exercise this right, the gift remains valid and becomes absolute. Importantly, the donor cannot transfer this revocation right to another party.

Nevertheless, following the donor's demise, their legal heirs retain the ability to pursue revocation of the gift on any of the aforementioned grounds. This revocation must occur within three years of the donor becoming aware of the grounds for revocation. Nonetheless, if the donor explicitly or implicitly affirms the gift, the right to revoke is forfeited.

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