Onerous Gift

Introduction

An onerous gift is a special type of gift where the property comes with a burden (liability or obligation). The law ensures that a person cannot take only the benefit of such a gift while avoiding its burden.

Meaning / Definition

Under Section 127 of the Transfer of Property Act, an onerous gift is a gift made to a donee where some part of the gifted property carries an obligation.

The donee must accept the gift as a whole, including both benefit and burden.

Types

Single Transfer (One Transaction)

Where multiple properties are gifted in one single transaction:

• The donee must accept all properties together
• He cannot accept only the beneficial part and reject the burdensome part
• If he tries to do so, the entire gift becomes void

Separate Transfers (Different Transactions)

Where properties are gifted through separate and distinct transactions:

• The donee has a choice
• He can accept beneficial gifts and reject burdensome ones

Onerous Gift to Disqualified Person (Minor)

If an onerous gift is made to a minor:

• The minor can accept the gift
• But he is not bound by the obligation
• On attaining majority, he can:
  • Accept the gift with burden, or
  • Reject the gift

The gift is complete once accepted, even during minority.

Effect of Onerous Gift

• The donee is liable only to the extent of the property received
• He must bear the burden attached if he accepts the gift
• The donor cannot take back the gift once it is accepted, unless the donee later refuses it (in case of a minor)

Distinction / Comparison

Onerous Gift vs Simple Gift

• Onerous gift has obligations attached
• Simple gift has no burden
• Onerous gift requires acceptance of both benefit and burden

Single Transaction vs Separate Transactions

• Single transaction: no choice, accept all or none
• Separate transactions: donee can choose between gifts

Practical Example

A gifts B 200 shares of a profitable company and 100 shares of a loss-making company in one transaction. B must accept both or reject both. He cannot accept only the profitable shares.

If these were given in separate transactions, B could choose to accept only the profitable shares.

Summary

• Onerous gift includes both benefit and burden
• Donee must accept the whole gift in a single transaction
• Cannot accept benefit and reject burden
• In separate transactions, donee has a choice
• Minor can decide after attaining majority
• Donee’s liability is limited to the property received