Cancellation of a Gift Deed in India

A gift deed is one of the ways to transfer property to someone as a legal document that is drafted to legally transfer some money or property to someone in the form of a gift. As per the Indian Law, there are certain conditions that make up the essential elements of the gift deed, firstly, the property can be either movable or immovable, secondly, the property should be transferrable, thirdly, it should be a current property and not a future or accrued property, and fourthly, the property should be tangible.Understand More about everything about Gift deed of property in India.

The article further deals with the details including grounds, processes, and exceptions of the questions revolving around cancellation of gift deeds. The cancellation of gift deed is mentioned in the Indian Law as it gives a second chance to reconsider whom the property needs to be gifted, to and if they deserve it. It is dealt with by Section 126 of the Transfer of Property Act of 1882. The requirement here is that the clause needs to be agreed upon by both the donor and the donee.

Grounds For Cancellation Of Gift Deed

A gift deed can be canceled under specific circumstances. The Supreme Court of India has outlined several valid reasons for the cancellation of a gift deed, such as if the deed is found to be forged or tampered with.

In B.S. Joshi v. Sushilaben (2013), the Supreme Court ruled that a gift deed cannot be canceled just because the donor made a new will. The new will takes effect only after the donor's death, so the earlier gift deed remains valid.

The cancellation of a gift deed is governed by Section 126 of the Transfer of Property Act of 1882, and as per which these are the following grounds on which a gift deed can be canceled.

• Coercion or Fraud

If a gift deed has been under coercion or fraud, like if it is proved that the donor’s consent was not free, and under some burden or influence, then there hasn’t been a voluntary transfer of ownership and hence, the gift deed can be canceled. This is as per Section 19 of the Indian Contract Act, 1872, that in circumstances where the donor’s consent was obtained through coercion, undue influence, fraud, or misrepresentation the gift contract may be voidable at the donor’s discretion.

• Mutual Agreement

A gift deed at any point in time can be canceled if there is a mutual agreement between them. Such conditions can be mentioned in the mutual agreement and understood by both parties and hence as per which the gift deed would be canceled and the donee would need to return the gifted property back to the donor.

• Rescission by Agreement

The gift deed can be canceled as per the agreement that is made by the mutual decision of the donor and donee. It is mentioned in the agreement that in case of certain circumstances and conditions the gift deed will be revoked. Two things to remember here are, firstly, a gift deed cannot be canceled unilaterally, and secondly, the gifts that are to be revoked under this ground need to be revoked within three years of the donor's learning of it.

• Incompletion and Donor Hold the Title

When a gift deed is incomplete then the title remains with the donor during this time and hence the donor can cancel it at that time. The gift deed is incomplete when it is unregistered, the payment of staff duty is insufficient, attestation of the gift deed is improper, or the donee fails to sign the gift deed, the donee refuses to accept the gift deed, or the gift not accepted while the donor was alive.

• Forgery

The gift deed can be canceled in case the gift deed has been forged. As per both the Transfer of Property Act, of 1882 and the Indian Contract Act, of 1872, forgery is a valid ground for cancellation of a gift deed.

Process of Cancellation of a Gift Deed in India

Cancellation of a gift deed in India can be done by following the legal procedure outlined below:

• Step 1: File a Petition to Initiate Legal Proceedings - Firstly, a petition has to be filed in the relevant court to cancel the gift deed. The petition should be filed in the court within whose jurisdiction the property is situated. The grounds must be stated for the cancellation of the gift deed.

• Step 2: Serve Notice to Donor and Other Parties - Once the petition is filed, the court will issue a notice to the donor and any other parties involved like the legal heirs informing them of the intent to cancel the deed.

• Step 3: Presenting Gathered Evidence - The petitioner will need to present evidence to support their case for cancellation. This can include documents, witnesses, and other forms of evidence.

• Step 4: Court proceedings - The court will hear arguments from both parties and consider the evidence presented before making a decision.If the court finds the grounds of cancellation valid, it will cancel the gift deed.

• Step 5: Obtain Order for Cancellation - Upon favorable adjudication, obtain a court order approving the cancellation of the gift deed. The court order serves as legal validation for the revocation and directs relevant authorities to update records accordingly.

• Step 6: Cancellation/Revocation of Gift Deed from Records - After the court cancels the gift deed, the petitioner can get a certified copy of the order and present it to the registration offices and relevant land or property authorities where the gift deed was registered. The registration office will then cancel the gift deed from their records.

FAQs

Can a gift deed be canceled?

Yes, a gift deed can be canceled but there needs to be a valid reason and ground for it that are mentioned above.

What are the legal provisions for canceling a gift deed in India?

Section 126 of the Transfer of Property Act of 1882 is the legal provision that governs the canceling of a gift deed in India.

What are the grounds for the cancellation of a gift deed?

The grounds for the cancellation of a gift deed are coercion or fraud, mutual agreement, rescission by agreement, incompletion and donor holding the title, and forgery.

What evidence is required to prove the grounds for cancellation of a gift deed?

The evidence required to prove the cancellation of a gift deed is to have witnesses or evidence that some particular event has happened that is leading to the cancellation of a gift deed.

Can a gift deed be canceled without going to court?

Yes, in case of an incomplete gift deed, mutual agreement, and recession in agreement, a gift deed can be canceled without the interference of the Court.

What is the process of canceling a gift deed?

The process of canceling a gift deed in detail is mentioned above and involves visiting Court under Limitation Act.

Who has jurisdiction over a suit for the cancellation of a gift deed?

The respective courts of the donors have jurisdiction over a suit for the cancellation of a gift deed.

What are the possible outcomes of a suit for cancellation of a gift deed?

The possible outcomes of a suit for cancellation of a gift deed are either the gift deed is canceled or it does not fit the grounds and hence cannot be canceled.

What is the importance of seeking legal advice before canceling a gift deed?

There is a high need to seek legal advice before canceling a gift deed because, to begin with, lawyers know the most about how to safely draft the deed that isn’t causing your trouble, and secondly, they can advise you in the best way possible about how to gift the property. This way you can keep yourself safe from any kind of issues that might arise and put you in losses.

About The Author: 

Adv. Arunoday Devgan has specialized in Property, Criminal, Civil, Commercial Law, and Arbitration & Mediation since December 2023. He drafts legal documents and represents clients before authorities like the Delhi Real Estate Regulatory Authority and District Courts. Arunoday is also an upcoming author, with a debut book titled "Ignited Legal Minds" scheduled for release in 2024, exploring the nexus between Law and Geopolitical Relations. He has completed the British Council Course, enhancing skills in communication, public speaking, and formal presentations.