Gift deeds and subsequent joint ownership
malathi sharma
(Querist) 21 July 2014
This query is : Resolved
Sir,
A is the sole owner of a plot of land. He awards one-third of his plot as a gift to his sister with following conditions in the gift deed: (1) Either of the two partners can sell his/her share of the property only to the other partner and not to anybody else.
(2) Both the partners will always use the property jointly and will never partition it.
My questions are: (1) Is it possible to execute a gift deed with these conditions. If yes, would it still be called a “gift” deed.
(2) Would such conditions in the gift deed prevent both A and B from selling the plot jointly to a third person C. To sell their plot to C should they do something like this: first A sells his share to B. B then sells the entire plot to C and distribute the money among themselves.
(3) Few years later, A argued that since he was the executant of the gift deed and also he was the sole owner of the plot earlier, so the above conditions will be assumed to have been imposed by him, so he can always revoke the restrictions and sell his share to a third person C, in spite of his sister not wanting him to do so. Will the court allow A to do so.
(4) Suppose Mr. A died and D was his class I (or Class II ) heir. Can D overrule the above conditions and sell his share to a third person E or partition the property, in spite of his aunt B not wanting him to do so, or D will also be bound by the above conditions in the gift deed.
(5) If the above property is not a plot but a flat , say a studio apartment. We know that a studio apartment can not be partitioned or if partitioned will not be habitable. How will the court decide one-third of a studio apartment. If the property is a studio apartment, would it still be necessary to include the second condition above (about partition) in the gift deed to prevent the partners from partitioning the flat. How will the court allow to partition the studio apartment?
(6) Please advise how should A and B execute the gift deed to prevent each other from selling their shares separately to third persons or even partition the property .
Please answer all the questions.
ajay sethi
(Expert) 21 July 2014
conditional gift deeds are valid . your query seems to be an imaginary one
Raj Kumar Makkad
(Expert) 21 July 2014
There is no illegality in the conditional gift and if the condition is violated, such gift can begot revoked in the hands of donor.
malathi sharma
(Querist) 22 July 2014
Sir, my query may be imaginary but I am asking this because I paid for a plot jointly with my brother. But all the money was paid by cheque from his account. The builder said the sale deed would have only my brother's name as buyer because he (the builder) did not have any proof (that I also paid) to show the income tax officials if there is an inquiry later on. So, the sale deed was registered in my brother's name. Now we want the I too must have a share of the property. So we want that my brother should execute a gift deed in my favour. We want these conditions to protect our mutual interests particularly my interests.
I included the question on studio apartment because if it is not possible to execute a gift deed that would restrict each other from selling their shares separately or partition the property we would sell the plot and buy a studio apartment (something that might be difficult to partition), as the plot is small and its cost is about as much as a studio apartment.
My question is: Will the one who gives the gift also be bound by the above conditions or only the receiver of the gift will be bound by these conditions.
Raj Kumar Makkad
(Expert) 22 July 2014
Donor is also bound by the terms and conditions of the gift if the gift is conditional.
