Unit 6:- Gifts, Exchanges and Easement Act

   6.1 Provisions of Gifts (Section 122 to 129)

  6.2 Provisions of Exchanges (Sections 118 to 128) 

  6.3 Relevant Provisions of Easement Act

 

Unit 6: Gifts, Exchanges, and Easement Act

6.1 Provisions of Gifts (Sections 122 to 129)

Introduction & Definition

A Gift is the transfer of property made voluntarily and without consideration (money). Unlike a Sale, which is a contract of commerce, a Gift is a contract of affection.

Definition (Section 122): “Gift is the transfer of certain existing movable or immovable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee.”

Statutory Provisions

  • Section 122: Definition and Acceptance.
  • Section 123: How transfer is effected (Registration).
  • Section 126: Suspension and Revocation.
  • Section 127: Onerous Gifts.
  • Section 128: Universal Donee.

Essential Ingredients

  1. Parties: Donor (must be competent) and Donee (can be a minor).
  2. Voluntary: Must be free consent, not obtained by force or fraud.
  3. No Consideration: There must be no exchange of money or benefit. If there is, it becomes a Sale or Exchange.
  4. Existing Property: Gift must be of existing property, not future property. A gift of “future property” is void.
  5. Acceptance: The Donee must accept the gift during the lifetime of the Donor and while he is still capable of giving. If the Donee dies before acceptance, the gift is void.
  6. Registration (Sec 123):
    • Immovable: Must be by a registered instrument signed by the donor and attested by 2 witnesses.
    • Movable: Can be by registered instrument OR by delivery of possession.

Key Concepts

  • Onerous Gift (Section 127): A gift that comes with a burden (debt/liability).
    • Rule: “Benefit and Burden go together.” The Donee cannot accept the good part and reject the bad part of the same transaction. They must accept the whole gift or nothing.
  • Universal Donee (Section 128): A person who receives the entire property of the donor.
    • Liability: Such a donee is personally liable for all the debts of the donor strictly to the extent of the property received.

Landmark Case Laws

  1. Tila Bewa v. Mana Bewa (1962)
  • Issue: Validity of acceptance.
  • Judgment: The Court held that acceptance can be implied. The mere possession of the gift deed and the property by the Donee is sufficient evidence of acceptance.
  1. K. Balakrishnan v. K. Kamalam (2004)
  • Issue: Gift to a minor without delivery of possession.
  • Judgment: The SC held that a gift to a minor is valid if accepted by their guardian. Strict delivery of possession is not required if the guardian (usually the parent) accepts on their behalf.

Legal Exceptions (Section 129)

The TPA provisions on Gifts do not apply to:

  1. Mohammedan Law (Hiba): Gifts by Muslims are governed by their personal law (oral gifts are valid).
  2. Donatio Mortis Causa: Gifts made in contemplation of death (deathbed gifts) are governed by the Indian Succession Act.

6.2 Provisions of Exchanges (Sections 118 to 121)

Introduction & Definition

Exchange is the legal term for “Barter.” It is the mutual transfer of ownership of one thing for the ownership of another, neither thing (or both things) being money only.

Statutory Provisions

  • Section 118: Definition.
  • Section 119: Right of party deprived of thing received in exchange.
  • Section 120: Rights and liabilities of parties.

Essential Ingredients

  1. Transfer of Ownership: Unlike a lease (possession), exchange transfers absolute ownership.
  2. Mutual Transfer: A transfers Property X to B; B transfers Property Y to A.
  3. Not Money Only: If A gives Property X and B gives only Money, it is a Sale. Exchange must involve property-for-property (or property-for-property + money to equalize).

Rights and Liabilities (Section 120)

  • Each party has the rights and is subject to the liabilities of a Seller as to that which he gives, and that of a Buyer as to that which he takes. (Same as Section 55).

Landmark Case Law

  1. Commissioner of Income Tax v. Motor & General Stores (1967)
  • Facts: A company transferred a cinema house to another in exchange for shares.
  • Issue: Was this a Sale or an Exchange?
  • Judgment: The SC held it was an Exchange because “shares” are property, not money. Since no price was paid in money, it was not a sale.

6.3 Relevant Provisions of Easement Act (1882)

Introduction & Definition

An Easement is a right to use someone else’s land for the beneficial enjoyment of your own land.

  • Example: Right of Way. If A cannot reach the main road without crossing B’s land, A has an easement over B’s land.

Key Terms (Section 4)

  • Dominant Heritage: The land for whose benefit the right exists (A’s land).
  • Dominant Owner: The owner of A’s land.
  • Servient Heritage: The land on which the burden is imposed (B’s land).
  • Servient Owner: The owner of B’s land.

Essentials of Easement

  1. Two Distinct Properties: There must be a Dominant and a Servient heritage.
  2. Separate Owners: You cannot have an easement over your own land.
  3. Beneficial Enjoyment: The right must improve the utility/enjoyment of the dominant land.
  4. Positive or Negative:
    • Positive: Right to do something (e.g., walk over B’s land).
    • Negative: Right to prevent B from doing something (e.g., Right to Light – preventing B from building a wall that blocks light).

Modes of Acquisition (Creation of Easement)

  1. Easement by Grant: Created by an express agreement/deed between the parties.
  2. Easement of Necessity (Section 13):
  • Arises when property is severed (divided) and one part cannot be used without an easement over the other.
  • Example: A sells a plot of land to B in the middle of his field. B has a right of way over A’s field by necessity.
  1. Easement by Prescription (Section 15) – Most Important
  • Definition: Acquiring a right by long, continuous use.
  • Requirements:
    • Peaceable: Without force or violence.
    • Open: With the knowledge of the owner (not secret).
    • As of Right: Used as if it were a right, not by permission/license.
    • Without Interruption: Continuous use.
    • Duration: For 20 years (against private individuals) or 30 years (against Government).

Extinction of Easements (Section 37-47)

An easement ends if:

  • The Dominant owner releases it (Release).
  • The same person becomes the owner of both Dominant and Servient lands (Unity of Ownership).
  • The necessity ends (e.g., a new public road is built next to B’s land).
  • The property is destroyed.

Comparison: Easement vs. License (Section 52)

Feature

Easement (Sec 4)

License (Sec 52)

Nature

Interest in land (Right in Rem).

Personal right (Right in Personam).

Connection

Attached to the land (runs with the land).

Attached to the person (personal permission).

Transfer

Automatically transfers when land is sold.

Generally not transferable.

Revocation

Difficult to revoke (requires legal grounds).

Revocable at the will of the grantor.

Example

Right of Way (Permanent).

Ticket to watch a movie (Temporary).

Exam-Style Conclusion

The Easement Act balances property rights. While ownership usually means “exclusive” right to enjoy land, Easements are a necessary exception that allows neighbors to coexist. The law recognizes that land is useless if one cannot access it (Necessity) or if one has relied on a certain use for decades (Prescription).

 

PreviousNext