Author : Sagar Mazumdar, a student of Rabindra Shiksha Sammillani Law College, University of Calcutta
To The Point
There are two brothers, Tarun and Adarsh. Both of them had one son each. Tarun owned an estate. He decided to transfer the right of enjoyment of the estate to his brother Adarsh in the form of gift. Even Adarsh agreed to accept the gift. So, they executed the Gift Deed. After few years, Tarun died. One day, Adarsh got to know that Tarun’s son, Rohit is planning to sell the estate. He even got to know that a person has already shown interest in purchasing the estate. Adarsh filed a suit in the Court claiming that he received the property from his brother and was now the sole owner of the property. The defendant contended that the gift deed was invalid as it only transferred the right of enjoyment. And as there was no other will or deed, he being the only son inherited the property and therefore had the right to sell it.
[Disclaimer: The characters and story used are imaginative and fictional. Any resemblance to any original person or story is coincidental and not intended.]
Legal Jargon
The issues involved in this case are:
- Whether the gift deed executed valid or not?
- If not, whether Rohit was entitled to heir the estate or not?
- Whether Rohit was entitled to sell the estate or not during the pending of the trial?
As the situation is hypothetical in nature, it requires other things to be taken into consideration like the facts and circumstances in order to achieve a proper solution to this particular situation. So, it will not be appropriate to answer the issues based on this situation. It will be better to discuss the various issues of law involved which are not only common in many property dispute cases but also to this particular case. To sum it up in a better way:
- Essentials of a Valid Gift Deed
- Inheritance of a Property Intestate under Hindu Law
- Doctrine of Lis Pendency
Proof
Essentials of a Valid Gift Deed under Transfer of Property Act
Gift has been defined under Section 122 of the Transfer of Property Act, 1872. It covers all transfer of immovable as well as movable properties between two living persons without any consideration. The transfer must be voluntary. The following are the essential conditions for a valid gift deed:
Transfer of Ownership: In order to constitute a valid gift, there must be a transfer of ownership. It must be absolute in nature, that is, all the rights and liabilities in the property must be transferred. Mere transfer of right of enjoyment does not amount to a valid gift. It is also necessary that only a person who has with himself the ownership of a property is capable of transferring the property.
Existing Property: The property is the subject matter of the transfer. This may be movable, immovable, tangible or intangible but it should be existing at the date of transfer and should be within the scope of Section 5 of the Transfer of Property Act. An existing property means a property which is under the immediate possession of the owner.
Without Consideration: Gift is also known as gratuitous transfer which means a transfer made without any consideration. The term consideration has the same meaning as in Section 2(d) of the Indian Contract Act, 1872, that is, it must be pecuniary in nature. A transfer which involves anything of pecuniary value cannot be held to be a gift, even if it is for a nominal amount. Mutual love and condition do not amount to consideration.
Voluntarily: It means the exercise of free will and consent on the part of the doner. If any transfer has taken place by fraudulent conduct, use of coercion or undue influence then it cannot be held to be a valid transfer. Taking advantage of old health, ill will or lack of education in order to get a property transferred which otherwise the person would not have done may make the transfer void.
Acceptance: No transfer can take place without an acceptance. If any property transferred was not accepted by the transferee, then the transfer won’t have any effect. Acceptance is of two types: implied and express. Implied acceptance refers when the conduct by the transferee indicates acceptance of the property. When in the gift deed there has been a provision specifically mentioning about the acceptance of the property it can be said to be an express acceptance. In case of juristic person, the gift must be accepted by a competent authority. The gift must be made during the lifetime of the donor and while he is still in a position to be competent to make such transfer. If the transferee dies before acceptance, the gift shall become void.
These are the conditions which constitutes a valid gift. Violation of any of the conditions shall make the gift void.
Inheritance of a Property Intestate under Hindu Law
Hindu Succession Act provides for provisions in this regard. When a property is left intestate meaning without a will then the transfer of the property shall take place according to the Sections 8 to 12 of the Hindu Succession Act.
Section 8 states that for devolution of the property of the deceased, relatives mentioned in Class I of the Schedule shall have precedence over the others. In case of absence of heirs from such class, then the heirs from Class II shall be preferred. In case of no heirs from Class II as well, agnates of the deceased persons must be considered. When they were absent, the cognates of the deceased are to be considered.
Section 9 deals with the order of succession among heirs. It states that all the properties are to be partitioned equally and simultaneously among the relatives mentioned in Class I of the Schedule. In case of the absence of any relative in Class I of the Schedule, the relatives of Class II of the Schedule get activated which means the relative mentioned first shall get the first priority. If there is no relative present as mentioned in the first entry of Class II, then the second entry shall get priority above all and it may continue in the numerical order way given. Male and female within same entry are subjected to equal share.
Section 11 deals with the distribution of the property left without will. It states that in order to distribute a property in class II, it shall be distributed equally in any one entry. For example, if there has to be a devolution of a property intestate, and in absence of Class I heirs, Class II heirs are preferred. Out of which the first entry that is the father is absent. Then, the second entry, which is alive, that is son’s daughter’s son, son’s daughter’s daughter, brothers and sisters, the property in that case shall be divided to all of them equally.
Section 12 deals with the computation of degrees. It states that in case of agnates and cognates, the degrees are to be calculated from the point of view of the ascent and descent including the intestate.
These are the provisions which govern the inheritance of property without a will.
Doctrine of Lis Pendency
Section 52 of the Transfer of Property Act deals with the transfer of property during pendency of a suit. The provision prohibits the transfer of a property which is pending as a subject matter of dispute in any Court of competent jurisdiction and until the Court has adjudicated on the matter. This is done to maintain the status quo of the subject matter of the dispute that is the property and not to undermine the Court of Law by disposing the property. In order to attract Section 52 of the Transfer of Property Act, the following conditions are to be fulfilled:
Pendency of Suit: When a suit is pending in any court for its final adjudication, it is then called pendency of suit. It begins from the presentation of a plaint or institution of the suit and continues till the final disposal of the matter or the execution of the decree. It also gets terminated when a decree has not been executed due to the expiration of the period of limitation. Thus, pendency of a suit is the period during which a litigation or a proceeding continue. But it has to be taken into mind that mere presentation of a plaint is not enough, it must be accepted by the Court. When a plaint is returned by the Court for its presentation in any other Court of proper jurisdiction, then a property transferred during that period does not come under the ambit of Lis pendens.
Competent Court: For filing of a suit, the Code of Civil Procedure has provided for jurisdictions of Courts where a suit regarding a particular matter is to be filed. Every Court is segregated on the basis of its jurisdictions, be it subject matter, pecuniary, territory or any other. If a suit is filed in any Court which does not have jurisdiction to try the matter, then any property transferred during that period does not come under the scope of this section.
Right to Immovable Property: Section 52 mentions that when the right to immovable property is specifically and directly in question the property in that case cannot be transferred. The expressions directly and specifically include the litigation regarding its title or interest. The substantial aspect of the property is involved. Mere mention of the property in any suit does not attract this section. For example, in a suit between two neighbors regarding playing of loudspeakers, there has been a mention of immovable properties owned by one of the neighbors, Lis pendens does not apply in this case, as there has been just a mention of the property and not a claim in the interest or title of such property.
Non-Collusive Suit: Whenever a suit is instituted with a mala fide intention or with any intention to defraud a third party, the doctrine of Lis pendens becomes inapplicable. Even if a suit was instituted with a bona fide intention, but later the parties to the suit by an agreement conspired to scam a third person, the doctrine became unapplicable.
Restriction on Transfer: There must be restriction on transfer of property during pendency of litigation. Even if there is a transfer of property by sale, lease, mortgage, exchange or gift or any other way, the transfer must be bound by the decision of the court. The term ‘otherwise dealt with’ can be said to be those transfers of interests which does not strictly fall under Section 5 of the Act. This provision shall also apply to the transfers which take place by operation of law. Though it is to be noted that the transfer made by permission of the Court is not affected by Lis pendens.
Rights Must Affect Another Party: The protection can be granted only on the occasion when it affects the right of ‘any other party’. Any other party means the party in opposition whose title or interest is in contest with the party to the suit. It does not mean the party in the same side.
Thus, the doctrine of Lis pendens, in general terms, just holds the property from vesting to the transferee for the time being. The ultimate vesting of the property depends on the verdict passed by the Court regarding the same.
Abstract
- The transfer of right of enjoyment of a property does not amount to a valid gift. The transfer must be absolute that is there must be a transfer of ownership.
- A son being a relative mentioned in Class I of the Schedule of the Hindu Succession Act has the right to inherit the property left by his father in case of absence of any will in the contrary.
- It is a settled principle of law, that no property shall be transferred when it is the subject matter of any suit which is pending in the court for its adjudication.
Case Laws
In Renikuntla Rajamma (D) By Lr vs K.Sarwanamma, the Supreme Court held that there must be an absolute transfer of property in order to constitute a valid gift deed. However, a gift deed can be conditional.
In Shivjee Rai v. Joint Director of Consolidation, the Court opined that the Civil Court has the only power to determine whether a particular gift is valid or not.
In Smt. Munni Devi v Smt. Chhoti and Others, it was held by the Court that mutual love and affection were not consideration of pecuniary nature.
In Satya v. Urmila, the Court held that there are no preferences when male and female are found within the same entry.
In Amar Singh v Assistant Director of Consolidation, the Supreme Court held that after the death of the husband, the widow’s right in the property of her deceased husband is absolute in nature.
In Rameshwar Babasaheb Paul vs Shivaji Emnathrao Paul & Others, it was held by the Court that when all the conditions under Section 52 is satisfied, the transferee is bound by the decision of the Court. If the decision is in favour of the transferor, the transferee gets the right in that property and vice versa.
In Olga D’Souza and Others v Nitin Developers Pvt. Ltd. and Others, the Court held that the doctrine of Lis pendens not only applies to transfer of property but also to any development work.
In Jogendra Nath Gossain and Another v. Debendra Nath Gossain, the Court held that Section 52 can apply in a suit for partition.
Conclusion
These points of law arise in many of the property dispute cases in India. The purpose of this article is to spread awareness regarding the legal principles involved and court’s perspective on the same through some of its decided cases. This will help in navigating the various legal and familial issues pertaining to the concept of valid gift, inheritance of property intestate and doctrine of Lis pendens.
FAQs
- What is a valid gift?
Ans. A gift is said to be valid if it satisfies all the conditions mentioned in Section 122 of the Transfer of Property Act.
- Who is preferred first in Class 1 of the Schedule under Hindu Succession Act?
Ans. There is no preferential order in Class I of the Schedule under Hindu Succession Act. Every relative of the deceased mentioned is entitled to equal shares.
- Why is Lis Pendens important?
Ans. Lis Pendens is important in order to prevent collusive and mala fide disposal of property.
Reference:
- Transfer of Property Act, 1882
- Hindu Succession Act, 1956
- Dr. R.K. Sinha, The Transfer of Property Act, 21st Edition, Central Law Agency
- Hindu Law, 2020, Kamal Law House
- Renikuntla Rajamma (D) By Lr vs K. Sarwanamma, AIR 2014 SC 2906.
- Shivjee Rai v. Joint Director Consolidation, Civil Writ Petition 11362 of 1993
- Smt. Munni Devi v Smt. Chhoti and Others, Second Appeal No. 1870 of 1974
- Satya Charan Dutta vs Urmilla Sundari Dassi & Others, AIR 1970 SUPREME COURT 1714
- Amar Singh v Assistant Director of Consolidation & Others, AIR 1988 SUPREME COURT 2020
- Rameshwar Babasaheb Paul vs Shivaji Emnathrao Paul & Others, AIR 2019 BOMBAY 77
- Olga D’Souza and others v Nitin Developers Pvt. Ltd. and Others, Appeal from Order No. 8 of 2020
- Jogendra Nath Gossain and Another v. Debendra Nath Gossain, (1898) 26 Cal. 127
