LHC nullifies disputed oral gift mutation

LAHORE:

The Lahore High Court (LHC) has ruled that a deficiency in furnishing precise particulars of alleged fraud cannot, by itself, establish an oral gift or relieve its beneficiary of the independent burden of proving the transaction from which title is claimed, particularly where the gift excludes legal heirs from inheritance.

Justice Anwaar Hussain of the LHC's Rawalpindi Bench, in a detailed judgment, held that a mutation merely records an asserted transaction and cannot substitute for proof of the underlying gift.

A person relying on an oral gift must independently establish its three essential ingredients - declaration by the donor, acceptance by the donee and delivery of possession - through cogent and reliable evidence.

The court observed that the burden on a person challenging a transaction on grounds of fraud and the burden on a beneficiary claiming an oral gift as the source of title were two distinct burdens.

Failure by the challenger to prove one circumstance alleged in support of fraud could not affirmatively establish that the gift was declared, accepted or completed.

Similarly, requiring particulars of fraud could not absolve the beneficiary from proving the gift itself.

Justice Hussain noted that this distinction assumed particular importance where the alleged gift had the effect of excluding persons who would otherwise inherit the estate by operation of law.

The judge further held that particulars of fraud could emerge from the circumstances surrounding a disputed transaction, including the donor's advanced age or serious illness, inability to understand or participate in the transaction, absence before the revenue authority, or absence of declaration or acceptance.

Therefore, what constituted sufficient particulars could not be determined through a rigid or formulaic test and had to be examined in the factual circumstances of each case.