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Gift of property need not be handed over

The Supreme Court has resolved an apparent conflict of views in its earlier judgments regarding the validity of gifts and stated that a gift of property would not be invalid if the possession is retained by the donor. "There is no provision in law that ownership in property cannot be gifted without transfer of possession of such property," the judgment said and added that possession of the gifted property is not essential for validity of a gift. In this case, Renikuntla Rajamma vs K Sawranamma, the donor retained the right to use the property during her lifetime. She also received rents. It was contended that since she retained the use of property the gift was invalid. Inasmuch as the gift deed failed to transfer title, possession and the right to deal with the property in absolute terms in favour of the donee the same was no gift in the eyes of law, it was contended. Rejecting the argument, the Supreme Court discussed Sections 122 and 123 of the Transfer of Property Act and stated that the retention of benefit did not affect the transfer of ownership in favour of the donee by the donor.

Article referred; http://www.business-standard.com/article/opinion/gift-of-property-need-not-be-handed-over-114072700714_1.html

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