Understanding Your Rights and Limitations

The Transfer of Property Act, 1882, serves as the cornerstone legislation governing gifts in India. Section 126 of this Act specifically deals with the revocation of gifts, establishing clear parameters for when and how a gift can be legally revoked. The law strikes a delicate balance between protecting the sanctity of completed gifts and providing relief in justified circumstances.

Two Pathways to Gift Revocation

1. Revocation by Mutual Agreement

The first method allows for revocation when both the donor (giver) and donee (receiver) have agreed to specific conditions at the time of making the gift. However, this isn’t as simple as it might sound.

Key Requirements:

• The revocation condition must be expressly stated in writing

• The condition cannot depend solely on the donor’s whim or pleasure

• The agreement must be part of the original transaction

• The triggering event must be specific and objectively determinable

Example: A donor might gift property with the condition that it will revert if the donee moves abroad permanently. This creates a valid revocation clause because it’s based on a specific, objective event rather than the donor’s arbitrary decision.

2. Revocation by Rescission

The second pathway treats gift revocation similarly to contract rescission, allowing revocation when the donor’s consent was compromised.

Valid Grounds Include:

• Coercion: When the donor was forced to make the gift under threat

• Undue Influence: When someone in a position of trust abused their relationship

• Fraud: When the donee deliberately deceived the donor

• Misrepresentation: When false information influenced the donor’s decision

Critical Time Constraints

One of the most important aspects of gift revocation is timing. The law provides a three-year limitation period for revocation based on fraud, coercion, misrepresentation, or undue influence. This period begins from the date the donor becomes aware of these circumstances, not from the date of the gift itself.

This time limitation serves an important purpose: it provides certainty and prevents indefinite challenges to completed gifts while still protecting donors who discover they were wronged. The right to revoke the gift on these grounds is forfeited if the donor explicitly ratifies the gift, either through express approval or by conduct.

What Makes a Gift Irrevocable

The “Donor’s Will” Prohibition

Section 126 explicitly states that any gift that can be revoked “wholly or partly at the mere will of the donor” is void from the outset. This fundamental principle ensures that genuine gifts involve a complete transfer of ownership without the possibility of arbitrary recall.

Completed Gifts are Protected

Once a gift is legally complete – meaning it has been properly executed and delivered – it generally cannot be revoked for reasons beyond those specified in Section 126. The Supreme Court has consistently upheld this principle, ruling that subsequent conduct by the donee, however disappointing to the donor, does not justify revocation.

Protecting Third-Party Rights

The law also considers the rights of innocent third parties. When gifted property is sold to a bona fide purchaser who:

• Acts in good faith

• Provides valuable consideration

• Has no knowledge of any revocation conditions

Such purchasers are protected, and their rights cannot be affected by subsequent attempts to revoke the original gift.

Burden of Proof

When seeking revocation, the burden lies on the party claiming that grounds for revocation exist. They must provide clear evidence of coercion, fraud, undue influence, or misrepresentation, along with proof that they discovered these facts within the limitation period.