Gift is a transfer of property in which ownership is transferred by a living person to another living person and, the transfer is made without any consideration. Gift is, therefore, a transfer inter vivos i.e. between living persons. Where a transfer of property takes place after the death of a transferor, it is called a will. Moreover, gift is a gratuitous transfer i.e., a transfer, without any consideration.
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Where ownership in a property is transferred in return of some consideration, the transfer is not gift; it is either sale or exchange. In brief, the essential feature of the gift is that it is a gratuitous and inter vivos transfer of ownership in an existing property.
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This accepted meaning of the term ‘gift’ is recognised in all the legal systems, including the Muslim law. Under Muslim law, a gift is called Hiba.
When a Muslim transfers his property through gift, the transfer is called Hiba or a ‘Muslim gift’. The religion of the person to whom the gift is made, is not relevant. If the transferor is Muslim, the gift is Hiba. Thus, where a Muslim makes a gift of his properties in favour of a Hindu, the gift is nonetheless a Hiba.
It may be noted that gift, being a transfer of property, is governed by the Transfer of Property Act, 1882. Chapter VII of this Act is applicable to gifts made by any person in India, irrespective of religion, caste or creed. But, the Transfer of Property Act does not apply to “Muslim gifts” or the Hiba.
The reason is that although there is no difference in the gifts made by non-Muslims and a Hiba in so far as its basic nature is concerned yet, the formalities of Hiba are different from that of a gift made by any non-Muslim.
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As the rules of Muslim personal law were found to be in conflict with the general rules framed for all the persons in India, it was deemed fit to exclude Hiba, or the gift made by a Muslim, from the operation of Chapter VII of the Transfer of Property Act.
Moreover, the Shariat Act, 1937, includes gift as one of the matters in which rule of decision should be Muslim personal law if the parties are Muslims. The result is that gifts made by non-Muslims in India are governed by the provisions of the Transfer of Property Act, 1882, whereas the gifts made by Muslims are governed by the Muslim personal law. However, other kinds of transfers inter vivos by Muslims, such as the sale, exchange, mortgage or lease, are regulated by the Transfer of Property Act and not by Muslim law.
Constitutionality of Hiba:
The Transfer of Property Act exempts only those gifts which are made by Muslims. This exemption may appear to be a discrimination on the ground of religion which is against the constitutional mandate. But, it is now well established law that this exemption is constitutional and lawful.
‘Muslim gift’ or the Hiba has been associated with religion and has also been included in the Shariat Act, 1937, to be regulated only by Muslim personal law; therefore, the exemption under Section 129 of the Transfer of Property Act does not violate Article 14 of the Constitution of India.
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The courts have held that the rules of Muslim law regarding gifts are based on reasonable classification and there is no discrimination in allowing a separate law for gifts made by Muslims.
A significant point in respect of Hiba is that Muslim Law recognises certain peculiar kinds of gifts which are not known to other systems of law. For example, Muslim Law recognises, Hiba-bil-Ewaz or a gift with an exchange, and Hiba-ba-Shart- ul-Ewaz or a gift with a condition precedent. Under Muslim Law, these two transfers are regarded as distinct kinds of Hiba.
But, as a matter of fact, these kinds of gifts are gifts only for the name’s sake. As is discussed in the following pages, the courts in India have never regarded them as species of gift. Hiba-bil-Ewaz has been treated by the courts as a sale or exchange. Similarly, Hiba-ba-Shart-ul-Ewaz has been interpreted as a Hiba subject to some prior condition.
The transfer by way of gift has been recognised as lawful since the early years of Islam. The Prophet directed the people of Arabia to make gifts to each other in order to encourage mutual love and affection between them. He has said “Send Ye presents to each other for the increase of your love.