Gift Deeds Void Ab Initio under Indian Law

The Doctrine of Void Ab Initio in Relation to Gift Deeds under Indian Law

Introduction

A gift, under Section 122 of the Transfer of Property Act, 1882 (TPA), is defined as the transfer of certain existing movable or immovable property made voluntarily and without consideration by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee. While gifts are a common mode of property transfer, their validity can be challenged on various grounds. One such ground is that the gift deed is 'void ab initio', meaning it is null and void from its very inception, lacking any legal effect from the beginning. This article provides a comprehensive analysis of the circumstances under which a gift deed may be considered void ab initio under Indian law, drawing upon statutory provisions and judicial precedents.

Essential Elements of a Valid Gift under Indian Law

Before delving into the concept of void ab initio gifts, it is pertinent to outline the essentials of a valid gift as prescribed by the Transfer of Property Act, 1882, and interpreted by the judiciary:

  • Voluntary Transfer: The transfer must be made by the donor's free will and consent, without coercion, undue influence, fraud, or misrepresentation.
  • Without Consideration: A gift must be gratuitous. The presence of any monetary or other valuable consideration would transform the transaction into a sale or exchange, not a gift.
  • Existing Property: The subject matter of the gift must be existing property, whether movable or immovable. Future property cannot be the subject of a valid gift (Section 124, TPA).
  • Identifiable Donor and Donee: There must be a clearly identifiable donor competent to contract (except that a minor cannot be a donor but can be a donee) and a donee capable of holding property.
  • Acceptance by Donee: The gift must be accepted by the donee, or by someone on their behalf, during the lifetime of the donor and while the donor is still capable of giving (Section 122, TPA). Acceptance can be express or implied (K. Balakrishnan v. K. Kamalam And Others, (2004) 1 SCC 581).
  • Formalities of Transfer (Section 123, TPA):

The Supreme Court in Renikuntla Rajamma (Dead) By Legal Representatives v. K. Sarwanamma, (2014) 9 SCC 445, clarified that the retention of possession or usufruct by the donor does not invalidate a gift deed, provided the transfer of title is clear and absolute as per Sections 122 and 123 of the TPA. The core is the divestment of title by the donor and its vestment in the donee.

Grounds Rendering a Gift Deed Void Ab Initio

A gift deed is considered void ab initio when it is fundamentally flawed from its inception, rendering it a nullity in the eyes of the law. Such a deed does not require a formal cancellation to be ineffective, although a declaration to that effect may be sought for clarity and record. Key grounds include:

1. Lack of Free Consent: Fraudulent Misrepresentation as to the Nature of the Document (Non Est Factum)

The doctrine of 'non est factum' (it is not his deed) applies when a person executes a document that is radically different in character or nature from what he intended to execute. If the donor was deceived into signing a gift deed under the belief that it was an entirely different document (e.g., a power of attorney or a lease deed), the deed is void ab initio. This is because there is no real consent to the transaction embodied in the document.

The Supreme Court in Dularia Devi v. Janardan Singh And Others, 1990 Supp SCC 216, affirmed the distinction between void and voidable documents, noting that if a transaction was void (e.g., where an illiterate person did not intend to sign what she did sign), the matter could be adjudicated appropriately. High Courts have consistently held that where a deed is executed due to misrepresentation as to its fundamental character, the transaction is void ab initio (Harmesh Kumar And Others v. Maya Bai And Another, 2005 SCC OnLine P&H 500; Hamelo v. Jang Sher Singh, 2001 SCC OnLine P&H 603; Umarannessa Nnessa Bibi v. Jamirannessa Bibi And Anr., AIR 1923 Cal 570; Jami Appann v. Jami Venkatppadu And Others, AIR 1953 Mad 720). These cases often rely on the principles laid down in English cases like Thoroughgood's case (1582) 2 Co. Rep. 9a and Foster v. Mackinnon (1869) LR 4 CP 704.

It is crucial to distinguish this from fraudulent misrepresentation as to the contents or terms of the document, where the donor knows they are executing a gift deed but is misled about certain specifics (e.g., the extent of property). In such cases, the deed is generally considered voidable at the option of the donor, not void ab initio (Ningawwa v. Byrappa Shidappa Hireknraba, AIR 1968 SC 956, as discussed in Harmesh Kumar and Prem Singh And Others v. Birbal And Others, (2006) 5 SCC 353).

2. Incapacity of the Donor

A valid gift requires a competent donor. If the donor is legally incompetent to make a transfer at the time of executing the gift deed, the deed is void ab initio.

  • Minority: A minor is incompetent to contract (Section 11, Indian Contract Act, 1872). Consequently, a gift made by a minor is void ab initio. The Supreme Court in Mathai Mathai v. Joseph Mary Alias Marykkutty Joseph And Others, (2015) 5 SCC 622, held a mortgage deed executed by a minor to be void ab initio, referencing Mohori Bibee v. Dharmodas Ghose (1902-03) 30 IA 114. This principle extends to gifts, as a gift is a transfer of property and a minor cannot validly alienate property.
  • Unsoundness of Mind: A person of unsound mind, who is incapable of understanding the nature of the transaction and its effects upon their interest at the time of execution, cannot make a valid gift. Such a gift would be void ab initio. The party alleging unsoundness of mind bears the burden of proof (C.J Augustine v. Thankamma Thomas & Another, 2005 SCC OnLine Ker 260, where the plaintiff failed to prove incapacity).

3. Absence of Title in the Donor

It is a fundamental principle of property law that 'nemo dat quod non habet' (no one can give what they do not have). If the donor purports to gift property in which they have no title or interest at the time of the gift, the gift deed is void ab initio. The donee acquires no rights under such a deed. The Patna High Court in Taramani Devi & Ors. v. Gobind Ram Sharma & Anr., 2002 SCC OnLine Pat 30, held that if the donor was divested of his title over the property, he had nothing to transfer by way of gift, rendering the deed ipso facto null and void, and no declaration or cancellation within a limitation period was necessary.

4. Gifts of Coparcenary or Ancestral Property under Hindu Law (Subject to Exceptions)

Under Mitakshara Hindu law, a coparcener generally cannot gift their undivided interest in coparcenary property, nor can a Karta gift ancestral property, except for very limited 'pious purposes' or within reasonable limits to certain relations. A gift of coparcenary property that does not fall within these exceptions is typically considered void ab initio.

Several High Courts have affirmed this position. The Madras High Court in Ramakrishna Naidu v. Shanmugasundaram And Ors., 1993 (2) MLJ 172, held that a gift by a coparcener of his undivided interest in family properties is wholly invalid and void in toto. Similarly, the Karnataka High Court in N R Renukappa v. SMT. Rudranamma, 2022 SCC OnLine Kar 1221, and SRI C R Kemparaju S/O Late SRI C Ramaswamy v. SMT C R Vanajakshi D/O Late SRI Ramaswamy, 2021 SCC OnLine Kar 15228, reiterated that a gift deed in respect of ancestral/coparcenary property is void ab initio, and there is no need to seek its cancellation. The Rajasthan High Court in Sarjayo v. Board of Revenue Ajmer, 2015 SCC OnLine Raj 7490, held a gift deed by a Karta negating the rights of other family members in ancestral land to be void ab initio to the extent of their shares.

However, an exception exists where the gift is made with the consent of all other coparceners, or where the donor and donee constitute the entire coparcenary body. In such cases, the gift may be valid (Ram Saran Singh And Another v. Prithipal Singh, 1949 SCC OnLine All 58).

5. Non-Compliance with Mandatory Statutory Formalities Leading to Nullity

Section 123 of the TPA lays down mandatory requirements for effecting a gift of immovable property: a registered instrument signed by the donor and attested by at least two witnesses. Failure to comply with these fundamental requirements can render the purported gift a nullity.

In Gomtibai (Smt) (Dead) Through Lrs. And Others v. Mattulal (Dead) Through Lrs., (1996) 11 SCC 681, the Supreme Court held that a partition deed intending to gift land was invalid as it lacked a registered instrument of gift and acceptance by the donee. While non-registration makes a gift of immovable property incomplete and ineffective to pass title (Atmaram Sakharam Kalkye), if other essential elements like attestation are fundamentally flawed to the extent that the document cannot be considered legally executed, it may be argued to be void. The absence of a registered instrument for immovable property means no gift has legally come into existence.

6. Gifts for Unlawful Object or Consideration or Against Public Policy

Although gifts are without consideration, if the object or purpose of the gift is unlawful or against public policy (as per Section 23 of the Indian Contract Act, 1872, principles of which can apply to transfers), the gift would be void. For instance, a gift made to stifle a criminal prosecution or for an immoral purpose would be void. In Vikram Badauniya Education And Welfare Society v. Deputy Director Of Consolidation And 7 Others, 2020 SCC OnLine All 37566, while the court was hesitant to declare a gift deed executed in breach of a restraint order (against executing a *sale deed*) as void ab initio per se, it acknowledged it as a justiciable issue that could affect its validity.

Void v. Voidable Gift Deeds: The Legal Distinction and Consequences

It is critical to distinguish between a gift deed that is void ab initio and one that is merely voidable.

  • Void Ab Initio: A void gift deed is a nullity from its inception. It has no legal effect, transfers no title, and does not create any rights or obligations. Its invalidity can be asserted by anyone affected, and it does not typically require a court order to set it aside, though a declaratory decree may be sought for certainty. As stated in Prem Singh And Others v. Birbal And Others, (2006) 5 SCC 353, if a transaction is void ab initio, the statute of limitation (Article 59 of the Limitation Act, 1963, for cancellation of instruments) may not apply in the same way as it does for voidable instruments.
  • Voidable: A voidable gift deed is one that is valid and binding until it is set aside or annulled by the party entitled to do so (usually the donor or their legal representatives). Grounds that typically render a gift voidable include coercion, undue influence, or fraudulent misrepresentation as to the contents or terms of the deed (as opposed to its fundamental character). A suit to set aside a voidable gift deed must be filed within the limitation period prescribed by law (Article 59 of the Limitation Act, 1963). Until set aside, a voidable deed can effectively transfer title. The Kerala High Court in M.K Gopalakrishnan & Ors. v. M.K Rajamma & Ors., 2006 SCC OnLine Ker 514, discussed revocation under Section 126 TPA, which often deals with voidable situations or conditional gifts, distinct from void ab initio scenarios. Similarly, unilateral cancellation of a validly executed and registered gift deed is generally not permissible; the aggrieved party must approach a civil court (V. Devika Rani And Others v. R. Varadarajulu And Others, 2019 SCC OnLine Mad 39153).

The distinction was clearly brought out in Dularia Devi and emphasized in cases like Harmesh Kumar and Hamelo.

Judicial Scrutiny and Burden of Proof

Courts exercise careful scrutiny when a gift deed is challenged as void ab initio, especially if it is a registered document, as registration carries a presumption of due execution and validity, though rebuttable (Parveen Kumar v. Sarojni Devi And Another, 2014 SCC OnLine HP 4861). The burden of proof lies heavily on the party asserting that the gift deed is void ab initio. They must adduce clear and cogent evidence to establish the grounds for such a claim, for example, proving that the donor was an illiterate person who was made to sign the document under the impression it was something else, or that the donor had no title to the property gifted.

Conclusion

A gift deed is void ab initio under Indian law if it suffers from fundamental legal defects from its very inception. Such defects include fraudulent misrepresentation as to the nature of the document (non est factum), legal incapacity of the donor (e.g., minority, unsoundness of mind), complete lack of title in the donor, certain prohibited gifts of coparcenary property under Hindu law, or non-compliance with essential statutory mandates that render the transaction a nullity. Understanding the distinction between void and voidable gift deeds is crucial, as it impacts legal remedies, the statute of limitations, and the rights of the parties involved. The judiciary plays a vital role in adjudicating such matters, ensuring that the principles of voluntariness, competency, and legality underpinning the law of gifts are upheld, thereby protecting the sanctity of property rights and preventing unjust enrichment or deprivation.