An Overview on Transfer of Property by Gift

Right to property has been provided in The Constitution of the People’s Republic of Bangladesh, Article 42, under which people are entitled to hold, buy or sale any piece of land that belongs to them or their ancestors. Many transactions of lands are occurring in our daily life regarding both buying and selling the lands. People have to follow many laws for fulfilling this transaction of lands. Among them an important law is the Transfer of Property Act, 1882. It introduces legal methods and procedures of various types of transactions of lands like sale, gift, mortgage, lease and exchange.

Gift is one of the most popular type of transactions where no consideration need to be paid by the opposite party. Like Mohammadan law, Hindu law also introduces ‘gift’ in Hindu Family law. In this case, we need to follow three laws for the Gift; Muslim Family Law, Hindu Family Law and the Transfer of Property Act. One important fact here is these laws are not contradictory with each other.

How gift is made

For the purpose of making a gift the will of donor, who is making the gift, is necessary. According to Section 122 of the Transfer of Property Act, 1882, at first the donor makes proposal for the gift and the donee, to whom the gift is made, need to accept that proposal.  Without the acceptance the gift shall be regarded as void.

Difference between ‘Gift’ and ‘Sale’

Gift is also known as “Heba” by the Muslim law where the donor spontaneously gives his property to the done, who may be relative or may not , without taking any consideration. Section 54 of the Transfer of Property Act defines sale as a transfer of property in exchange for price paid or promised to be paid in future. The transfer of property by sale can never be made spontaneously. The core difference between sale and gift is the consideration.

If we look at Section 25 of the Contract Act, 1872, it is stated that without any consideration a contract can never be made. So what is the consideration in this type of ‘Gift’? Love and affection is the consideration in case of making a gift but in the consequence of sale money is the consideration. After getting the consideration the seller has no right upon that property but in case of a gift the donor has the power to revoke the transaction which is fully different from sale.

Difference in Registration Fee

The registration fee of Gift is much lower than the registration fee of contract of sale.  Section 78(a) of Registration Act, 1908 says that, fee for gift or heba will be one hundred taka of the value of the property where the fee for sale will be:

• Five hundred taka where the valuation of property not more than five lakh taka.
• One thousand taka where the property valuation is more than fifty lakh taka
• Two thousand taka where the valuation of property is above fifty lakh taka.

Revocation of Gift

According to Sharia law, in these cases, gifts cannot be revoked:

1. When the donee being related to the donor within the prohibited degree of consanguinity;
2. Where the donee and donor is husband and wife;
3. In case of the death of the donee or donor;
4. When things lost or transferred to anyone else by the donee;
5. Thing having increased in value or number;
6. Something being given or accepted by way of return for the gift;
7. If the gift made in the motive to secure the favor of God.

In another cases gift may be revoked on the will of the donor according to Muslim family law. But Hindu Family law didn’t discuss anything about the revocation of gift .So revocation of gift here shall be guided by the provisions of Transfer of Property Act, 1882.

Section 126 of Transfer of Property Act discusses about the revocation of gift which clearly introduces the revocation power only to the donor, in happening of these two things;

• Happening of any specified event which doesn’t depend on the will of the donor.
• In any case where a contract might be rescinded.

Problem Relating to Revocation

The problem relating to the revocation of gift can be divided in two ways- from the side of the donor and from the side of the donee. If the donor forced for making a gift then that gift can be revoked easily under the Transfer of Property Act. But if problem arises on the side of the donee, the transfer of property Act 1882 is silent in this matter.

For the purpose of not providing much money in case of registration fee, gift is a famous type of transaction in all over Bangladesh. If transfer of property done according to gift and the donor take the consideration money and after that seller or donor revoke the gift in the court how the donee can recover his money? Where consideration is prohibited and the power of revocation is only upon the hand of the donor according to the Transfer of Property Act, 1882.

For example: Mr. X agreed to buy the property of Mr. Y and Mr. Y offered Mr. X to make a gift deed so that Mr. X can save his registration fee. After a few months of the transfer by gift Mr. Y filed a suit of revocation of gift. In this case how Mr. X can recover his money where it is not mentioned in the Transfer of Property Act, 1882.

How the Donee can get remedy?

The Evidence Act, 1872, Section 91 says, no secondary evidence shall be admissible without the registered deed in the court. By this it becomes harder to get the remedy. But in Section 92 of the Contract Act, discussed about the exclusion of evidence of oral agreement with some exceptions in which oral agreements shall be admissible in the eye of law. Section 92, Proviso 1 says,

Any fact may be proved which would invalidate any document, or which would entitle any person to any decree or order relating thereto; such as fraud, intimidation, illegality, want of due execution, want of capacity in any contracting party, want or failure of consideration , or mistake in fact or law.

For this, it needs to be proved that the gift is a contract and the following problem was done without free consent by fraud or mistake of law. If the donee can prove that the contract was not made with free consent under Contract Act, 1872- he can ask for compensation under Section 19 of Specific Relief Act, 1877 and according to this provision the contract shall be voidable at the option of that party whose consent was not free. This Act also says if the party wants to rectify or cancel the deed can make an application to the court. For rectify the court shall follow Chapter III,  for rescission court shall follow Chapter IV and for cancellation the court shall follow Chapter V of the Specific Relief Act, 1877.

Conclusion

In case of ‘Gift’, Transfer of Property Act bears only the right of the donor but right of the donee is not discussed here. For this, if any wrong done by the donor, we need to search other laws for the remedy of the donee. Crimes are changing day by day which may upgrade a question that – how much effective the law of 1882 is, in this twenty first century. By using the gaps of the old laws the wrong doers are fording with others. About 3.6 million cases are pending in different courts in Bangladesh. Among which 3.2 million disputes are land related. Government should take necessary steps to upgrade the ancient laws and mainly that laws which are related with the lands.  

Writer: 

Abdur Rahman, Student, LL.B 3^rd year, Department of Land Management and Law, Jagannath University, Bangladesh.  

Endnotes:

1. Wilson, Sir Roland Knyvet, Anglo- Muhammadan Law, Revised and up to date 5^th edition by A. Yusuf Ali, London 1921, 335.
2. https://www.dhakatribune.com/bangladesh/court/2019/08/25/3-6-million-court-cases-pending#:~:text=Around%203.6%20million%20cases%20are,the%20country%20till%20June%2030.
3. Drawback of land administration system in Bangladesh and some feasible solutions, Bangladesh Law Digest, August 19.