Unregistered gift deeds not valid, rules HC

Gift deeds will be valid only after they have been registered, the stamp duty is paid, and all other formalities are completed, the Bombay High Court recently said in a ruling. The ruling came in a battle between two sisters over their mother’s bungalow in a prime location in Chembur.

Leena D’Souza who had claimed her family had been gifted the bungalow by her mother was stopped from selling or creating any third party rights over the property. The reason: the gift deed reportedly made in 1985 was registered only in 2009, 10 years after Esther’s death in 1999.

Justice Roshan Dalvi last week rejected Leena’s plea to vacate its interim orders on a petition filed by the other sister, that the bungalow must come to all heirs according to the mother’s will. The judge noted that all gift deeds have to be compulsorily registered and it is only after stamp duty and other formalities are complete that it becomes valid.

The Gift Deed is a document compulsorily registerable. A document can be registered only after payment of the necessary stamp duty. The stamp duty would have to be adjudicated by the stamp authority. The document lodged for registration would remain at that until the necessary adjudication of the requisite stamp duty is applied for and made if the document did not show the payment of adequate and sufficient stamp duty from the inception. If, therefore, an executant of a document does not pay sufficient, adequate and requisite stamp duty, the document would remain unregistered. The Gift Deed which is unregistered cannot be acted upon and is not a valid gift. It is only upon registration that it would assume validity in law. That would be only when the necessary stamp duty along with penalty is paid and the document is registered. Edna had passed away before registration. Edna, who was the donor, had not paid requisite stamp duty during her lifetime. The Gift Deed could not take effect during her lifetime. She, therefore, continued to be the owner of the suit property during her lifetime. She has executed a will and codicil for which probate has now been applied for and is pending.



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Changes in Our Business Model
25th Sept 2020
Greetings from Moneylife Advisory Services
Between financial years 2019-21, SEBI has come up with extensive changes to investor advisor regulations. On Sep 23, 2020, SEBI had issued new additional guidelines. This comes just two months after extensive changes announced in July 2020. Earlier, in December 2019 there was an ad hoc circular
As a result of these changes, IAs, cannot accept fees through credit cards, will have to sign a 26-clause investor agreement, have to maintain physical record written & signed by client, telephone recording, emails, SMS messages and any other legally verifiable record for five years. IAs were already asked to record the suitability and rationale for every piece of advice given, sign them and store them for five years.
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