Drafting Pleading and Conveyancing CHANAKYA CHAN AKYA NATIONAL NATIONAL LAW L AW UNIVE!I UNIV E!ITY" TY" PATNA PATNA
Pro Project ject on:on:Gift Deed Submitted To: To: Dr. B.R.N. Sharma (D.P.C.)
Submitted By: Suirti Shiha Ro!! No. : "#$ Seme%ter : &''' th *ear
ACKNOWLEDGEMENT
The +re%ent +roject on the “#ift Deed” ha% been ab!e to ,et it% fina! %ha+e ith the %u++ort and he!+ of +eo+!e from ariou% /uarter%. 0y %incere than% ,o to a!! the member% ithout hom the %tudy cou!d not hae come to it% +re%ent %tate. ' am +roud to acno!ed,e ,ratitude to the indiidua!% durin, my %tudy and ithout hom the %tudy may not be com+!eted. ' hae taen thi% o++ortunity to than tho%e ho ,enuine!y he!+ed me. 1ith immen%e +!ea%ure ' e2+re%% my dee+e%t %en%e of ,ratitude to Dr. B.R.N. Sharma (3acu!ty for D.P.C. Chanaya Nationa! 4a 5nier%ity for he!+in, me in my +roject. ' am a!%o thanfu! to the ho!e Chanaya Nationa! 4a 5nier%ity fami!y that +roided me a!! the materia! ' re/uired for the +roject. Not to for,et thanin, to my +arent% ithout the coo+eration of hich com+!etion of thi% +roject ou!d not had been +o%%ib!e. ' hae made eery effort to acno!ed,e credit% but ' a+o!o,ie% in adance for any omi%%ion that may hae inadertent!y taen +!ace. 4a%t but not !ea%t ' ou!d !ie to than 6!mi,hty ho%e b!e%%in, he!+ed me to com+!ete the +roject.
Contents
Introduction Meaning of gift and gift deed Essential characteristics of gift General principle for drafting git deed Conclusion Model draft
Introduction
$#ift% defined
78Gift9 i% the tran%fer of certain e2i%tin, moab!e or immoab!e +ro+erty made o!untari!y and ithout con%ideration by one +er%on ca!!ed the donor to another ca!!ed the donee and acce+ted by or on beha!f of the donee. Acce&tance '(en to )e *ade+, Such acce+tance mu%t be made durin, the !ifetime of the donor and hi!e he i% %ti!! ca+ab!e of ,iin,.
'f the donee die% before acce+tance the ,ift i% oid. Section ## of the TP 6ct +o%tu!ate% that a ,ift i% a tran%fer of certain e2i%tin, moab!e or immoab!e +ro+erty made o!untary and ithout con%ideration by one +er%on ca!!ed the donor to another ca!!ed a donee and acce+ted by or on beha!f of the donee. The e--ential ele*ent- of a ,ift are7 •
(a) the ab%ence of con%ideration;
•
(b) the donor;
•
(c) the donee;
•
(d) to be o!untary;
•
(e) the %ubject-matter;
•
(f) the tran%fer; and
•
(,) the acce+tance.
The conce+t of ,ift i% diametrica!!y o++o%ed to any +re%ence of con%ideration or com+en%ation. There may be certain tran%action% of tran%fer hich may not amount to a ,ift ithin the meanin, of % ## but ou!d be re,arded a% ,ift% for the +ur+o%e of %ubjectin, %uch transfers to the levy of tax under the Gift Tax Act 1958 because of the definition of gift contained in s 2(xii) read with s of the Gift Tax Act! 2 "e#uest under a will is not a transfer! $ Therefore% a will cannot be a gift since gift% by its definition under this section% is a transfer of &ro&e rty! The incidents of a gift between two 'ohaedans are governed by the 'ahoedan aw% and not by the T* Act! The s&ecial features of that law are untouched by the &rovisions of this cha&ter! +nder 'ahoedan aw% a gift re#uires declaration, acce&tance and, delivery of such &ossession of the sub-ect of the gift by the donor to the donee as the sub-ect of the gift is susce&tible of!
1 K Balaksirhnan v K Kamalam A./ 200 1253% &ara 18% (200) 1 581! 2 Commr of Income Tax v Sirchmal Nawalakha (2001) 4 41!
$ N Ramaiah v Nagaraj A./ 2001 ant $95!
1ritin, i% not e%%entia!. 'f eidenced in ritin, %uch ritin, doe% not re/uire re,i%tration or atte%tation. 6 deed of ,ift +ro+erty coneyed tran%ferred and e2chan,ed a% a con%e/uence of a fami!y arran,ement i% a deed of ,ift een thou,h the donee a,ree% to re-coney the +ro+erty for a %+ecified %um if ca!!ed u+on by the donor to do %o ithin ten year%. Pasupu Kumkuma mean% a ,ift a %ett!ement or a%%i,nment of !and to a dau,hter. The 6ndhra Prade%h
overr.ling Bhubaneswara Nayak Santoshra he!d that Pasupu Kumkuma create% a ri,ht in immoab!e +ro+erty in one and the ri,ht of the oner thereof %ha!! be e2tin,ui%hed and hence i% a ?,ift@ re/uirin, re,i%tration. 't further ob%ered that the dau,hter% %ae and e2ce+t under a cu%tomary or %tatutory ri,ht cannot hae any %hare in a joint faim!y +ro+erty. 6 deed of re!in/ui%hment i% in the nature of a deed of ,ift. 6 deed of re!in/ui%hment or a deed of ,ift differ% from a deed of +artition in hich it i% not +o%%ib!e to ho!d that the +artition i% a!id in re%+ect of %ome +ro+ertie% and not in re%+ect of other% becau%e ri,ht of +er%on% bein, +artitioned are adju%ted ith reference to the +ro+ertie% %ubject to +artition a% a ho!e.A Re!in/ui%hment of %hare by a tenant-in-common in faour of another amount% to a ,ift. Dan !itera!!y mean% a ,ift and for a!! materia! +ur+o%e% i% ,oerned by the TP 6ct. "
Deba Prsad Bas v !shrkana Das (1933) 81 al 67 9! 5! A./ 1948 A* 291% &ara 5! 4! A./ 2002 A* 35% & 34, overruled Bhabaheswar Nail San"oshrai v The S#ecial Tahsildar$ %and Reforms$ Tekkali A./ 1980 A* 1$9! 3! A./ 1943 01% & 05!
8! Debi Sharan v Nanlal Chabe& A./ 1929 *at 591!
E--ential of gift
Vol.ntarily and Wit(o.t Con-ideration
The e%%ence of a ,ift i% that it i% a ,ratuitou% tran%fer. B!ac%tone %ay%: ?Gift% are a!ay% ,ratuitou% ,rant% are u+on %ome con%ideration or e/uia!ent@. The ord ?o!untari!y@ in the %ection i% u%ed in it% +o+u!ar %en%e denotin, the e2erci%e of unfettered i!! and not in it% technica! %en%e of ?ithout con%ideration@. The +rinci+!e% !aid don in the 'ndian Contract 6ct "A# re!atin, to free con%ent ou!d a++!y in determinin, hether a ,ift i% o!untary. Thi% fo!!o% from % of the TP 6ct. 5ndue inf!uence in the ca%e of ,ift% i% the %ame a% that in ca%e of contract% ie % >() 'ndian Contract 6ct "A#. 0ore than mere ?inf!uence@ mu%t be +roed to render the inf!uence ?undue@. 't i% not %ufficient to +roe mere!y a re!ation%hi+ herein one +er%on i% in a +o%ition to dominate the i!! of the other. 't mu%t a!%o be +roed that the tran%action a% uncon%cionab!e. n beha!f of the donor the e%%entia! in,redient i% that he %hou!d o!untari!y and ithout con%ideration tran%fer the +ro+erty to the donee and the ,iin, aay im+!ie% a com+!ete die%tin, of the oner%hi+ in the +ro+erty by the donor. The ord ?con%ideration@ i% u%ed in the %ame %en%e a% in the 'ndian Contract 6ct "A# and e2c!ude% natura! !oe and affection. 6 tran%fer in con%ideration of an e2+ectation of %+iritua! and mora! benefit or in con%ideration of natura! !oe and affection i% a ,ift for %uch con%ideration i% not that contem+!ated by the %ection. # 'n a 6!!ahabad ca%e a ,ift deed of +ro+erty a% e2ecuted by the mother in faour of her on!y dau,hter and the dau,hter +romi%ed to !oo after and maintain the mother throu,hout her !ife. 't a% he!d that the +romi%e a% not enforceab!e in !a a% %uch. The ,ift a% he!d to hae been made on account of natura! !oe and affection and not in con%ideration of the a%%urance or +romi%e made by the dau,hter.$ $.
9! 2 "l o 0!
. Afsar Shaikh v Soleman Bibi 6'R A> SC >$ EA>F # SCR $#A (A>) # SCC # EA>F # SC $A. . Deo Saran v Deoki Bhar"hi (192) ./ $ *at 82% 80 . 980% A./ 192 *at 453! 12 Debi Saran v Nandlal 125 . 123, ee Tlsidas Kilachand v CIT A./ 1941 102
%$ 1$ 'nni Devi v Chho"i A./ 198$ All % && 3% 8% &ara 3!
6 ,ift in con%ideration of +a%t or ith the object of future cohabitation i% immora! and ina!id under % >(h) of the TP 6ct. 6 tran%fer for %erice% rendered may be a ,ift if the %erice% are the motie and not the con%ideration for the tran%fer. 6 deed of ,ift by hich +ro+erty i% coneyed tran%ferred and e2chan,ed a% a con%e/uence of a fami!y arran,ement i% a deed of ,ift een thou,h the donee a,ree% to re-coney the +ro+erty for a %+ecified %um if ca!!ed u+on by the donor to do %o ithin year%. 6ccordin, to the 6!!ahabad
The %ubject matter of the ,ift mu%t be certain e2i%tin, moab!e or immoab!e +ro+erty. 't may be !and ,ood% or actionab!e c!aim%. 't mu%t be tran%ferab!e under % >. 6 ,ift of a ri,ht of mana,ement i% a!id; but a ,ift of a future reenue of a i!!a,e i% ina!id. The%e ca%e% ere decided under
1 lasekara Permal v Pa"hak""& A./ 1941 'ad 05, Sonia Bha"ia v S"a"e of (""ar Pradesh (1981) 2 585% && 593% 598!
=. Maharaj Dhiraj Himatsinhji & ors v State of Rajasthan & anor 6'R "A SC "# + "=. > 'adhavrao v Kashibai (1910) ./ $ "o 283% 5 . 599, Deo Narain v Board of Revene (194) ./ 1 All $35% (194$) All 1088% A./ 194 All 19!
A 'ahim Chandra v Ram Da&al (1925) 2 al 582% 91 . 353% A./ 1924 al 130!
't i% %ubmitted that in a deed of ,ift the meanin, of the ord ?money@ %hou!d not be re%tricted by any hard and fa%t ru!e but %hou!d be inter+reted hain, re,ard to the conte2t +ro+er!y con%trued in the !i,ht of a!! the re!eant fact%. 'n order to con%titute a a!id ,ift there mu%t be an e2i%tin, +ro+erty. 1here the donor (a%%e%%ee) ha% a credit account ith a firm or ith a fami!y or ith a com+any and the %um ,ifted i% aai!ab!e to that firm or the com+any on the date of the ,ift then a a!id ,ift of that %um by boo entrie% mi,ht be +o%%ib!e; but here a %um a% not aai!ab!e ith the firm or the fami!y or a com+any hich a% not a banin, com+any and had no oerdraft faci!ity %uch entrie% ou!d not effectuate a a!id ,ift. The a%%e%%ee ho maintained an account in a com+any made a ,ift of a certain %um by directin, the com+any to debit hi% account ith that %um and to credit the amount in the name of the donee.
'n order to con%titute a a!id ,ift the +iota! re/uirement i% acce+tance thereof. No +articu!ar mode of acce+tance i% re/uired and the circum%tance% thro !i,ht on that a%+ect. 6 tran%action of ,ift in order to be com+!ete mu%t be acce+ted by the donee durin, the !ifetime of the donor. 3actum of acce+tance can be e%tab!i%hed by different circum%tance% %uch a% donee tain, a +ro+erty or bein, in +o%%e%%ion of deed of ,ift a!one. 'f a document of ,ift after it% e2ecution or re,i%tration in faour of donee i% handed oer to him by the donor hich he acce+t% it amount% to a a!id acce+tance of ,ift in !a. The %+ecific recita! in the deed that +o%%e%%ion i% ,ien rai%e% a +re%um+tion of acce+tance. "
" Palla&&a v Ramavadhanl (190$) 1$ 'ad $4 !
19 'a"hra Ker v Dharan Samaj (1914) 1 All 10$8% $8 . 18$!
DEED A deed is any legal instrument in writing which passes, arms or conrms an interest, right, or property and that is signed, attested, delivered, and in some jurisdictions sealed It is commonly associated with transferring title to property !he deed has a greater presumption of validity and is less re"utta"le than an instrument signed "y the party to the deed A deed can "e unilateral or "ilateral #eeds include conveyances, commissions, licenses, patents, diplomas, and conditionally powers of attorney if e$ecuted as deeds
A ift !eed is a legal document that describes voluntary transfer of gift from donor "owner of property# to donee "receiver of gift# without any exchange of money. $he donor must be solvent and should not use this tool for tax evasion and illegal gains. Steps in gifting process Gifting process can be subdivided into three parts as described below: 1. Drafting the Gift Deed % A gift deed is drafted with the help of a lawyer and it describes what is being transferred and to whom. ift !eed is a contract between donor and the donee which defines simultaneous and reciprocal act of giving and ta&ing. A gift to be valid must be made by a person voluntarily and not under compulsion without any exchange of money. 2. Acceptance % Acceptance of the gift after its execution is a legal requirement and !onee must accept the gift during the lifetime of donor. In case donee fails to accept the gift' it is rendered invalid. $he acceptance may be validated by acts such as ta&ing possession of the property. 3. Registration % As per (ection 123 of the $ransfer of )roperty Act' a gift of immovable property cannot pass any title to the donee unless it is registered. Attestation by two witnesses is required during registration and post registration' title transfer is possible. How to register a Gif Deed?
*egistration of gift deed is done as per the provisions of the *egistration Act' 1+,-. ommon steps involved in registration process are/ 1.
0aluation
of
property
being
gifted
by
an
approved
valuation
expert.
2. )ayment of (tamp duty and transfer duty % (tamp duty varies for women and men "(lightly lower for women#. (tamp duty also varies from state to state and for latest rates one should visit official state government website.2,
2,. http/wap.businessstandard.comarticlepfprimerallyouwantedto&nowaboutthegiftdeedact 114,312,,1,41.html
In case of Minor
egally spea&ing person who owns the property can ma&e a gift to any other person. An exception to this rule is the case in which either of donor or donee is a minor. 5inors are not eligible to contract6 therefore they cannot transfer property as a gift. A gift deed in case of donor being a minor is legally not valid. In case of donee being a minor' a natural guardian can accept a gift on his behalf. uardian acts as a manager of the gifted property' and if the gift is onerous' the obligation cannot be enforced on donee until heshe is a minor. 7nce the donee is an adult' he must either accept the burden or return the gift.
DA1TIN#
#rafting relates to ma%ing a draft of something #rafting a document would imply ma%ing a rough copy of a document #rafting re&uires %nowledge of law and re&uired a"ility to eal with a"stract concepts and presence of mind !he company has to enter into various types of agreements with di'erent parties and have to e$ecute various types of documents in favour of its clients, "an%s, nancial institutions, employees and other constituents #rafting may "e dened as the synthesis of law and fact in a language form (erfection cannot "e achieved in drafting unless the ne$us "etween law, facts and language is fully understood !he essence of legal drafting is the law and the facts of document !he process of drafting operates in two planes) the conceptual and the ver"al *esides see%ing the right words, the draftsman see%s the right concepts #rafting, therefore, is rst thin%ing and second composing #rafting, in legal sense, means an act of preparing the legal documents li%e agreements, contracts, deeds etc
GENERAL PRINCIPLESOTHER WRITINGS
DRAFTING OF DEEDS, CONVEYANCING AND
+ey points - .e must read the introductory note or the literature on the su"ject of the instrument / 0ote down the important re&uirements of law which fullled complete instrument on the su"ject while drafting 1 !he facts which should "e disclosed in the document cannot "e suppressed 0othing is to "e omitted or admitted at random 2 A company "eing a legal entity !he document is e$ecuted a person duly authorised "y the directors "y their resolution or "y their power of attorney 3 the format of documents adopted adheres to the customs and conventions in vogue in the "usiness community or in the ordinary course of legal transactions 4or any change in the form of such document, use of juridical and technical language should invaria"ly "e followed 5 !he order of the draft should "e strictly logical 6egal language should "e, to the utmost possi"le e$tent, precise and accurate !he draft must "e readily intelligi"le to laymen All the time the draftsman must %eep his eye on the rules of legal interpretation and the caselaw on the meaning of particular words and choose his phraseology to t them /-
/- http)77wwwlegalserviceindiacom7articles7transferhtml
8 #ocument should "e supported "y the schedules, enclosures or anne$ures to the material facts 9 :se concrete words ;
Fowlr!" #$ rul! o% dr&%tin' - (refer the familiar words / (refer the concrete word avoid a"stract words 1 (refer the single word avoid synonyms words 2 (refer the short word rather than long words 3 (refer the >a$on word rather than ?oman 5 (refer active voice to the passive voice in the drafting of documents
Ot(r rul! - >%etch or outline the contents of a document "efore ta%ing up its drafting !his rule is suggested "y Mr #avidson,a cele"rated authority on conveyancing in his "oo% on Conveyancing / >%elton draft and its self@appraisal@ !he #raftsman should frame s%eleton draftB which should "e lled in or ela"orated as he proceeds with his wor% nce the draft of the document is ready, the draftsman should appraise it with reference to the availa"le facts, the law applica"le in the case, logical presentation of the facts 1 #ue care is re&uired in certain documents to ensure it is adhere with applica"le laws
CONCLU!ION
!he conception of the term gift and su"ject matter of gift has "een an age old and traditional issue which has developed into a distinct facet in property law #i'erent aspects related to gift in property act and its distinction with the Mohammedan law and its implications has "een the major su"ject matter of this article In considering the law of gifts, it is to "e remem"ered that the English word DgiftD is generic and must not "e confused with the technical term of Islamic law, hi"a !he concept of hi"a and the term Bgift as used in the transfer of property act, are di'erent As we have seen in the project that :nder Mohammedan law, to "e a valid gift, three essentials are re&uired to e$ist) aF declaration of gift "y the donor "F an acceptance of the gift, e$press or implied, "y or on "ehalf of the donee, and cF delivery of possession of the su"ject of gift !he English law as to rights in property is classied "y a division on the "asis of immovea"le and movea"le real and personalF property !he essential elements of a gift are aF !he a"sence of consideration "F the donor cF the donee dF the su"ject@matter eF the transfer and the acceptance !hus this stri%ing di'erence "etween the two laws relating to gift forms the "ase of this project in understanding its underlying implications
Pros and Cons of Gift deed over Wi Pros 1. It is executed during the life time of donor and transfer happens immediately whereas 89ill: is applicable after death. 2. ift deed needs to be registered6 only then it is effective. *egistration renders it less liable to litigation. 89ill: on the other hand is prone to litigation. 3. $ransfer using gift deeds are tax free in the hands of donor and donee. Cons
1. ift deed is irrevocable post execution but 89ill: can be changed as many times as you want. 2. $here is extra cost in the form of (tamp !uty in case of ift !eeds. (tamp duty varies from state to state.
Mode Draft No)*
!.I> #EE# 4 GI4! is made this /9 th #ay of April, /=-5 *E!ingh aged 23 years , etc hereinafter called the #onor HF of the one part A0# Ms >hi%ha +umar aged 2= years , etc hereinafter called the #oneeHF of the other part <.E?EA> the said #onor is the a"solute owner in possession of the messuages ,lands , tenements , hereditaments and premises hereinafter fully mentioned and descri"ed in the schedule hereto , situate in 4riends Colony on the Mahatama Gandhi ?oad in the city of (atna of the value of ?upees 5=,==,=== ?s >i$ty 6a%hs onlyF A0# <.E?EA> the said C# is the #onors cousin , having lived with the #onor since the age of seven years and the said #onor has great love and a'ection for the said #onee and is desirous out of such natural love and a'ection of disposing of the said messuages , tenements, lands, hereditaments and premises in the manner hereinafter appearing 0< !.I> #EE# 4 GI4! >E> that in pursuance of the said intention and in consideration of natural love and a'ection which the said #onor has for the #onee, the said #onor out of his own free will , without fraud , coercion or undue inJuence from any"ody whomsoever , and in full possession of senses does here"y give , convey grant, transfer and conrm unto the said #onee all that dou"le@storyed pucca "uilt house containing "y measurement s&uare feee of land , "e the same a little more or less , together with all outhouses , garage and all privileges , prots , advantages and all other appurtenances whatsoever to the said messuages, tenements , lands hereditaments or premises ) ! .AKE A0# ! .6# the said messuages, tenements , lands , hereditaments or premises, here"y unto and to the use of the said #onee forever and a"solutely ) A0# !.A! !.E >AI# #0EE shall and mau from time to time and at all times hereafter peacea"ly and &uietly enter upon , have hold , occupy , possess and
enjoy the property here"y gifted ,and receive and ta%e the rents , issues and prots thereof and of every part thereof , without any let or hindrance whatsoever from or "y the said #onor or "y any person or persons claiming from, under or in trust of him I0 > <.E?E4 the said #onor has hereunto set and su"scri"ed his signature and delivered in the presence of the witnesses as present the day, month and year rst a"ove@written d A* -
Mr+unalMu%herjee #onor
/
Ms>hreyshi.alder >d C# #onee >chedule of property gifted
No) +
Gi%t o% rort %or & !ci#d Puro! !.I> GI4! is made the -1 th #ay of April, /=-5, *E! the #onee is the manager duly constituted of the 6oreto Convent >chool the plot of land measuring 23== >&uare feet lying at the said school for the purpose of the same "eing used "y the school as a sports eld
A0# <. the #onor has agreed to transfer to the #onee the said plot of open land more specically descri"ed in the >chedule hereto and coloured red on the map attached made part of this deed without any consideration 0< , !.E?E4?E , !.E #EE# >E>> that in pursuance of the said agreement and in the consideration of the purpose for which the open land is needed "y the #onee , the said A* as "enecial owner does here"y transfer "y way of gift to the said C# and his successors in the oce of manager of the said school ,A66 !.A! piece of land more specically descri"ed in the >chedule hereto and coloured red on the map attached and of the value of ?upees -=,==,=== ?s !en 6a%hs nlyF) ! .6# !.E >AME :0! the said #onee or his successors@in@oce as long as the property here"y transferred shall "e used for the purpose of a sports eld for the said school or any other shool to which the
said school may "e merged or made part of A0# the #onee does here"y accept the goft su"ject to the condition that if the #0EE or his successors@in@oce cease to use the said property for the use and "enet of the said school , as provided , this gift shall "e revo%ed and the said property shall revert to the #onor I0 > <.E?E4 the said Mr ?amesh Malotra #onorF and said Mr >anjeev (andey#oneeF have hereto signed at !he -1 th day and the year rst a"ove written d Mr #onor / >d Mr >anjeev (andey
>ushmita ?amesh Ms
*hargav
+aushal Malotra Awasthi #onee
!he >chedule a"ove referred to
Dd o% Gi%t +0< A66 ME0 *L !.E>E (?E>E0!> , that I , (rachi Agarwal #onorF, do here"y freely and voluntarily transfer unto >a%sham (awar #oneeF A66 !.A! here descri"e the property F valued at ?upees 5=,==,=== ?s >i$ty 6a%hs F only ! .6# the same unto and to use of the said >a%sham (awar , his heirs, successors and assigns, a"solutely I0 > whereof I, the said #onor, have hereto atsigned this #EE# 4 GI4! the 1=th April, of April,/=-5 ingh / Karti%a (rasad >d
#onor
