Yes. A Gift deed being an instrument for transferring the rights in the property can be challenged in India.

Gift:                A gift is a gratuitous transfer of property by a donor to a donee voluntarily.

Gift Deed:     A legal document describing the transfer of property. A gift deed is an agreement between the two parties (donor and donee) for transfer of right in the property.

Essentials to make a gift valid:

  • Property: The property to be gifted can be moveable or immovable. It must be an existing property. Future property cannot be transferred
  • Acceptance of gift: The gift has to be accepted by the donee or on his behalf. If the gift is not accepted during the lifetime of the donor, it is invalid. If the donee dies without accepting the gift, it becomes void.
  • Parties must be competent to contract: Donor has to be a person capable of making a contract.  A minor cannot be a donor. However, a minor can be a donee. In such a case, the gift has to be accepted by a guardian on his behalf.
  • Consideration:  There is no consideration in gift. There can be a conditional gift such that the condition is not based on donor’s will or pleasure. The conditional gifts are incomplete until conditions are complied with. 
  • Voluntarily: Gift has to be made with free consent. Free consent implies the absence of :
  • Fraud
  • Coercion
  • Misrepresentation
  • Undue influence
  • Registration: A gift deed made for transferring immovable property has to be registered compulsorily as per The Registration Act, 1908.  The gift deed has to be signed by the parties and attested by two witnesses.

When we gift any moveable property, gift deed is not mandatory. The gift deed even if made, may or may not be registered but delivery and acceptance is a must.

Grounds for challenging the Gift Deed:

A gift deed can be challenged if any of the above mentioned legal requirements for making a gift transaction valid have not been complied with, like:

  • Consent was not free.
  • Gift deed not executed and registered as per legal provisions
  • Parties not competent to contract
  • Consideration is present.
  • Acceptance not made
  • If the gift is conditional and the condition is not fulfilled, gift deed can be revoked.

Revocation of gift deed:

  • Gift deed can be revoked by the donor for any legally valid reason as available for rescinding the contract.
  • Revocation by agreement – Donor and donee may agree at the time of making the gift that the gift can be revoked on the happening of an event which is not dependent on the will of the donor. The condition for revoking the gift should be made clear to the donee at the time of executing the gift deed. The unilateral revocation of the gift is not possible.
  • If the gift is incomplete and the title remains with the donor, the gift deed can be cancelled by the donor.

When to file suit for cancellation of gift deed:

A civil suit for cancellation of a gift deed can be filed within three years of coming to the knowledge of the fact that there exists a ground to challenge the gift deed.

A gift deed can also be cancelled by executing a cancellation deed if both parties agree.

Details of Gift Deed Creation – and procedure in Punjab

Gift Deed Creation and procedure in Punjab

Gift of property is made without any monetary consideration. It is generally made to relatives out of love and affection. It is a transfer of ownership in property from one person to another.

In the recent past, during an interaction with a native from Punjab who was settled in the UK, we realised the complexities that arise while an individual wants to give estate to a child.

Confused by various incomplete sources of information and anxious about the exact legalities involved, he was keen to know the precise legal requirements for this document.

Our lawyers felt we needed to spell out these pointers for other such people too. The same are discussed below:

Meaning of Gift deed:

It is a legal document describing the transfer of property from the donor to the donee without any exchange of money. The donee becomes the absolute owner of the gifted estate. In case of onerous gifts, obligations are also transferred.

What can be gifted:

  • Moveable or immovable property
  • Tangible property
  • Existing Property

Parties in a deed:

  • Donor (the one who transfer property)
  • Donee (one who is the recipient)

Any person who is competent to contract can be a donor. A minor cannot make a gift of his estate.

The process of Creation of Gift Deed:

Act of Gifting:    The Donor must intend to make it voluntarily out of his free will without any monetary consideration.

The donor must be:

competent to make a contract, i.e. gift deed (minor cannot be a donor)
aware of his act and its implications

Acceptance: Donee must accept it during the lifetime of the donor and while the donor is still capable of making a gift.

Acceptance is shown by various acts like taking possession of property or taking possession of the deed. Possession can be actual or constructive. Mere silence also amounts to acceptance where silence signifies assent. A gift without acceptance is not complete.

Registration: Deed for transfer of immovable property has to be registered compulsorily otherwise the transfer of ownership is invalid. It has to be signed by both the parties and attested by witnesses.

Registration fee and Stamp duty have to be paid as per the applicable rates in a particular State.

Moveable estate can be gifted without any deed, but delivery and acceptance are necessary for completing the transaction.

Important points

  • It must mention the details of the donor and donee.
  • Property to be gifted must be described clearly
  • It cannot be revoked unless there is a clause of revocation in the deed itself.

As a special context, we are listing out some considerations for the state of Punjab, since some recent clients were natives of this state.

Process of registration in Punjab

The basic procedure of registration of this deed is the same in every State.

  • Preparing the Deed
  • Signing by Donor and Donee
  • Attestation by witnesses
  • Registration at Registrar’s office

State fixes stamp duty. It is different in different States.

The range of applicable stamp duty in Punjab is 0.5% to 6%.  There will not be any application fee charged in case the property is transferred to any blood relative within the lifetime of the donor. The blood relatives include the mother, father, spouse, son, daughter, brother, sister, grandson and granddaughter.

Role of civil lawyers during property dispute and partition in India

Role of civil lawyers during property dispute and partition in India

According to some civil lawyers property dispute is a common practice in India during the partition of property.

Every household, unfortunately, goes through some or the other property dispute during partition.

Sometimes back we were approached by Mr Vikas regarding a property issue with his brother while partition. Mr Vikas lives abroad while his brother lived in India. Mr Vikas’s brother kept all the good share of land and property to himself and gave all low-value land to Mr Vikas.

The plight of Mr Vikas was genuine, and therefore we took up the case. First, as property lawyers, we had to devolve all the partition done by the brother and then again file for the fresh partition plea.

We did a fresh and complete calculation and evaluation of the property keeping in mind Mr Vikas’s interest on the forefront.

And eventually, we succeeded in making a fair partition where everybody got the equal shares as per their respective rights.

Because property issue is common and the toughest to resolve in India and everywhere else we must be aware and informed of few things:-

What counts as property dispute?

Illegal possession of property:  When there is disagreement regarding the ownership of the property and it is alleged that a property is possessed illegally and is not authorized.

Title disputes: When the registration of a property is challenged.

Rental Disputes: When landlords and tenants dispute regarding possession of the property, rent dues, terms and conditions of the rental agreement.

Other common areas of property litigation are:

  • Land Leases including agricultural land
  • Land Acquisition Cases
  • Partition of Property, Disputes resulting from ancestral and self-earned property

Whom to approach in matters of Property Dispute?

Civil Lawyers.

You must find a civil lawyer for full legal assistance in India. They are specialized in a wide range of areas and provide legal advice and handle cases like:-

  • Ownership/rent recovery
  • Reclamation of land or premises from unlawful occupiers
  • Rent and service restoration charges under long leases
  • Site plan clearance services
  • Tenancy cancellation agreements
  • Rent contract and Security Deposit disputes
  • Applications for relief under lengthy contract agreements with builders
  • Boundary disputes
  • Disputes over financial interest/s in property (commercial or family law bases), Mortgage disputes, Property and Banking disputes
  • Misrepresentation and fraud in property cases
  • Planning consent disputes – Change of Land Use Agreements (CLU)

Civil lawyers for Property disputes contest complex property issues and assist clients in the negotiation and legal drafting of personal, commercial and residential property issues.

Thus they have the experience and expertise to provide clients practical legal advice apart from a complete legal representation, based on the client’s need.

Legal advice on property matters – Now on FB Live

Seeking legal advice for property matters has become imperative in the changing scenario in the country. India is euphoric on the wave of creating a clean and transparent environment to live in. One of the first steps that the world saw in this context was the Demonetisation process that was carried out in November 2016. In the last few months especially, the Modi government has promised to fight both corruption and black money and is eager to bring an end to benami transactions.

After the attempts to convert the country into a cashless digital economy, the government now seeks to attack the domain of illegal property transactions –specifically, ‘benami property.’ The latest Benami Transactions (Prohibition) Act of 2016 modifies the original Benami Transactions (Prohibition) Act of 1988 by closing loopholes and imposing stricter penalties including imprisonment up to seven years and fines of almost 25 percent of the market value of the property. The law also provides a complex web of appellate procedures, which, given India’s notoriously slow legal system, almost ensures that the property would not be marketable for some length of time.

“Benami” property transactions are basically those through which land or property is bought in somebody else’s name. These are most often used to find a safe avenue for black money. In a predominantly cash economy like India’s, benami deals are easy to transact and hence very attractive.

There are issues that keep emerging in the context of the description of what could or could not be termed as ‘benami.’ There can be endless debates about these small definition ambiguities but it still doesn’t take away the fact that there is a wave of “clean India” that is going to determine how documents are viewed, assessed and scrutinized.

While the Benami Act does provide for exceptions like the one described above, the point is that it is best to get expert legal advice to ensure that one does not get snared by the law. This is especially important for NRI’s many of whom have legal transactions which are benami in nature and were done simply to beat the excessive regulations and paperwork required to buy property in India.

NRI’s, especially those with OCI (Overseas Citizen of India) or PIO (Person of Indian Origin) cards can be particularly vulnerable when it comes to agricultural land. The Reserve Bank of India permits an NRI, an OCI or a PIO to buy residential and commercial property in India, as we already know. But they are not allowed to purchase agricultural land, plantation land or a farm house in India. They are not even authorized to acquire such property as a gift but can hold such immovable property if acquired by way of inheritance.

The laws and their application can get onerous, and it is best to get the advice of a good NRI legal adviser soon and not to procrastinate. When it comes to legal property matters, things almost never get easier with time. In the meanwhile, it is advised that NRI’s get their paperwork in order, or get help to do so.

It is in your interest that you keep a close check on the documents that are required for your property to stay safe and you not to have any hassle of being subject to scrutiny. Hence, getting the required transfer, mutation, partition, etc. done should be of prime importance. The Benami Act and all other measures being taken in India signal the beginning of a new era for Indian real estate and in the long run, may result in creating institutions that improve transparency and reduce cumbersome paperwork in real estate transactions. In the meantime, NRI’s are advised to get their documentation in order and seek professional legal advice from a competent legal services expert capable of handling NRI property issues.

NRI Legal Services is a company that has been resolving NRI property issues for almost the past two decades. Given the nature of the work we do, we try and bring a refreshed approach every now and then so that our clients gain the maximum in terms of interaction. It is our effort to be easily accessible and approachable for solutions.

On these lines, we have launched not only a web application but are also on our way towards launching FB Live – our determination to reach out to NRIs in a more intensive manner. Now it is easy to access our legal team for all kinds of advice on property matters. In addition, you can contact us anytime, even while on the move and get details about your rights as an NRI and all information related to Transfer of property, making of a Will and getting Property documents in order. These have assumed greater importance now since the government has decided to target all benami property in the coming months. Convenient communication helps us resolve the legal matters in a better manner and spread our presence over a wider range of NRIs.

Divorce Might be More Expensive Than Marriage!

property settlement

With the pain of separation and divorce, comes the harsh reality of sitting across the table and settling asset distribution too. Divorce cases could be resolved with the mutual consent or contested in court – in both the cases; there is a need for clarity about the ownership of assets. It is only with this clarity that division of all assets can be done in a fair manner.

Some specialized legal experts handle the intricacies of divorce. We step in when it comes to evaluation of property and assessment for the purpose of settlement in such cases. Take the story of Ritika Saluja, who approached us after she viewed the history and service details of the company on the internet. She had been living in Sydney, Australia for the past twenty years after her marriage to Sachin Saluja. In addition to struggling with her divorce and other issues of separation, she also found herself in a fix over the property that her husband had in India. As expected, he was not very forthcoming in providing details of the same. She had no clue whatsoever about the value of these properties – neither Indian nor Foreign. Once she contacted our office, an extensive online interaction was done with her to obtain the exact details of her case. Subsequently, follow-up through emails and talks helped her stay in tune with all the efforts being done to pursue her particular case. To save her from the financial crunch that she feared and to help her get her rightful share, the company legal experts diligently resolved the issues without her having to travel to India even once for any query or filing.

For NRIs, it is a humungous task getting an asset evaluated in India – and preparing a report for legal purposes is a greater challenge. They cannot even travel frequently to India to take care of their property matters. While the divorce issues could be taken care of lawyers who specialize in separation cases, expert advice is needed for the asset division settlements. However, frequently during a divorce, the two parties might not be aware of the property of the other. This leads to a loss of direction. In India, the notion of marital property rights has not received as much attention as in some other countries. In the largely patriarchal society that India has, it is accepted that a woman ‘belongs’ to her husband’s family after her marriage. Her right to property has not been recognized in society. In fact, the Indian community still reflects a relatively insecure financial status for women. Usually, they do not have clarity about the level and nature of investments done by their husbands. Hence, over the years, divorce laws have been framed to favour women so that they are protected financially. We could define Property in various ways – share in business, dowry that the woman brought with her, gifts that she received whether in her marriage or later on from friends and relatives and various other assets collected by the couple.

In a divorce case either the man or woman will approach the court to settle matters of division and settlement of property. This division is required either for themselves or, for their children. The only property considered here is of course just the ‘marital property.’ Also, it is vital to reflect income disparity during the division of assets. We could very well ask ourselves – who would want to talk about assets and their details when love & marriage are the only things in mind? But in reality, it does help being aware of each other’s assets during the marriage. It is also important to be alert and aware of the joint/individual assets bought during the marriage. Let not divorce become a mentally and financially more expensive option – stay alert, stay secure!