Gifts and li­a­bil­ity

Hindustan Times (Chandigarh) - Estates - - FRONT PAGE - Su­nil Tyagi ht­es­tates@hin­dus­tan­times.com

Agift of an im­move­able prop­erty is gen­er­ally con­sid­ered to be a vol­un­tary trans­fer of prop­erty with­out any kind of con­sid­er­a­tion. When­ever a per­son is gifted an im­move­able prop­erty, it is pre­sumed that he has re­ceived some­thing that is valu­able and ben­e­fi­cial for him. How­ever, such a gift can some­times come with an obli­ga­tion to fu­fill cer­tain con­di­tions. This is re­ferred to as an oner­ous gift.

Oner­ous gifts are ac­com­pa­nied by cer­tain charges that are im­posed by the donor (giver of the gift) on the donee (re­cip­i­ent of the gift). It is based on the prin­ci­ple that ‘he who ac­cepts the ben­e­fit of a trans­ac­tion must also ac­cept the bur­den of the same’.

Here’s how one can il­lus­trate the same with an ex­am­ple. ‘A’ gifts his house to his son ’B’ but the prop­erty is mort­gaged and B, if he is ready to pay for it, can ac­cept the gift. He also has the op­tion to re­ject the of­fer.

Once an oner­ous gift has been ac­cepted, sub­ject to the con­di­tions im­posed, it can­not be dis­claimed. The po­si­tion in law is that it is open to the re­ceiver/ben­e­fi­ciary/donee to whom an oner­ous gift is given ei­ther to ac­cept it in to­tal­ity or to re­ject it al­to­gether.

If a per­son ac­cepts such a gift, he can­not refuse to carry out the obli­ga­tion sub­ject to which it is given or has been re­ceived.

Courts have on var­i­ous oc­ca­sions stated that such bur­den of obli­ga­tion is at­tached to the own­er­ship of the gifted prop­erty and the donee is bound to dis­charge the obli­ga­tion he has ac­cepted with the gifted prop­erty.

Also, such a gift can be dis­claimed by the donee if a dis­claimer to the ef­fect is ac­cepted by the donor.

If a donee re­fuses to carry out the obli­ga­tion so at­tached to the gifted prop­erty and the donor wants to re­voke the gift so made by him, he can do so only if the gift is ex­e­cuted with a con­di­tion and there is an ex­press men­tion of the power to re­voke the gift so made by the donor in case of non-com­pli­ance of such con­di­tion/obli­ga­tion.

There may be a case where sev­eral prop­er­ties (with an obli­ga­tion to pay a loan) are gifted to a per­son through a sin­gle gift deed and only one is bur­dened with an obli­ga­tion.

In such a case, if the donee de­cides to ac­cept the gift, he has to ac­cept the gift as a whole (in­clud­ing the one with the obli­ga­tion at­tached) or not ac­cept it at all.

A per­son may also be gifted prop­er­ties through var­i­ous in­de­pen­dent gift deeds. In such a case, it is com­pletely on the dis­cre­tion of the donee to ac­cept only those gifts which, he thinks, are go­ing to be ben­e­fi­cial for him. He can choose to re­ject the gifts which come with bur­den­some obli­ga­tions at­tached to them.

Thus, the ba­sic prin­ci­ple un­der­ly­ing the oner­ous gift of a prop­erty is to gift both ben­e­fit and li­a­bil­ity at­tached to the gift be­ing made to an in­di­vid­ual/ re­ceiver of such gift.

It is to­tally up to the donee to ac­cept or re­ject such gifts in to­tal­ity.

How­ever, once an oner­ous gift has been ac­cepted, it can- not be dis­claimed by donee (un­less dis­claimer is ac­cepted by the donor) and the donee is then bound to ful­fill the obli­ga­tion im­posed on him by ac­cept­ing such a gift. The au­thor is a se­nior part­ner at Zeus Law, a cor­po­rate com­mer­cial law firm. One of its ar­eas of spe­cial­i­sa­tions is real es­tate trans­ac­tional and lit­i­ga­tion work. If you have any queries, email us at ht@zeus. firm.in and ht­es­tates@hin­dus­tan­times.com

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