Hiba or the oral gift in Muslim Law is legally valid

I have been asked, for the benefit of the general body of citizens, to provide a written opinion as to the LEGAL VALIDITY of oral gift, the requirement if any of registration and stamp duty, the provisions of the GHMC Act applicable, the provisions of Muslim Law (Muslim Law is often referred to as Mohammedan Law; the expressions can be taken as interchangeable) which permit oral transfers, relevant judgments, etc.  The same is given below, as my considered LEGAL OPINION.

Several statutory provisions and judgments govern the matter in a clear manner.  These are:

Transfer of Property Act – s.9 : A transfer of property may be made without writing in every case in which a writing is not expressly required by law.

Transfer of property Act – s.129 : Nothing in this chapter… (chapter on “Gifts” from secs. 123 to 129 of the T P Act) … shall be deemed to affect any rule of Mohammedan Law.

In gift delivery of possession is essential. Registration does not cure defect – AIR 1960 MYSORE 97, AIR 1971 HIMACHAL PRADESH 5

A gift by a Mohammedan must comply with the provisions of Mohammedan law – AIR 1928 PRIVY COUNCIL 108

Writing is not necessary for a valid gift inter vivos (i.e., among living persons) among Muslims, but there must be delivery of possession according to the nature of the property given – AIR 1966 SUPREME COURT 1194

Legal principles enunciated by the Supreme Court cannot be disregarded on the ground that facts are not identical – AIR 1980 KARNATAKA 66,69

Obiter Dicta (i.e., even passing observations) of Supreme Court binding on all courts – AIR 1977 ALLAHABAD 370

Document of Gift executed by a Mohammedan recording a gift made according to the three conditions laid down by Muslim Law is merely evidence of a completed gift and as such is not compulsorily registerable and is admissible in evidence notwithstanding secs. 17 and 49 of the Registration Act – AIR 1962 ANDHRA PRADESH 199 (Full Bench)

A mere memorandum of things already transacted does not embody the gift and hence no registration is necessary – AIR 1971 CALCUTTA 162

It can be seen that right from 1922 Privy Council (Indian Appeals) to the present, the law has held oral gifts valid where Muslim Law principles were questioned:

The Privy Council in Mohammad Abdul Ghani and Anr. v. Fakhr Jahan Begam and Ors.(1922) 49 Indian Appeals 195 declared the following requirements for a valid hiba or gift under Muslim law – 1) expression on the part of the donor of desire to give; 2) acceptance of the donee, either implied or expressly; and 3) the taking of possession (either actual/physical or constructive) of the subject matter of the gift by the donee.

 

In the matter of Hafeeza Bibi and Ors. v. Farid (Dead) by L.Rs. and Ors.AIR 2011 SC 1695, the judgement and order dated 13th September 2004 passed by the High Court of Andhra Pradesh holding an unregistered gift deed to be invalid, was challenged. The Supreme Court while recognising and reiterating the three essentials of a valid gift under Muhammadan Law i.e. (i) declaration of the gift by the donor; (2) acceptance of the gift by the donee and (3) delivery of possession stated that the rules of Muhammadan Law do not make writing essential to the validity of a gift. An oral gift fulfilling all the three essentials makes the gift complete and irrevocable.

The apex court observed: “In our opinion, merely because the gift is reduced to writing by a Muslim instead of it having been made orally, such writing does not become a formal document or instrument of gift. When a gift could be made by Muslim orally, its nature and character is not changed because of it having been made by a written document. What is important for a valid gift under Muslim Law is that three essential requisites must be fulfilled. The form is immaterial. If all the three essential requisites are satisfied constituting valid gift, the transaction of gift would not be rendered invalid because it has been written on a plain piece of paper. The distinction that if a written deed of gift recites the factum of prior gift then such deed is not required to be registered but when the writing is contemporaneous with the making of the gift, it must be registered, is inappropriate and does not seem to us to be in conformity with the rule of gifts in Muslim Law.”

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Rasheed Khan vs Sheikh Kabir on 24 April, 2017, WP 8777 of 2015 para 12:

As per the principles laid down in Hafeeza Bibi [Supreme Court, Hafeeza Bibi and others Vs. Shaikh Farid (AIR 2011 SC 1695)] it is clear like noon day that in the Mohammedan Law, for the purpose of determining whether the gift was Hiba, three essential ingredients must be there. These are (i) declaration of gift by the donor, (ii) acceptance of the gift by the donee and (iii) delivery of possession.

In para 29 of the judgment in Hafeeza Bibi the Apex Court opined that the distinction that if a written deed of gift recites the factum of prior gift then such deed is not required to be registered but when the writing is contemporaneous with the making of the gift, it must be registered, is inappropriate and does not seem to us to be in conformity with the rule of gifts in Mohammedan Law. In para 34 of the judgment of Hafeeza Bibi the Apex Court, in the facts and circumstances of the case, examined and found that the aforesaid three ingredients of declaration, acceptance and delivery are available.

In the matter of Mohammed Yusuf s/o Mohammed Ibrahim v. State of Maharashtra and Ors2015 (1) BomCR 740, the stamp duty demand notice of Sub-Registrar and Stamp Collector was challenged. The Bombay High Court held that stamp duty demand as raised by the impugned stamp duty notice was unrecoverable since stamp duty on oral gift made by a Muslim in favour of a donee cannot be levied. It was further stated that there is no provision for levying stamp duty on an oral gift made by any Muslim.

There are many other judgements, not cited here as not necessary.

Para/Sec. 147, PRINCIPLES OF MOHAMMEDAN LAW, Mulla, 18th Edition, 2nd Reprint, Page 154 : WRITING NOT NECESSARY : Writing is NOT essential to the validity of a gift either of movable or immovable property.

Para/Sec. 149, PRINCIPLES OF MOHAMMEDAN LAW, Mulla, 18th Edition, 2nd Reprint, Page 157 : THREE ESSENTIALS OF A GIFT: It is essential to the validity of a gift that there should be (1) a declaration of gift by the donor; (2) an acceptance of the gift, express or implied, by or on behalf of the donee; and (3) delivery of possession of the subject of the gift by the donor to the donee as mentioned in Sec. 150.  If these conditions are satisfied, the gift is complete.

Para/Sec. 150, PRINCIPLES OF MOHAMMEDAN LAW, Mulla, 18th Edition, 2nd Reprint, Page 157 : DELIVERY OF POSSESSION : It is essential to the validity of a gift that there should be delivery of such possession as the subject of the gift is susceptible.

HYDERABAD MUNICIPAL CORPORATIONS ACT 1956: FORMS:

Form 1 under section 208 of Act, of Notice of Transfer when Transfer Effected by Instrument – last column reading “If instrument has been registered, the date of registration” showing that the instrument NEED NOT BE NECESSARILY A REGISTERED ONE.

Form 2 under section 208 of Act, of Notice of Transfer when Transfer Effected OTHERWISE THAN BY INSTRUMENT – showing from the very title that there NEED NOT EVEN BE A WRITTEN INSTRUMENT (as in the case of Gifts by Muslims).

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Sec. 207 HMC Act 1956 : Notice… of transfer of title : Whenever… title is transfered, the person whose title is so transfered shall, within three months from date of execution of instrument of transfer, or its registration IF it be registered, OR EFFECTING THE TRANSFER IF NO INSTRUMENT BE EXECUTED, give notice of transfer to the Commissioner.

Sec. 208 HMC Act 1956 : Notice to be in Form 1 or 2 as applicable of Schedule F.

The above extracts show that:

A: The HMC Act 1956 does not require that any transfer be by instrument.

B: The Registration Act does not require a memorandum of a gift made orally by a Muslim to be registered.

C: The ORAL gift by a Muslim is valid if there is (i) an offer, (ii) an acceptance, (iii) delivery of possession.

ALL these conditions stand satisfied in the instant case.

Therefore, it is clear that established position of law is that an oral gift (hiba) by a Muslim, is not required to be in writing and is valid if its three stated ingredients are present. If there is writing made, recording the oral gift, such writing does not require registration.  Also the HMC Act itself, even where there is an instrument, allows for situations where the same is NOT registered, and it allows for transfers without any instrument at all.

The title to property thus transferred does not suffer from any vitiating element, and therefore there is no bar or obstacle in the transfers validly effected in accordance with Muslim Law as well as Transfer of Property Act being implemented in full, and mutations effected.  The Registration Act, as above, is not applicable.

The Municipal Corporation, itself a creature of the law, cannot refuse to accept these, as that would be acting contrary to settled principles enunciated even by the Hon’ble Supreme Court, as also acting against the statute, including the very Act and laws under which the Corporation itself functions.

In the context of the principle of estoppel embodied in section 115 Indian Evidence Act        (“when one person has by act omission or declaration intentionally caused or permitted another person to believe a thing to be true and to act upon such belief, neither he nor his representative in interest shall be allowed, in any suit or proceeding between himself and such person or his representatives in interest, from denying the truth of that thing”)        therefore, all persons claiming under the donor would be estopped from making any claim at all inconsistent with the contents of the aforesaid documents.  Thus no one can challenge the facts set out in the said documents, and challenge title which cannot be questioned even by the former owner or any person claiming under him.

Further, section 41, Transfer of Property Act says      “where with the consent express or implied, of persons interested in immovable property, a person is the ostensible owner of such property and transfers the same for consideration, the transfer shall not be voidable on the ground that the transferor was not authorised to make it provided that the transferee after taking reasonable care to ascertain that the transferor had power to make the transfer, has acted in good faith”.      Thus as the former owner has expressly indicated transferee to be the owner of the property in question, and the said transferee transfers the same for consideration, in my opinion such a matter would be one where the property has marketable title vesting in the donee with valid rights passing to any transferee from him.

Shafeeq R. Mahajir is a Hyderabad-based nationally known lawyer

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