Transfer of Property Act • Official Statutory Text & Practice Guide
Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1882
Section 128 of Transfer of Property Act: Universal donee
Official Bare Act Text
Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary
Subject to the provisions of section 127 , where a gift consists of the donor's whole property, the donee is personally liable for all the debts due by and liabilities of the donor at the time of the gift to the extent of the property comprised therein.
Statutory Defined Terms in this Section:(Click any term for official legal definition)
Section 128 defines the liabilities of a universal donee, providing that where a gift consists of the donor's whole property, the donee is personally liable for all the debts and liabilities of the donor up to the value of the property.
Universal Donee Definition: Subject to the provisions of Section 127, where a gift consists of the donor's whole property (both moveable and immoveable).
Personal Liability for Donor's Debts: The donee is personally liable for all the debts due by and liabilities of the donor at the time of the gift.
Ceiling on Liability: Liability is capped to the extent of the property comprised in the gift.
Fraudulent Transfer Shield: Prevents debtors from divesting themselves of all assets through family gifts to defeat creditors.
Key Landmark Precedents:
Asset Reconstruction Co. (India) Ltd. v. S.P. Velayutham, (2022) 8 SCC 210: The Supreme Court noted that Section 128 protects creditors by ensuring that a universal donee who swallows the debtor's entire estate remains directly liable for all pre-existing debts.
CIT v. P.V. Kalyanasundaram, (2007) 10 SCC 1: Affirmed that a universal donee steps into the shoes of the donor regarding outstanding fiscal and civil liabilities.
Courtroom Practice & Strategic Litigation Guidance:
Creditors can execute decrees directly against assets held by a universal donee without filing a separate suit under Section 53 fraudulent transfer; invoke Section 128 directly in execution.
Legal Commentary & Landmark Judgments: Section 128
Section 128 defines the liabilities of a universal donee, providing that where a gift consists of the donor's whole property, the donee is personally liable for all the debts and liabilities of the donor up to the value of the property.
Creditors can execute decrees directly against assets held by a universal donee without filing a separate suit under Section 53 fraudulent transfer; invoke Section 128 directly in execution.