Transfer of Property Act governs gifts of immovable property
- Indian Oil to invest Rs70,000 crore to expand refining capacity
- PNB-Nirav Modi fraud: Nexus between diamond traders and stock market brokers under scanner
- NTPC eyes 100% equity in some JVs with state utilities, stressed assets
- Maharashtra allows privatisation of cooperative spinning mills, powerloom societies
- Pakistan borrows $500 million from China
My query is that if in the mutation record of a piece of land, names of A, B and C—two brothers and mother—are entered, whether mother can relinquish her undivided share in favour of a selected son or will it be for all remaining? And if she wants to give to one, should it be by way of gift? If it is released in a selected name, is the deed invalid?
I am assuming that the mother and the two sons are tenants in common having distinct shares in the property. A deed of release is an instrument by which one of the co-owners releases or renounces his interest in the specified property and the result of such release would be the enlargement of the share of the other co-owner(s).
A co-owner can release or relinquish his share in favour of all the remaining co-owners if there are more than two co-owners. However, if the release or relinquishment is proposed only in favour of one or more co-owners specifically (out of several co-owners and where some of the other co-owners are excluded for the purpose of the release of interest), the release or relinquishment will be treated as a conveyance and stamp duty would be payable on such an instrument as on a conveyance.
Accordingly, if the intent is that the transfer or release of rights is intended to operate only in favour of some and not all the co-owners, then the language in the instrument should be clear and the release or relinquishment should be drafted in such a way that it shows a clear intention to convey title of the transferor in favour of the named co-owners. (See: AIR 1967 SC 1395 and AIR 1986 AP 42.)
In the query, if the mother wants to release her rights in the immoveable property in favour of one but not both of the other co-owners, who are her children, without receipt of any consideration for such transfer, the transfer or release may be in the nature of a gift and there is a possibility that the instrument under which the transfer is effected may be eligible for beneficial stamp duty rates, depending upon the state where the immovable property is located.
Accordingly you may want to draft the instrument of transfer as deed of gift rather than a release, unless the mother is receiving consideration for the relinquishment, in which case, as stated earlier, it would operate as a conveyance and would need to be stamped accordingly.
Also, a gift of immovable property would need to be executed in the manner set out in the Transfer of Property Act, 1882, and registered under the provisions of the Registration Act, 1908.
Queries and views at email@example.com