At the first two stages namely, the declaration and acceptance; the gift is simply a contract for the transfer of property. The gift is not complete before the delivery of possession. Without actual or constructive delivery of possession there is no gift at all; it is merely a promise.
Revocation before Delivery of Possession:
Under Muslim law, a gift may be revoked by the donor at any time before delivery of possession. A mere declaration by the donor that he has revoked the gift is sufficient. In Riazan Khatun v. Sadrul A lam, the Patna High Court has held that since gift itself is not deemed to be complete before delivery of possession, therefore, the donor may cancel or revoke the gift any time before delivery of possession.
After the revocation, the donee is not entitled to get any compensation because for the breach of a gratuitous promise the donor is not liable. However, only donor is entitled to revoke the gift. If the donor dies before delivery of possession his heirs have no right to revoke the gift.
Revocation after Delivery of Possession:
After delivery of possession, the gift cannot be revoked by donor through declaration. But, gift may be invalidated by the decree of a court of law even after the delivery of possession. The court may invalidate the gift on the ground of mistake of fact or, that the consent was not free or, on any other sufficient cause. Thus, after the delivery of possession, a gift cannot be revoked except by the decree of a court of law.
Until a decree invalidating the gift is passed, the gift stands and the donee is entitled to enjoy the property as owner including the right of transferring the property. But, if the gift is of irrevocable nature, it cannot be revoked even by the court. Muslim law recognises certain situations in which a gift is irrevocable.
Under the Shia law, even after the delivery of possession, a gift may be revoked by the donor merely by declaration; decree of a court of law is not necessary. But, under the Shia law too, if the gift is irrevocable, it cannot be revoked after the delivery of possession even by the court.