Is it possible for parents to take back gifted property from their children?

By Abhay Shah, Realty Quarter

The donor cannot revoke a gift of a property that is valid and accepted by a donee, other than in specific circumstances. We look at the feasible instances of a revocation.

With many children choosing to leave India for work and the gradual disappearance of the common family system, it may be difficult to meet ends by parents with limited means if their children don’t support them. Often, because of multiple factors, many parents also pass their properties to their children. The pledge that the transferee will take care of them is not always achieved once the property is gifted to their children. Parents are placed in a very challenging position in such circumstances.

What are the solutions for parents who, after their property has been transferred, face negligence from their children?? Can they take back their property from such children’s? The Bombay High Court recently had an opportunity to address a similar situation.

The Case:

When a Mumbai-based widowed father wanted to get remarried, the son insisted and took the father half of the rights in the father’s property in order to protect his interest in the property. The father and stepmother experienced troubles from the son and the daughter-in-law after half of the share in the estate were transferred. The son and daughter-in-law were ready to support the father, but not the stepmother, which the father did not accept. The father, therefore, wanted to cancel the gift of half of the property, made in favour of his son. Therefore, he approached the court designated under the provisions of ‘The Maintenance and Welfare of Parents and Senior Citizens Act, 2007’.

Legal laws regulating the gift of property:

The Indian Contract Act, 1872 governs gifts. The law provides that any gift that the donee accepts is final and can not be subsequently withdrawn. Therefore, if all the conditions of a valid gift are present, the same cannot be subsequently annulled by the donor, except on the basis that the donor’s approval was acquired through fraud, undue influence or coercion. The Supreme Court has ruled many occasions that, under any conditions, a gift once validly produced could not be revoked subsequently.

‘The Maintenance and Welfare of Parents and Senior Citizens Act, 2007’ (The Maintenance Act), which provides for the circumstances under which gifts of the estate made by parents and senior citizens can be cancelled, has been passed by central government to ensure the proper handling of parents and senior citizens by their children or legal heirs. Section 23 of The Maintenance Act contains these clauses and it reads as below:

‘Where a senior citizen who has transferred his estate by manner of a gift after the implementation of this Act, subject to the condition that the transferee provides the fundamental facilities and basic physical needs to the transferor and the transferee declines or fails to provide such facilities and physical needs, the transaction shall be considered to have taken place by fraud or coercion or under undue influence and shall, at the option of the transferor, be declared void by the court.

Since Section 23 of the Maintenance Act specifically offers that where the estate has been gifted on the knowledge that the transferee child / legal heir offers the fundamental requirements and keeps the senior citizen or parent, any inability on the portion of the child to honour such commitment is a fraud. Under these conditions, the transfer agreement is considered to have been acquired by fraud and may be voided by the aggrieved parent / senior citizen.

Since the provisions of the 2007 Law on the Maintenance and Welfare of Parents and Senior Citizens override the provisions of any other law in force in India, Section 23 will prevail and, in such cases, the gifts/transfers of property made after the Maintenance Act comes into force will become voidable at the transferee option.  However, if the estate had been transferred before the Maintenance Act went into effect, getting the estate back from their kids would be hard for the parents.

Court’s Judgement on a case of a father demanding half property back from his son who treated him inappropriately.

The tribunal, before which the father had brought the case to cancel the gift of half of the estate, proclaimed the gift of the 50% share of the estate to be invalid and reclaimed the father’s ownership of the entire estate. Aggrieved by the tribunal’s judgment, the son preferred an appeal to the Bombay High Court. The choice to withdraw the gift provided by the father was maintained by a division bench of justices Ranjit More and Anuja Prabhudesai. The tribunal also noted that since the father produced the gift of half of the share of the estate at his son’s request, it was established that the son and daughter-in-law would take care of the father and his second wife after half of the share of the estate was transferred to the son’s name. Since the son and daughter-in-law failed to fulfil their commitments, the father was allowed to apply for the gift produced in favour of the son be annulled.

Thus, while a property given under a valid gift is generally final and irreversible, the same can still be annulled in special circumstances such as the child’s desertion of parents.