Section 128 - Universal Donee under the Transfer of Property Act, 1882

Section 128 addresses a gift of the donor's whole property. The recipient, called a universal donee, becomes personally liable for the donor's debts and liabilities existing at the time of the gift, but only to the extent of the property included in that gift. The provision expressly operates subject to Section 127 on onerous gifts.

Complete text of Section 128 - Universal donee

Meaning of universal donee

A donor is the person making a gift, and a donee is the person receiving it under Section 122. A universal donee is a donee who receives the donor's whole property by gift. A gift of only one asset or a limited part of the donor's estate does not, merely for that reason, make the recipient a universal donee under Section 128.

Essential conditions under Section 128

1. Gift of the whole property: The gift must comprise the donor's entire property, rather than merely selected assets.
2. Existing debts and liabilities: The relevant obligations are those due by or attributable to the donor at the time of the gift. Section 128 does not, by itself, impose responsibility for debts the donor incurs only afterward.
3. Limited extent of liability: Although the section uses the words personally liable, it expressly limits the donee's exposure to the extent of the property comprised in the gift; it is not an unlimited assumption of every debt.
4. Section 127 applies: The gift remains subject to the rules concerning acceptance of an onerous gift, including rules for a donee not competent to contract.

How the liability limit works

Suppose A gifts all of A's property, worth Rs. 8 lakh, to B. At the time of the gift, A owes Rs. 11 lakh. If the transaction satisfies the applicable requirements for a valid gift and Section 128 applies, B's liability under that section is limited to Rs. 8 lakh, the extent of the gifted property, not the full Rs. 11 lakh. Actual valuation, existing encumbrances and the nature of the obligations may require separate examination.

By contrast, if A gifts only one parcel of land while retaining other property, B is not necessarily a universal donee; Section 128 cannot be applied simply because that particular parcel is valuable.

Difference between Section 127 and Section 128

Section 127 governs onerous gifts, where gifted property is burdened by an obligation, and distinguishes a single combined transfer from separate independent transfers. Section 128 specifically governs a gift of all of the donor's property and fixes responsibility for the donor's debts and liabilities existing at the date of the gift. The express opening words of Section 128 make the rule subject to Section 127.

Requirements for a valid gift

Section 122 requires a voluntary transfer without consideration and acceptance by or on behalf of the donee during the donor's lifetime while the donor remains capable of giving. Section 123 prescribes a registered instrument signed by or on behalf of the donor and attested by at least two witnesses for gifts of immovable property, and permits a registered instrument or delivery for movable property. The savings under Section 129, including the applicable rules of Muhammadan law, must be considered where relevant.

Practical questions when assessing a universal gift

• Does the deed and evidence establish a gift of the donor's whole property?
• Was the gift accepted and completed in the manner required by the applicable law?
• Which debts and liabilities existed on the date of the gift?
• What is the legally relevant extent and value of the property comprised in the gift?
• Does the gift contain onerous obligations attracting Section 127, or does any applicable special or personal law affect the transaction?

Official statute and related provisions

Read the Transfer of Property Act, 1882 on India Code, especially Chapter VII, Sections 122 to 129. See also Section 126 (revocation) and Section 127 (onerous gifts).

The application of Section 128 depends on the actual property transferred, the obligations existing at the time, the gift instrument and other applicable law.