Report No. 70
107.11. Registration Act, section 49.-
Section 49 of the Registration Act should also be considered. It reads-
"49. No document required by section 17 or by any provision of the Transfer of Property Act, 1882, to be registered shall-
(a) affect any immovable property comprised therein, or
(b) confer any power to adopt, or
(c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered:
Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882, to be registered, may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877, or as evidence of part performance of a contract for the purposes of section 53A of the Transfer of Property Act, 1882, or as evidence of any collateral transaction not required to be effected by registered instrument."
This will require consequential amendment by adding in the proviso a saving for the newly added section as to unregistered deeds of gift.1
1. To be carried out under section 49, Registration Act.
107.12. Section 124.-
Section 124 provides that a gift comprising both existing and future property is void as to the latter. Even apart from the section, future property cannot be transferred. Thus, future income cannot be transferred before its accrual.1 These points do not, of course, require any change in the section.
1. Bindraban Behari v. Oudh Behari, AIR 1947 All 179 (180).
107.13. Section 125.-
According to section 125, a gift of a thing to two or more donees, of whom one does not accept it, is void as to the interest which he would have taken, had he accepted. We have no comments on this section.
107.14. Section 126-When the gift may be suspended or revoked.-
According to section 126, first paragraph, the donor and the donee may agree that on the happening of any specified event which does not depend on the will of the donor a gift shall be suspended or revoked; but a gift which the parties agree shall be revocable wholly or in part at the mere will of the donor is void wholly or in part, as the case may be.
It further provides in the second paragraph-
"A gift may also be revoked in any of the cases (save want or failure of consideration) in which, if it were a contract, it might be rescinded".
The third paragraph provides-
"Save as aforesaid, a gift cannot be revoked." Finally the section provides-
"Nothing contained in this section shall be deemed to affect the rights of transferees for consideration without notice".
There are two illustrations to the section, which we are not quoting. The essence of the first paragraph is the agreement to revoke. The essence of the second paragraph, on the other hand, is the defect vitiating the agreement that was reflected in the gift.
The first paragraph is illustrated by conditional assignments of insurance policies-condition on the donee surviving the donor1-a matter now governed by section 38(7), Insurance Act, 1938.
The second paragraph is illustrated by cases in which there are allegations that the donor was subjected to undue influence or that other circumstances leading to a flaw in consent existed.
1. Khyrunnissa (in re:), AIR 1955 Mad 450 (460).
107.15. Section 126-third paragraph-Recommendation as to nonregistration.-
The first two paragraphs of section need no change.
As to the third paragraph, it has now been judicially established1 that a gift cannot, after acceptance, be revoked, except on the grounds specified in the section, and that this bar against revocation applies even if the deed of gift has not yet been registered.2
In other words, the fact that the deed has not yet been registered, does not entitle the donor to revoke it,3-4 where there are no valid grounds for revocation. The crucial moment seems to be the moment of acceptance of the gift,5 in the sense that a gift can always be revoked before acceptance, but cannot be revoked thereafter, except in the specified situation.
In Roman law, it was established that a donation is never perfect until it has been accepted.6 A gift between living persons-donation inter vivos-was described as a transaction by which transfer takes place by the mutual consent of the giver, who divests himself of the thing given in order to transfer title to the donee and the donee who accepts and acquires the legal title to it. Acceptance is necessary, because there must be the mutual consent and concurrent will of both parties.
To put the matter in the form of propositions-
(a) A gift can be revoked before acceptance. In fact, before acceptance, there is no effective gift7 The word "revoked" has to be used here only for convenience.
(b) A gift cannot be revoked after acceptance,8 except in the specified circumstances, mentioned in the first two paragraphs of section 126.
(c) The fact that the deed of gift has been registered does not, in itself, affect the operation9 of proposition (a).
(d) The fact that the deed of gift has not been registered does not10 in itself, affect the operation of proposition (b).
In order to incorporate the true position, as stated in propositions (b) and (d) above, we recommend that section 126, third paragraph, should, in the interests of accuracy and clarify, be revised as follows:
"Save as aforesaid, as gift cannot be revoked after its acceptance by or on behalf of the donee, whether or not the instrument affecting the transfer for making the gift has been registered."
We should add that Shri Sen-Verma has a reservation as to this recommendation.
1. Kalyanasundaram v. Karuppa, AIR 1927 PC 42.
2. For earlier views, see case law discussed in Atmaram v. Vaman, AIR 1925 Born 210 (FB).
3. Union Bank v. Ram Rati, AIR 1954 All 594 (Randhir Singh, J.).
4. Atma Ram v. Waman, AIR 1925 Born 210 (FB) (Majority view).
5. Venkatasubbamma v. Narayan Swami, AIR 1954 Mad 215 (217), para. 7 (Satyanarayan Rao, J.).
6. Bouvier Law Dictionary, (1914), Vol. I, p. 924.
7. Section 122.
8. Section 126, third para.
9. Section 126, first two paragraphs, as interpreted judicially-see Venkatasubbamma v. Narayanaswami, AIR 1954 Mad 215 (217), para. 7.
10. See case law, supra, and Papathi v. Doraiswami, AIR 1939 Mad 290.
107.16. Section 127-Onerous gifts.-
Onerous gifts are dealt with in section 127, which reads-
"127. Where a gift is in the form of a single transfer to the same person of several things of which one is, and the others are not, burdened by an obligation, the donee can take nothing by the gift unless he accepts it fully.
Where a gift is in the form of two or more separate and independent transfers to the same person of several things, the donee is at liberty to accept one of them and refuse the others, although the former may be beneficial and the latter onerous.
A donee not competent to contract and accepting property burdened by any obligation is not bound by his acceptance. But if, after becoming competent to contract and being aware of the obligations, he retains the property given, he becomes so bound."
There are two illustrations to the section-
"(a) A has shares in X, a prosperous joint stock company, and also shares in Y, a joint stock company in difficulties. Heavy calls are expected in respect of the shares in Y. A gives B all or his shares in joint stock companies. B refuses to accept the shares in Y. He cannot take the shares in X.
(b) A, having a lease for a term of years of a house at a rent which he and his representatives are bound to pay during the term, and which is more than the house can be let for, gives to B the lease, and also, as a separate and independent transaction, a sum of money. B refuses to accept the lease, he does not by this refusal forfeit the money."
The section needs no change.
107.17. Section 12.-
Universal Donee. Section 128 deals with a universal donee, in these terms:
"128. Subject to the provisions of section 127, where a gift consists of the donor's whole property, the donee is personally liable for all the debts due by, and liabilities of, the donor at the time of the gift, to the extent of the property comprised therein."
The principal object of this section is to do justice to the creditors of the donor. The section is based on the principle that a man ought to be just before he is generous. If he is only generous, for getting this maxim, the law will see to it that no injustice is caused to the creditors.
The ordinary principle is that-(i) liabilities are not transferable unless the person in whose favour the liabilities exist, agrees, and that (ii) they are not transferable unless the transferee of the liability agrees. Section 128 modifies the second proposition in the case of a universal donee. In a sense, the section follows the maxim of equity, qui sentit commodum sen tire debet et onus (he who derives the advantage ought to sustain the burden).
107.19. Roman law.-
The section reminds us of the doctrines of Roman law. The Roman law recognised many forms of universal succession under which the whole of a man's property, whether consisting of rights in rem or rights in personam or of both combined, passed to another; and with the property or assets (bona activa) passed also the liabilities (bona passiva)1. In Civil Law, a "universal legacy" was a testamentary disposition by which the testator gives to one or several persons the whole of the property which he leaves at his decease.2
Then, there was the concept of "universal succession". "A succession to a universities juris. It occurs when one man is vested with the legal clothing of another, becoming at the same moment subject to all his liabilities and entitled to all his rights."3
1. Holland Jurisprudence, 6th Edn., p. 142.
2. Louisiana Civil Code, Article 1606; Bouvier Law Dictionary, (1914), Vol. 2, p. 3375.
3. Maine Ancient Law, p. 179.
107.20. No change.- These points do not, of course, require any change in the section.