Once gift deed is executed duly stamped and registered donee would be absolute owner of property 

2) suit ought to have been filed to set aside gift deed if no art college was set up 

3) sale by donor legal heirs do not confer clear and marketable title to property 

If donee is govt then govt can allot property to any NGO 

It is not clear what right the NGO has in the property.

If the NGO has nothing to do with the donor or the donee then its threats are emty words and does not carry any weight at all.

The gift if dne between two private parties then irrespective of the intention behind the gift the government can not have any interest in it and hence can not hand it over to another body unless and until it acquire it for public purpose on payment of adequate market price to the present owner.

1.  IRRESPECTIVE of the criteria /condition of the "Donor" for Gifting the "land" property to "Donee", the Donee derives rights to refuse to construct college building for the specific purposes, more so since money for college building was not given or money was not available.

2.  IF the said property was duly transferred to Donee's Son, by following due procedure of law (stamp duty paid registered document", THEN nobody (including NGO) can stake claim on such property, more so since the there is no privity of contract between the original Donor, the Donee and now the donee's son.

See gift cannot be conditional it has to be absolute so in case.it.was gifted and possession was given even then if there was no college built the gift is valid.

See NGO can ask for allotment of separate land from government but cannot ask for land in your ownership or ownership of any.other third party.

Let them file you can contest the same. 

NGO has no locus standi, if property is not put to use for purpose only donor could have file case for revocation of gift deed in his life time.

Now gift is complete , not even legal heirs of donar can question. Conditional Gifts Are Incomplete Until Conditions Are Complied With; Such Gift Deeds Can Be Cancelled By The Donor

After the gift deed has been executed it cannot be cancelled unilaterally. However, if the donor and donee are into a positive agreement to cancel the gift deed then it may be cancelled by executing a deed of cancellation.

Let the NGO claim this property, if you have bought it by a registered sale deed, then you can challenge the same properly in court of law.

The property was donated by a donor to  the donee and the donee is reported to have died intestate upon which his legal heir has sold this property by a registered sale deed, ther is no legal infirmity in it, you may have to fight on the same grounds only.

The cultural NGO has got nothing to do with this private property.

If at all they claim any property from government let them do it  but not with your property.

You may discuss with your advocate at length and proceed on the advise rendered to tackle this issue as per law.

Dear

A gift as per law cannot be conditional and gift transfers absolute ownership to donee.

So legal heirs of donee are absolute owner and can sell the property.

The NGO cannot file suit if they have no right over the property the suit is likely to be dismissed if filed by NGO.