Tuesday, December 10, 2013

ARTICAL ABOUT "TRANSFER OF PROPERTY TO UNBORN"



Section 13, 14 and 20 of the Transfer of Property Act, 1882 deals with the exceptions to the general principle that property cannot be transferred nor an interest be created in favor of persons not in existence.

Sec 13 of the T.P Act deals with the transfer of property in favor of unborn persons. As per this section interest created for the unborn must extend to whole of the interest of the property of the transferor. Thus, the interest of the unborn must be for the whole remainder and it is not permissible to confer an estate for life on an unborn person. Under sec 13 the transferor is not permitted to transfer anything less than his whole or entire interest in the property in favor of unborn persons with prior interest created in the same transfer. For example, if A transfers his property to B in trust for A and hisintended wife successively for their lives and after the death of the survivor,for the eldest son of the intended marriage for life and after his death, forA's second son. The interest created for the benefit of the eldest son does not take effect because it does not extend to the whole of A's remaining interest in the property.  

The prior interest created by the transferor must always be vested and not contingent in order to make transfer in favor of unborn persons valid. In theabove case the condition could be termed as a contingency since A getting amale child was only a remote possibility.

UnderSec 13 of the T.P Act, once the gift to an unborn person is valid, then suchinterest cannot be defeated and the unborn person acquires a vested interest onthe property on his birth. Further  it isto be noted that a vested interest also does not create a immediate enjoyment. It is not permissible under law to change the rule of succession under the color of fictitious endowment. The most important point is that there has to be a prior interest created by the very transfer to make transfer of property valid in favor of unborn persons. Similarly, prior disposition or transfer would not be affected if a condition subsequent becomes inoperative. 

Section14 of the T.P Act deals with the rule against perpetuity. Sec14 prohibits thecreation of certain remote interest in the immovable property so as to last forone or more existing lives plus 18 years. However the conditions relating to renewal of lease is not considered as transfer of any right in the property and hence not affected by the provisions of Sec 14.

The rule of perpetuity or Sec 14 does not affect the making of contracts which do not creates right in the property. Therefore a contract of sale is not hit by sec 14 as it does not create any interest in the immovable property in favor of the purchaser. The object of rule of perpetuity is to restrain creation of a future conditional interest in the property and is only concerned with the rights in property and for the application of Sec 14 there should be a transfer of interest in the immovable property.



Section 13 of the T.P Act is parallel to Sec 113 of the Indian Succession Act that deals with the transfer in favor of unborn persons where a bequest is made to a person not in existence at the time of the testator's death, subject to prior bequest contained in the will, the later bequest shall be void, unless it comprises the whole of the remaining interest of the testator in the thing bequeathed.


Under Sec 113 the bequest is void if the beneficiary is not in existence at the time of testator’s death. Postponement of possession does not affect the vesting of property. Section 113 does not concern itself with any possible diminution of the extent of the property by addition to the class for whose benefit the bequest is made. In the case of a bequest made for the benefit of an unborn person the amount is not payable until the birth of the person and the intermediate income would then accumulate for his benefit. The life estate so created in favor of persons in existence and those not in existence would take effect with reference to those in existence at the time of the death of the testator and would become invalid as to the rest and creation of successive life estates in favor of persons not in existence is also not permissible in law.



Bequest to a person not in existence at the time of testator’s death is void but bequest may be made to a child in mother’s womb provided the child is born within six months from the date of the will according to Section 120 of Shariat Act.


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