Is Delivery of Possession Necessary in All Cases to Validate a Gift?

Question: Is Delivery of Possession Necessary in All Cases to Validate a Gift? [BJS 1975]

Find the answer to the mains question of Property Law only on Legal Bites. [Is Delivery of Possession Necessary in All Cases to Validate a Gift?]

Answer

A gift under Indian law is a transfer of property made voluntarily and without consideration. The law governing such transfer is primarily contained in Section 122 of the Transfer of Property Act, 1882 (TPA). A pertinent legal question that often arises is whether delivery of possession is necessary to validate a gift under this Act. This answer examines the legal position with statutory references and judicial interpretations.

Section 122 of the Transfer of Property Act defines a gift as:

"The transfer of certain existing movable or immovable property made voluntarily and without consideration by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee."

It further states that such acceptance must be made during the lifetime of the donor and while the donor is still capable of giving.

Under Section 122 read with related provisions, the following are required for a valid gift:

1. Transfer of Ownership
2. Existing Property (Movable or Immovable)
3. Voluntary Action and Free Consent
4. Absence of Consideration
5. Acceptance by Donee
6. Delivery of Possession – when applicable

Role of Delivery of Possession

Whether delivery of possession is essential depends upon:

A. Type of Property

Movable Property:

Delivery of possession is generally required unless the property is already in the possession of the donee or is symbolically delivered.

Immovable Property:

Delivery of possession is not mandatory. Instead, execution and registration of a registered instrument under Section 123 of the TPA is essential for its legal validity.

Section 123 of the Transfer of Property Act deals with the mode of making a gift:

• For immovable property, a registered instrument signed by the donor and attested by at least two witnesses is compulsory.
• For movable property, gift may be made either by a registered document or by delivery of possession.

Thus:

Delivery is optional for immovable property.

Delivery is mandatory for movable property if no registered document is executed.

Judicial Interpretation

1. K. Balakrishnan v. K. Kamalam & Ors., (2004) 1 SCC 581

The Supreme Court held that registration of the gift deed is mandatory for immovable property, and mere delivery of possession without registration does not create valid title.

2. Renikuntla Rajamma v. K. Sarwanamma, (2014) 9 SCC 445

The Court clarified that physical possession is not mandatory in case of a validly registered gift deed. Once all formalities of execution and registration are completed, title is transferred, even if the donor continues to occupy the property.

3. Naramadaben Maganlal Thakker v. Pranjivandas Maganlal Thakker, (1997) 2 SCC 255

It was held that in the case of movable property, delivery of possession is sufficient to validate a gift even without a written document.

Conclusion

Delivery of possession is not necessary in all cases to validate a gift under the Transfer of Property Act. The necessity of delivery depends on:

• The type of property (movable or immovable)
• The mode of transfer adopted (document or delivery)
• The compliance with statutory formalities, especially registration in the case of immovable properties.