Gift Deeds by Senior Citizens in India

A gift deed is a legal document used for the transfer of ownership of a property from one person to another as a gift, without any consideration or compensation involved. Transfer of property by way of gifts are ordinarily irrevocable in nature once their execution is completed, unless the same is hit by vitiating factors such as fraud, coercion, misrepresentation. A gift deed may further be revoked by the mutual consent of the parties.

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However, with the advent of time, it has been observed that the provisions pertaining to gift deeds executed by senior citizens and their irrevocable nature has proved to be detrimental to their interests.

Often, gift deeds are executed by senior citizens in favour of their children/caretakers with the intention of ensuring that they shall be provided with the basic amenities. However, they often face neglect at the hands of the transferee once the property is transferred upon registration of the gift deed.

Transfer of Immovable Property through Gift Deed

A transfer of property out of love and affection can be made by way of a gift deed, which is a transfer without any consideration. For a gift deed executed in relation to immovable property to remain valid, it is critical that the same must be registered along with two attesting witnesses.

NOTE: Registration of a gift deed is not required in case of movable property.

Irrevocable Nature

Transfer of property by way of gifts are ordinarily irrevocable as per Indian laws, and once the execution thereof is complete, the same cannot be cancelled or rescinded.

The Donor cannot unilaterally rescind such transfer of property once the same has been accepted by the Donee. However, if both the parties mutually decide that the gift shall be suspended or revoked upon the happening of an event, it shall be a valid revocation by mutual consent.

Furthermore, the applicable law on voidable contracts, is equally applicable to gift deeds, therefore, if any gift deed has been obtained by any of the vitiating factors such as fraud, coercion, misrepresentation then the same shall be voidable at the instance of the Donor.

Transfer through Will vs. Gift Deed

While the transfer of property through a Will is only effective upon the death of the testator, gift deeds become effective upon execution and registration thereof.

Furthermore, transfer of property through a Will is a lengthy process since the process of probate has to be initiated through courts, whereafter the property is finally transferred if there are no disputes.

However, a gift deed once executed and registered is difficult to challenge unless there exist any vitiating factors under law such as coercion, fraud, etc. The possibility of objections being raised during the process of executing a Will is often high and leads to disputes among the heirs.

Gift Deed Overriding Over Will

If a gift deed is properly executed and registered then the same shall override the stipulations contained qua the said property in a Will, since it ceases to be a part of the Testator’s estate and therefore cannot be distributed or disposed through the Will.

Furthermore, while a Will need not be registered and the possibility of having multiple Wills cannot be ruled out, transfer of property through a gift deed is a more conclusive and definitive mode of transfer with limited grounds of challenge to the same.

Maintenance and Welfare of Parents and Senior Citizens Act, 2007

Many senior citizens have opted for the transfer of property through a gift deed, as opposed to a Will since it is less cumbersome and is effective during their lifetime itself.

However, the essence and purpose behind making transfers to loved ones by senior citizens has proved to be a challenge in the present times. On one hand, transfers made through Wills go through a tedious legal process and remain ambiguous, while on the other hand, gift deeds, given their irrevocable nature, can often put the Donor through insecurity – whether they will be provided with maintenance once the transfer of property is done.

To bridge the gap between misuse of gift deeds by transferees, Maintenance and Welfare of Parents and Senior Citizens Act, 2007 provides for the nullification and revocation of such gift deeds at the behest of Senior Citizens that were subject to the condition of providing basic necessities and maintenance.

Who Can Seek Revocation?

Any senior citizen, i.e., above the age of 60, who has transferred their property by way of gift, can seek to have the same declared as void, if such transfer was subject to the condition that the transferee shall provide basic amenities and meet the basic physical needs of the Donor, but fails to do so.

However, only those individuals can obtain benefit of this provisions who have executed such gift deeds after 2007, i.e., after the coming into force of the Maintenance and Welfare of Parents and Senior Citizens Act, 2007.

The Act proves to be a great relief to senior citizens who have been facing ill-treatment by family members/children who refuse to provide maintenance and basic amenities to the senior citizens after having obtained a gift deed in their favour.

Stipulation on Maintenance Mandatory

Recently, the Supreme Court of India has settled the issue whether the condition for providing basic amenities must necessarily be stipulated in the gift deed itself and has held that as per the scheme, only those transfers can be held to be void which were made in consideration of providing basic amenities and meeting basic physical needs to the person concerned, and therefore the existence of such clause for maintenance in the gift deed is crucial.

It is critical that the gift deed executed by senior citizens is drafted in a careful manner, since it can only be declared void if it expressly contains a stipulation that the transferee must maintain, otherwise it shall remain to be valid.

How to Seek Revocation?

A person may approach the special forum constituted for the purposes, i.e., Maintenance Tribunal and file an application for revocation of the gift deed. Each state has separate rules under which an aggrieved person may approach the authority.

Conclusion

Gift Deeds by senior citizens in India pose numerous legal challenges, with a need to ensure senior citizens’ welfare and protection due to its irrevocable nature. As they offer an immediate transfer option as against Wills, a risk of negligence and misuse remains. Understanding the nature of Gift Deeds is essential to navigate any challenges associated with it.


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