A. Relevant Sections:

1. Section 10 of Transfer of Property Act, 1882 (T.P. Act), “Condition restraining alienation” where the property is transferred subject to a condition or limitation absolutely restraining the transferee or any person claiming under him from parting with or disposing of his interest in the property, the condition or limitation is void, except in the case of a lease where the condition is for the benefit of the lessor or those claiming under him:

Provided that property may be transferred to or for the benefit of a woman (not being a Hindu, Muhammadan or Buddhist) so that she shall not have power during her marriage to transfer or charge the same or her beneficial interest

2. Section 13 of P. Act, “Transfer for benefit of unborn person” where,on a transfer of property, an interest therein is created for the benefit of a person not in existence at the date of the transfer,subject to a prior interest created by the same transfer, the interest created for the benefit of such person shall not take effect, unless it extends to the whole of the remaining interest of the transfer or in the property.

Illustration

A transfer’s property of which he is the owner to B in trust for A and his intended wife successively for their lives, and, after the death of the survivor for the eldest son of the intended marriage for life, and after his death for A’s second son. The interest so created for the benefit of the eldest son does not take effect because it does not extend to the whole of A’s remaining interest in the property.

3. Section 20 of P. Act’ “when an unborn person acquires vested interest on transfer for his benefit” where, on a transfer of property, an interest therein is created for the benefit of a person not then living, he acquires upon his birth, unless a contrary intention appears from the terms of the transfer, a vested interest, although he may not be entitled to the enjoyment thereof immediately on his birth.

4. Section 126 of P. Act, “When gift may be suspended or revoked” the donor and donee may agree that on the happening of any specified event which does not depend on the will of the donor a gift shall be suspended or revoked; but a gift which the parties agree shall be revocable wholly or in part at the mere well of the donor is void wholly or in part, as the case may be.

A gift also is revoked in any of the cases (save want or failure of consideration) in which, if it were a contract, it might be rescinded.

 Save as aforesaid, a gift cannot be revoked.

Nothing contained in this section shall be deemed to affect the rights of transferees for consideration without notice.

Illustrations

a. A gives a field to B, reserving to himself, with B’s assent, the right to take back the field in case B and his descendants dies before A. B dies without descendants in A’s lifetime. A may take back the field.

b. A gives a lakh of rupees to B, reserving to himself, with B’s assent, the right to take back at pleasure Rs. 10,000 out of the lakh. The gift holds good as to Rs. 90,000, but is void as to Rs. 10,000, which continue to belong to A.               

B. Examination of relevant Sections:

1. Section 10 of the T.P. Act, expressly provides that where the property is transferred subject to a condition or limitation absolutely restraining the transferee or any person claiming under him from parting with or disposing of his interest in the property, the condition or limitation is void.

2. Any condition restraining the transferee the right of alienation is void, including gift.

3. The law of conditions about the transfer of property is contained in Chapter 2 of the T.P. Act. Any condition, therefore, imposed upon a donee cannot be valid if it is in consonant with the provisions of Section 10 of the Act. The Court must give full effect to every Section of an enactment. Section 10 embodies the general principle that a transfer of immovable property may not impose a condition restraining the transferee from alienating the interest conveyed to him absolutely except in the case of a lease where the condition is for the benefit of the lessor. This general provision applies to all transfers including gifts. Apart from the condition restraining alienation by a lessee, there is no other exception. Therefore, Section 126 is not an absolute exception to Section 10, “re. Smt. Brij Devi vs. Shiva Nanda Prasad and others, AIR 1939 Allahabad 221”.

4. The condition which is specifically prohibited under Section 10 of Act, 1882 is applicable to gift, Prem Kali vs. Deputy Director of Consolidation, Sitapur and others, 2016(116) ALR 794”.

5. The condition put on person unborn is entirely different from execution of gift deed in favour of a person who is not born, if the gift was in favour of the living person, section 13 of Act, has no application., There is no ban on the transfer of an interest in favour of an unborn person. Section 20 permits an interest being created for the benefit of an unborn person who acquires interest upon his birth. No provision has stipulated that full interest in a property cannot be created in favour of an unborn person.“CIVIL APPEAL NO. 1209 OF 2020”.

Conclusion

The gift is no exception to specific prohibition provided under section 10 of the Act, Condition restraining alienation the transferee or any person claiming under him from parting with or disposing of his interest in the property, the condition or limitation is void, except in the case of a lease.The gift may be conditional but the condition, which has been specifically prohibited under Section 10 of Act, 1882 is also applicable to gift.

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Name: AkhilesH
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