Gifts made by non-Muslims in India are governed by the provisions of the T.P. Act, 1882, whereas the gifts made by Muslims are governed by the muslim personal law. However, other kinds of transfers inter vivos ( between living beings) by Muslims, such as the sale, exchange, mortgage or lease, are regulated by the T.P. Act and not by Muslim law.
Under Muslim law, a person is allowed to lawfully make a gift of whole of his property to another during his life time.
Hedaya defines Hiba in the following words: “Hiba is an unconditional transfer of ownership in an existing property, made immediately and without any consideration.”
According to Fyzee, “ Hiba is the immediate and unqualified transfer of the corpus of the property without any return.”
A gift under Muslim law is a:—
(i) Voluntary, unconditional and immediate transfer by donor of,
(ii) Certain specified existing property (movable or immovable),
(iii) Without consideration (ewaz)
(iv) Accepted by or on behalf of the donee.
Essential requisites of a Gift
(I) Who may give: Donor
The person who makes the gift i.e. donor must have attained the age of majority, must be of sound mind, must be free of any fraudulent or coercive influence, and, must have ownership over the property to be transferred by way of gift.
It must be his intentional, voluntary and free act untainted by coercion and undue influence.
The donor must also have the right to make the gift. A donor has a right to gift only those properties of which he is the owner. A Muslim has a right to gift away all the properties which are under his ownership at the time when declaration of gift is made by him.
(II) Who may receive: Donee
A gift may be made in favour of a Muslim, non-Muslims, heir, non-heir, minor, insane or a jurist is person (e,g. Mosque). Thus, any person capable of holding property may be the donee of a gift. Sex, age, creed /religion or state of mind is no bar to the taking of a gift. It must, however, be proved that at the time of making declaration of gift, the donor must be a Muslim. Where the donor is a non-Muslim, the gift is not Hiba.
The donee must be in existence at the time of making a gift. Thus, a gift to an unborn person or a dead person is void .
A ‘child in mother’s womb’ is competent donee provided it is born alive within six months from the date on which gift was made. If after the gift, an abortion takes place or the child dies in the womb, the gift (already made) becomes void.
‘Juristic person’ are also competent donee thus, a gift in favour of a school or a mosque is valid.
Two or more donees: the donee may be an individual or a class of persons.
Gift to two or more donees must be accepted by all of them separately.
A gift to two or more donees without specifying their respective shares and without giving them separate possession has also been held to be valid. In such cases the donee take the property as ‘tenants-in-common.’
(III) Property/Rights which may be gifted
The property must exist at the time the gift is made and the donor must posses it. The subject matter of a gift can be movable or immovable property, and corporal or incorporeal the following properties can validly be made the subject of a gift:
“Money, mahr (Dower), promissory notes, government securities, Insurance policy, copyright, goodwill, right to repayment of a debt or equity of redemption, right not amounting to full ownership (e.g. right to collect rent and profit), etc.”
A gift will not be valid without delivery of possession. Therefore, a Muslim cannot make a ‘gift of services.’
(IV) Extent of donor’s right to gift
The general rule is that donor’s power to gift the property is unrestricted.
(V) Formalities and Modes of Gift
The act of making a gift should fulfill the following three conditions:—
(i) A declaration by the donor.
(ii) Acceptance by the donee, and
(iii) delivery of possession by the donor and taking of it by the donee.
1. Declaration by gift - declaration is a statement which signifies the intention of the transferor that he intends to make a gift to the donee. There must be clear and unambiguous intention of the donor to make the gift.
2. Acceptance of gift - gift is a bilateral transaction. There must be an acceptance of gift, by or on behalf of the donee. It may be either actual or constructive according to the circumstances of the case. It may be express or implied.
Acceptance signifies the intention of the transferee (donee) to take the property and becomes its owner. Without acceptance a gift is not complete. Under Muslim law, acceptance on behalf of a minor or a person of unsound mind can be given by the guardian of his property.
3. Delivery of possession -
(i) To validate the gift, there must be either the delivery (physical) of possession or, failing such delivery, some overt act done by the donor to put it with the power of the donee to obtain possession.
(ii) Delivery of possession must be immediate for without it the Hiba is imperfect or incomplete, even in the presence of a registered deed. In case the delivery of Possession is not made immediately after the declaration and acceptance, the Hiba will be complete only when the possession is transferred at a subsequent time.
(iii) when the property is in the possession of tenants the requirement of delivery of possession is complete when the tenants are informed of the change in ownership o property.
(iv) Actual or constructive delivery: When the donee is in actual possession, he must physically depart from it with all his goods and belongings and there must be a formal entry on the part of the donee.
(v) the donor must in any case divest himself of the dominion or control over the property gifted. And if he has done everything in his power to perfect the contemplated gift by relinquishing control over it, nothing more is required.
Delivery of Possession - when not Essential
Under Muslim law, a gift is not valid unless it is accompanied by delivery of possession on the gifted property [Hayatuddin v Abdul Ghani AIR 1976 Bom. 23].
In certain situations the transfer of possession would appear to be redundant or unnecessary and hence not insisted upon by law.
(i) Gift by father to his minor / lunatic son (or daughter) or by a guardian to his ward - No transfer of possession is required in such a case, as the possession of father / guardian (on behalf of minor) is sufficient in such a case. It may be noted that when a gift is made to minor by person other than the father / guardian, the delivery of possession must be made to the father (i.e, natural guardian) and in his absence to his executor, and if neither, to the grandfather and in his absence to his executor.
(ii) Gift by husband to wife and vice Versa - No transfer of possession is required in such a case. The reason behind this rule is simple. Joint residence is an integral aspect of this relationship. The fact that the husband continues to live in the house after donation and receives the rent thereafter, will not invalidate the gift as it presumed that such act of the husband, after the gift, are on behalf of his wife and not on his own account.
(iii) Donor and donee residing in the same house which is to be gifted - where the donor and the donee both reside in the property, the physical departure or formal entry is not necessary. The donor, who is owner of the house, may complete the gift without asking the donee first to vacate the house, may complete the gift without asking the donee first to vacate the house and just after that, to take possession as a donee.
(iv) where the donee is in possession - where the donee is already in possession of the property to be gifted, delivery of possession by the donor after taking it from the donee is not necessary (e.g. case of a bailee, mortgagee or trustee). Donor’s mere declaration of having gifted it to the donee will suffice.
But if the owner of a house wishes to make a gift of it to his rent-collector, some overt act of transfer of possession is necessary; for the rent-collector is not in possession of the house, he is merely an agent and although he may have certain rights he is not in possession of the property (Mulla).
(v) Gift by one co-sharer to another
Void gifts
The following gifts cannot be validly made. They are void.
(1) Gifts to unborn person - A gift to a person not yet in existence at the time of making it is void. The reason is that donee’s acceptance is one of the essentials of validity of a gift and if the donee is not in existence his consent cannot be got. A gift to unborn person is void but life interest in favour of person not in existence is permissible provided they come in existence when such interest opens out.
(2) Gift to a dead person - is similarly void
(3) contingent gift - a gift can not be made to take effect on the happening of contingency i.e., happening or non-happening of a future uncertain event because contingency being a mere chance may or may not happen.
Thus, a gift by X to A for life and in the event of death of A without leaving male issue to B, is so far as B is concerned, a contingent gift and therefore void.
However, a conditional assignment of a life insurance policy is valid according to the insurance Act, 1938.
(4) Gift in future - A gift cannot be made of anything to be produced in future such as a gift of the crop which may be produced next year in the donor’s field. The subject matter of the gift must be actually in existence at the time of making the gift. This is so even when the production of property may be within the competence of the donor and there may be no doubt as to its coming into existence at some future time.
A gift which is only to take effect after the death of the donor and during his life time is expressly declared to be revocable by him is not a valid gift.
(5) Gift with a condition - If the donor attaches a condition to his offer, the condition is void and the gift takes effect unconditionally. Thus, the gift is valid but the condition is void.
For instance, if a house is given to A for life, and after his death to B, the legal effect of the gift is that A takes the house absolutely, and B takes nothing. Likewise, if A makes a gift of his house to B on condition that he shall not sell it or that he shall sell it to a particular individual, the condition is void, and B takes an absolute interest in the house.
IRREGULAR GIFT (MUSHAA)
Mushaa means ‘undivided share’ in a property (movable or immovable). Mushaa is therefore, a co-owned or joint property. The word Mushaa has been derived from the Arabic word ‘Saayu’ which literally means ‘confusion’. If one of the several owners of joint property makes a gift of his own share, there may be confusion as to which portion or part of the property is to be given to the donee. There may be a practical difficulty in the delivery of possession, if gift of joint property is made by a donar without partition of a gifted share. To avoid any such confusion and difficulty at the stage of delivery of possession the hanfi jurists have evolved the principal of mushaa.
The doctrine of Mushaa is applicable only to ‘gifts.’ It is not applicable to any other kind of transfer e.g. sale, exchange, etc.
Gift of an undivided share in an indivisible property (e.g. staircase) is valid.
But the gift of an undivided share in a divisible property is not valid.
In the latter case, the gift is considered ‘irregular’ (fasid).
Shia law, does not recognise the doctrine of Mushaa.
A gift may be validity made of an undivided share (Mushaa) in a property which is incapable of being divided; or where the property can be used to better advantage in an undivided condition. According to all the schools of Muslim law, a gift of Mushaa-indivisible is valid without any partition and actual delivery of possession. There are certain properties which are by nature individual. The physical partition or division of such properties is not practical. Moreover, if against the nature of such properties, their partition or division is effected at all, their identity (value or character) is lost; they do not remain the same properties which they were before the partition. For example, a bathing ghat, a stair case or a cinema house etc. are indivisible Mushaa properties.
EXCEPTION TO DOCTRINE OF MUSHAA
(i) Gift by one heir to another (‘co-heir’) - Gift of undivided property is valid even if made without partition where donor and donee are co-heirs, if they are entitled to inherit simultaneously to the properties of a deceased person. In other words, the inheritance should be from the same intestate. For example, two sons succeeding to the estate of their father are co-heirs, wife and children inheriting the property of a Muslim man, a brother and a sister, etc.
(ii) Gift to two or more persons / constructive possession - where the gift of a property, capable of division, is made to two or more persons, without dividing it or specifying their shares, gift will not be hit by mushaa if the donees, by a subsequent agreement, divide the property gifted, between them.
If the gift is by a co-sharer to another sharer and the co-sharer is in possession, the possession is deemed to be on behalf of the other.
(iii) Gift of a mushaa with stipulation that the donee shall pay certain periodical sums to someone.
(iv) Gift of a share in a land company/ gift of a share in the free hold property in a large commercial town.
(v) gift of a share in zamindari or Taluka - undivided share in a zamindari land or the land that is statutorily impartible is valid without its actual division. This exception is of little importance after the zamindari was abolished by the central government.
Doctrine of Mushaa in the present progressive society
The doctrine relating to the gifts of mushaa (restraint upon transfer) is wholly unadopted to a progressive state of society (free transfer of property) and ought to be confined within the strictest rules [Sheikh Muhammad Mumtaz Ahmad V. Zubaida jan (1889) 11 All 460]. However, in a later case, it was said that doctrine of mushaa was not opposed to justice, equity and good conscience [fakir Nyanar v. Kandasamy].
The doctrine of Mushaa originated for avoiding confusion in the simple cases of gifts of small undivided properties. In the old days, no such technical formalities were needed in making divisions of the joint properties as are required today. In the present commercially advanced society, the mushaa doctrine may operate as a restriction upon the right of a person to deal with his properties. Gifts are not trade oriented transactions; they are voluntarily and gratuitous transfers. Therefore, the gifts should be free from as much restrictions as possible. Moreover, where a constructive delivery of possession is sufficient to complete the gift, there is no need of making actual division ; a symbolic possession by the donee of the gifted share in property should should validate the gift.
In the present Indian society, the doctrine of mushaa is neither legally required nor has any practical significance. In Masoom Sab v Madan Sab (1973), the Andhra Pradesh High Court Said that a gift of Mushaa is not invalid if the donor makes a constructive delivery of possession. Therefore, there is no legal difficulties if the Mushaa doctrine is not applied to a gift of an undivided property. The devices to avoid the Mushaa rule have been favoured by the courts.
HAYATUDDIN v. ABDUL GANI (AIR 1976)
In this case, validity of the ‘gifted undivided property’ in absence of portion of the property gifted (Mushaa) was in issue. A gift of an undivided share (mushaa) in property which is capable of division is irregular and not void. The gift being irregular, and not void, it may be perfected and rendered valid by subsequent partition and delivery to the done of the share given to him. If possession is once taken the gift is validated.
The declaration is the gift deed that possession was handed over to the donee, the notices issued and intimation to the tenants orally and subsequently by notices were sufficient evidence to show that the donors have done everything that was possible in the circumstances to hand over possession.
HAMID ULLAH v. AHMAD ULLAH
In that case the property consisted of six houses and three parcels of land and the donor who was not in physical but constructive possession of the property executed a deed of gift and gift is registered. The document recited that the donor was in proprietary possession of the property and was conveying to the donee the same sort of possession which she possessed, that she had given up all proprietary rights in the subject-matter of the gift and the donee was at liberty to make transfers of the property in any way he chose. The division bench held that the gift was valid as the donor had done practically all that she was able to do in the way of divesting herself of possession and giving to the donee the same possession as she had herself.
REVOCATION OF GIFT
Hiba once validity made, is generally irrevocable. Before the delivery of possession, the gift is not complete and the donor has unrestricted right to revoke it. After the delivery of possession, the donor has a right to revoke the gift either with the consent of the donee.
However, the following gifts are absolutely irrevocable - when the donor/ donee related by blood or marital relation, when the gifted property is sold or gifted or is lost, destroyed or changed, when the gifted property is sold or gifted or is lost, destroyed or changed, when the gift is sadaqah, or when anything has been accepted in return.
DISTINCTION BETWEEN GIFT AND WILL
Gratuitous transfer of ownership in a property may be made in two ways.—
First - the transfer may be made inter vivos i.e., between living persons, which is called ‘gift.’
Secondly - the transfer may be made testamentary, which is called ‘will.’ Thus, in so far as the legal concept of wills is concerned, essentially, it is a ‘gift testamentary.’
The two differ in many respect —
(i) Gift is an immediate transfer of right or interest; will is a transfer of right to take effect after the death of the testator.
(ii) In a gift transaction, delivery of possession is necessary; in a will it is not required.
(iii) The subject of gift must be in existence at the time of gift; in case of a will, it is sufficient if the subject exists at the time of testator’s death.
(iv) right of donor to a gift is unrestricted. The right of making a bequest is limited (one-third of net wealth, consent of heirs required).
(v) After completion a gift cannot be revoked unless by a formal decree of a court; a will may be revoked at any time after making of it.