Dear Mr Behera
Gift is a generic term that includes all transfers of property without consideration. In India, Gift is considered equivalent to Hiba but technically, Gift has a much wider scope than Hiba. The word Hiba literally means, the donation of a thing from which the donee may derive a benefit. It must be immediate and complete. The most essential element of Hiba is the declaration, "I have given".
As per Hedaya, Hiba is defined technically as, "unconditional transfer of property, made immediately and without any exchange or consideration, by one person to another and accepted by or on behalf of the latter".
According to Fyzee, Hiba is the immediate and unqualified transfer of the corpus of the property without any return.
The gift of the corpus of a thing is called Hiba and the gift of only the usufructs of a property is called Ariya.
Essential Elements of a Gift
Since muslim law views the law of Gift as a part of law of contract, there must be an offer (izab), an acceptance (qabul), and transfer (qabza). In Smt Hussenabi vs Husensab Hasan AIR 1989 Kar, a grandfather made an offer of gift to his grandchildren. He also accepted the offer on behalf of minor grandchildren. However, no express of implied acceptance was made by a major grandson. Karnataka HC held that since the three elements of the gift were not present in the case of the major grandchild, the gift was not valid. It was valid in regards to the minor grandchildren.
Thus, the following are the essentials of a valid gift -
1. A declaration by the donor - There must be a clear and unambiguous intention of the donor to make a gift.
2. Acceptance by the donee - A gift is void if the donee has not given his acceptance. Legal guardian may accept on behalf of a minor.
3. Delivery of possession by the donor and taking of the possession by the donee. In Muslim law the term possession means only such possession as the nature of the subject is capable of. Thus, the real test of the delivery of possession is to see who - whether the donor or the donee - reaps the benefits of the property. If the donor is reaping the benefit then the delivery is not done and the gift is invalid.
The following are the conditions which must be satisfied for a valid gift.
1. Parties - There must be two parties to a gift transaction - the donor and the donee.
Conditions for Donor - (Who can give)
1. Must have attained the age of majority - Governed by Indian Majority Act 1875.
2. Must be of sound mind and have understanding of the transaction.
3. Must be free of any fraudulent or coercive advice as well as undue influence.
4. Must have ownership over the property to be transfered by way of gift.
A gift by a married woman is valid and is subjected to same legal rules and consequences. A gift by a pardanashin woman is also valid but in case of a dispute the burden of proof that the transaction was not conducted by coercion or undue influence is on the donee.
A person in insolvent circumstances is valid provided that it is bona fide and not merely intended to defraud the creditors.
Conditions for Donee (who can receive)
1. Any person capable of holding property, which includes a juristic person, may be the donee of a gift. A muslim may also make a lawful gift to a non-muslim.
2. Donee must be in existence at the time of giving the gift. In case of a minor or lunatic, the possession must be given to the legal guardian otherwise the gift is void.
3. Gift to an unborn person is void. However, gift of future usufructs to an unborn person is valid provided that the donee is in being when the interest opens out for heirs.
2. Conditions for Gift (What can be gifted) -
1. It must be designable under the term mal.
2. It must be in existence as the time when the gift is made. Thus, gift of anything that is to be made in future is void.
3. The donor must possess the gift. Muslim law recognizes the difference between the corpus and the usufructs of a property. Corpus, or Ayn, means the absolute right of ownership of the property which is heritable and is unlimited in point of time, while, usufructs, or Manafi, means the right to use and enjoy the property. It is limited and is not heritable. The gift of the corpus of a thing is called Hiba and the gift of only the usufructs of a property is called Ariya. In Nawazish Ali Khan vs Ali Raza Khan AIR 1984, it was held that gift of usufructs is valid in Muslim law and that the gift of corpus is subject to any such limitations imposed due to usufructs being gifted to someone else. It further held that gift of life interest is valid and it doesn't automatically enlarge into gift of corpus. This ruling is applicable to both Shia and Sunni.
