Cancellation of a Gift Deed

Gifting is a common practice to express gratitude or transfer assets without monetary exchange. However, there are instances where the donor may wish to retract this generous act. The need for Gift Deed cancellation arises under various circumstances, such as fraud, coercion or failure to meet specified conditions.

It’s a legal process that safeguards the donor’s rights and ensures that the property is transferred back to the donor or as per the court’s directive.

What is the Revocation of a Gift Deed?

Cancellation of a Gift Deed or revocation of gift deed occurs when the donor, the person who gave the gift, decides to revoke the deed and reclaim the gifted property. This can happen under certain legal conditions, such as if the gift was given under duress, based on fraud or if specific conditions in the deed were not met.

The process involves filing a petition in court, presenting evidence and obtaining a court order to cancel the deed. It’s important to note that only the donor can initiate the cancellation and it must be done within a specific time frame as per the law. The revocation ensures that the property rights are reverted back to the donor.

Who can file a Gift Deed Cancellation?

In India, the cancellation of a Gift Deed can be filed by the donor, who is the person gifting the property. According to Section 126 of the Transfer of Property Act, 1882, the donor has the right to cancel a gift deed under specific circumstances. The donor must have a valid reason for revocation, such as fraud, coercion or failure of the donee to fulfil obligations.

The cancellation process typically involves filing a petition in the relevant court, providing evidence to support the revocation and obtaining a court order. It’s important to note that the revocation must be done within three years of the donor becoming aware of the reason for the cancellation.

What are the Grounds for Cancellation of Gift Deed?

The revocation of a Gift Deed in India is governed by various legal provisions and it can be done under specific circumstances. Here are the key grounds for the cancellation of a Gift Deed, along with the relevant legal provisions:

Fraud or Misrepresentation (Section 17 of the Indian Contract Act, 1872)

If the Gift Deed was executed based on fraudulent misrepresentations or deceit by the donee, the donor has the right to cancel the deed. Fraudulent inducement to enter into the contract of gift can render the deed voidable at the option of the donor.

Coercion or Undue Influence (Section 15 and Section 16 of the Indian Contract Act, 1872)

If the donor was coerced or unduly influenced into making the gift, the Gift Deed can be canceled. This includes situations where the donor was under duress or was not in a position to make a free and informed decision.

Failure to Meet Conditions (Section 126 of the Transfer of Property Act, 1882)

If the Gift Deed was subject to certain conditions and the donee fails to meet these conditions, the donor can cancel the deed. The deed must explicitly state that the gift is conditional and specify the conditions.

Non-acceptance by the Donee (Section 122 of the Transfer of Property Act, 1882)

For a gift to be valid, it must be accepted by the donee during the lifetime of the donor. If the donee refuses to accept the gift or does not acknowledge the acceptance, the donor can cancel the Gift Deed.

Mutual Agreement

The donor and donee can mutually agree to cancel the Gift Deed. While there is no specific statutory provision for this, mutual consent is a recognised ground for the revocation of contracts, including gift deeds.

Lack of Delivery of Possession (Section 123 of the Transfer of Property Act, 1882)

In the case of immovable property, if the donor has not delivered possession of the property to the donee, the Gift Deed can be canceled. The transfer of possession is a critical element in the completion of a gift transaction.

Revocation Clause

Some Gift Deeds may include a revocation clause that allows the donor to cancel the deed under specific circumstances. The legality and enforceability of such clauses are determined based on the specific terms of the deed and general contract law principles.

Illegality or Immorality (Section 23 of the Indian Contract Act, 1872)

If the purpose of the gift is illegal or immoral, the Gift Deed can be canceled. The law does not enforce contracts that are against public policy.

Incompetency of the Donor

If the donor was not competent to make the gift at the time of execution of the Gift Deed, due to reasons such as minority, insanity or intoxication, the deed can be canceled. The competency is governed by the general principles of contract law under the Indian Contract Act, 1872.

Forgery or Tampering

If the Gift Deed is found to be forged or tampered with, it can be canceled. This is a criminal offence under the Indian Penal Code, 1860 and also grounds for civil action to cancel the deed.

Death of the Donor before Acceptance

If the donor dies before the donee accepts the gift, the Gift Deed can be canceled, as the gift is not complete without acceptance. This principle is derived from Section 122 of the Transfer of Property Act, 1882.

Inadequate Stamp Duty or Non-Registration (Section 17 of the Registration Act, 1908)

If the Gift Deed is not adequately stamped or not registered as required by law, it can be challenged and canceled on the grounds of non-compliance with legal formalities.

It’s important to note that the cancellation of a Gift Deed is a legal process that requires the intervention of a court. The donor must file a suit for revocation, providing evidence to support the grounds for cancellation. The court will then examine the evidence and decide whether the Gift Deed should be canceled. Legal consultation is recommended to navigate the complexities of this process and ensure that the revocation is carried out in accordance with the law.

Process of Cancelling a Gift Deed in India

The process of cancelling a Gift Deed in India involves several legal steps:

• Filing a Petition: The first step is to file a petition in the relevant court seeking the cancellation of the Gift Deed. This petition should be filed in the court that has jurisdiction over the area where the property is located. The petition must clearly state the grounds on which the revocation is sought.

• Issuing Notice: Once the petition is filed, the court will issue a notice to the donor and any other parties involved, such as legal heirs or beneficiaries, informing them about the petition and the scheduled hearing date.

• Presenting Evidence: The petitioner (the person seeking cancellation) must present evidence to support their case for revocation. This evidence can include documents, witness testimonies and other relevant materials that demonstrate the validity of the grounds for cancellation.

• Court Proceedings: The court will conduct hearings where both the petitioner and the opposing parties can present their arguments and evidence. The judge will consider all the evidence and arguments presented before making a decision.

• Court Order: If the court finds that the grounds for revocation are valid and substantiated by the evidence, it will issue an order to cancel the Gift Deed.

• Revocation in Records: After receiving the court order, the petitioner can take a certified copy of the order to the registration office where the Gift Deed was originally registered. The registration office will then officially cancel the Gift Deed from their records and the property rights will revert to the original owner or as directed by the court.

Conclusion

The cancellation of a Gift Deed in India is a legal process that requires careful adherence to specific procedures. It involves filing a petition in court, presenting evidence and obtaining a court order to cancel the deed. The grounds for revocation can vary, including fraud, coercion, failure to meet conditions and mutual agreement, among others.

It’s crucial for individuals seeking to cancel a Gift Deed to understand the legal requirements and seek professional legal assistance to navigate the process effectively. By following the prescribed legal steps, one can ensure that the revocation is carried out correctly and that the property rights are properly restored or adjusted as per the court’s decision.