As a matter of fact, any property (mal) over which ownership may be exercised, may be transferred through a gift. Gift is a transfer of ownership (absolute interest) of the property, therefore, the donor must own it at the time of the declaration.
Once it is established that a person owns a property and he has right to transfer it, he can make a gift of that property whether movable or immovable. Tangible as well as intangible property may be the subject-matter of a gift. Gift of certain specific kinds of properties is discussed below.
Gift of Future Property:
Gift of a future property is void. The property, which is the subject-matter of a gift, must be in existence at the time of the declaration. Through a gift, the donor transfers the legal control or ownership in a property. For ownership the existence of the property is necessary; there is no ownership without any property.
Therefore, if the property does not exist, the ownership also cannot exist and if ownership does not exist, what is to be transferred? Therefore, the gift of a property which is not in existence at the time of declaration, though it may come into existence on a future date, is unlawful. Fatwai Alamgiri, provides thus:
“The thing itself must be in existence at the time of the gift, so that if one should give the fruit that may be produced by his palm-tree this year or what is in the womb of his sheep or in the udder, the gift is unlawful though power be given to take possession at the time of production…, so also as to the butter in milk, the oil in seasame or the flour in wheat with similar powers.”
Gift of Spes-Successionis:
Gift of the Spes Successionis is also void. Spes Successionis means a mere expectation of getting certain properties through succession. A son after the death of his father inherits his properties as legal heir and such properties are vested in him. But, before the death of father, the son has simply a chance or expectation of getting his property through inheritance because he may or may not survive his father.
Therefore, during the life of his father, the son’s interest in father’s property is merely a future possible interest, i.e. spes-successionis. As such, this future property cannot be the subject-matter of a gift. Similarly, a property given under a will is the future possible interest of the legatee. The property vests in the legatee only after the death of legator provided such legatee himself is alive at the death of legator and the will is not revoked.
The gift of a property by a legatee given to him under a will is also a gift of spes- successionis and as such void. Moreover, Spes Successionis is a non-transferable property under Section 6 of the Transfer of Property Act, 1882. Any transfer, including gift of any non-transferable property is void.
Gift of Actionable Claims: Intangible Properties:
Actionable Claim is an intangible property. Intangible or incorporeal property has no physical existence but it may be owned by a person. As such, its owner may transfer it through a gift. Under Section 3 of the Transfer of Property Act an ‘actionable claim’ has been defined as: (a) an unsecured debt, or (b) any interest in a movable property, not in possession of the claimant.
Thus, if A has given certain money to Â on loan, and the loan has not been secured by any kind of S’s property, then A has a right to claim the money by maintaining an action in a court of law against B. A’s ‘right to claim the money’ from Â is A’s actionable claim which is his property and he may lawfully make a gift of this right.
In other words, A can gift this right to X, the donee, in which case X would be entitled to get the money from B. Further, the right of A to claim his movable property e.g. motorcar which is in the possession of another person, is also his actionable claim and this ‘claim’ may also be gifted by him. Actionable claim’ is regarded as incorporeal movable property.
Any other beneficial interest which is owned by a person may also be the subject- matter of gift. Where the beneficial interest exists in an immovable property, the interest is intangible immovable property. Thus, right to collect rents is incorporeal property, and a gift of this right is lawful.
Similarly, gift of a Government Promissory Note or of the Zamindari Rights, held under Government is valid. In the same manner, a right to receive specific share of the offerings made by the pilgrims at a shrine, may also be a subject-matter of gift.
It may be noted that in the case of a gift of the ‘right to receive’ the offerings, the subject-matter is the ‘right to receive’ and not the offerings which are to be made in future. Therefore, gift of a right to receive the offerings is not a gift of future property; it is a gift of the present beneficial interest and is transferable through a gift.
In brief, it may be stated that all forms of actionable claims and also the beneficial rights in the movable and immovable properties may be the subject-matter of a gift. But, such rights or interests must be vested in the donor at the time when the gift is made.
Actionable claims and other incorporeal properties cannot be possessed; therefore, actual delivery of possession is neither possible nor required under the law. The gift may be completed merely by establishing the fact that the donor has a bona fide intention to give, and that he has done everything which was necessary to give possession to the donee.
However, a gift of an actionable claim may be made only according to the provisions of the Transfer of Property Act, 1882, because transfer of actionable claims has been separately dealt with (Ch. VIII of the Act) and the contrary rules, if any, of the Muslim law are not applicable on the transfer of actionable claims even if the transferor is a Muslim. Accordingly, where a Muslim gifts away an actionable claim, it is not valid unless it is in writing and is duly signed by him.
Gift of Equity of Redemption:
Gift of an ‘equity of redemption’ is valid. When a person (mortgagor) takes some loan from the other (mortgagee) by securing his immovable property, he has an equitable right to redeem (take back) his property after paying the loan.
Mortgagors this right is called his ‘equity of redemption’. Equity of redemption is mortgagor’s beneficial interest (intangible properly) and is owned by him. A mortgagor can make a gift of his ‘right of redemption’. Where a gift of the equity of redemption is made, the donee becomes entitled to redeem the mortgage from the mortgagee after satisfying the debt.
In the simple mortgage the possession remains with the mortgagor, therefore, there is no difficulty in completing the gift by delivery of possession. In such cages the donee satisfies the debt and mortgagor i.e. the debtor (donor) gives the possession.
But, in the usufructuary mortgage, the possession is already with the mortgagee. Therefore, the donor of the equity of redemption (i.e. mortgagor) cannot transfer the possession to donee. Accordingly, the Allahabad, Patna, Madhya Pradesh and Calcutta High Courts have held that in a usufructuary mortgage, the gift of ‘equity of redemption’ is valid without any formal delivery of possession.
In Fatima Bi v. Bhavsa Maracous, the usufructuary mortgagor made the gift of his equity of redemption in favour of his wife. Physical possession was not given to her as it was not possible in the circumstances; it was held by the court that although delivery of possession is necessary condition for a valid Hiba yet, since the mortgage was usufructuary (the property was in possession of mortgagee) the delivery of possession is not possible. Therefore, gift may be completed by any overt act of the donor which is sufficient to entitle the donee to take possession. Accordingly, the gift of equity of redemption was, held valid.
Gift of Insurance Policy:
Gift of Insurance Policy is valid. The policy-holder, whether he is Muslim or non- Muslim, has an interest in the sum insured. The policy-holder owns this interest. However, this interest is his contingent interest. As gift of contingent interest is void under Muslim law, the gift of insurance policy cannot be made by a Muslim policyholder under Muslim law. But, under Section 38 of the Insurance Act, 1938, gift (assignment) of insurance policy is lawful.
In Sadiq Ali v. Zahida Begam the Allahabad High Court held that the expression, “any law or custom having the force of law to the contrary”, in Section 38(7) of the Insurance Act, 1938, are wide enough to exclude the contrary rules of Muslim law on gifts. The result is that where a Muslim makes a gift of his insurance policy the gift is valid because the Insurance Act, 1938, would be applicable and not the contrary rules of the Muslim personal law.
Gift of Dower (Mahr):
Gift of dower by a Muslim wife in favour of her husband is valid. This is called as Hiba-e-Mahr i.e. gift of dower. But, wife can make the gift of her dower only in favour of her husband. Dower (Mahr) is a debt which is due to the wife against her husband.
Right to claim a debt is an actionable claim, therefore, wife’s ‘right to dower’ is her actionable claim and as such it may be a subject-matter of Hiba. It may be noted that dower is a personal right of the wife and personal obligation of the husband. Therefore, it can neither be transferred by any person except wife nor can be transferred to any person other than husband. Gift of dower to any person other than husband is void.
Under Muslim law, provision has been made that wife may remit the claim of her dower in favour of her husband. In the language of law, remission of dower by a wife is a gift of her dower in favour of the husband. However, in a gift of dower following two rules are significant:
(i) The wife may make the gift of her dower to husband either unconditionally or subject to some conditions. If the gift to husband is subject to conditions, the gift to husband is revoked upon non-fulfilment of that condition.
(ii) A gift of dower to a dead husband is also valid. It operates to extinguish the right of the widow to claim the Mahr.”
The gift of dower is a gift of an actionable claim, therefore, it is submitted that such gift must be made in writing. It cannot be affected orally. However, registration is not necessary.
Gift of ‘Services’:
The subject-matter of gift must be some property whether tangible or intangible. Services or the natural love and affection are not properties; therefore, they cannot be the subject-matter of a Hiba. Gift of services or that of love and affection is no gift at all.