TRANSFER FOR BENEFIT OF UNBORN PERSON

Final Draft Submitted in Partial Fulfillment of Course Property Law, Semester 3, During the
academic year 2018-2019.

Submitted By:-
Shishir Niket
2nd Year B.B.A LLB (18161433)
Submitted To:-
Prof. B R N Sharma
Faculty of Property Law

CHANAKYA NATIONAL LAW UNIVERSITY ,NYAYA NAGAR ,PATNA -800001

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ACKNOWLEDGEMENT
Writing a project is one of the most significant academic challenges I have ever faced. Though this project has
been presented by me but there are many people who remained in veil, who gave their all support and helped
me to complete this project.
First of all I am very grateful to my subject teacher Prof. BRN Sharma SIR without the kind support and help of
whom the completion of the project was a herculean task for me. He donated his valuable time from his busy
schedule to help me to complete this project and suggested me from where and how to collect information and
data.
I am very thankful to the librarian who provided me several books on this topic which proved beneficial in
completing this project.
I acknowledge my friends who gave their valuable and meticulous advice which was very useful and could not
be ignored in writing the project. I want to convey a most sincere thanks to my parents for helping me
throughout the project.

Shishir Niket
2nd YEAR VSEMESTER
1 18161433

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Table of Contents
TRANSFER FOR BENEFIT OF UNBORN PERSON- A CASE STUDY ................................................................................... 1
ACKNOWLEDGEMENT ................................................................................................................................................................... 2
Introduction ..................................................................................................................................................................................... 4
ESSENTIAL CONDITIONS FOR TRANSFER TO UNBORN PERSON ................................................................................... 4
MOHAMMEDAN LAW ON TRANSFER TO UNBORN PERSON ............................................................................................ 7
Section 13 of Transfer of property Act .................................................................................................................................... 8
Unborn Person ................................................................................................................................................................................ 8
Creation of a Prior Life Interest ................................................................................................................................................ 9
No Life Interest for an Unborn Person ................................................................................................................................... 9
Validity of Transfer to be Assessed by the Language of the Deed and not by Actual Events. .......................... 10
Case Laws ........................................................................................................................................................................................ 10
Sopher’s case ........................................................................................................................................................................ 10
Ardeshir’s Case .................................................................................................................................................................... 11
Difference between English law and Indian law .............................................................................................................. 11
Rule under Hindu law and Muslim Law ...................................................................................................................... 11
TRANSFER FOR BENEFIT OF UNBORN PERSON ................................................................................................................ 12
Related Laws relating to the transfer made for benefit of unborn persons – ....................................................... 14
Why the rule is so made?.................................................................................................................................................. 14
Transfer to take effect on failure of prior interest .......................................................................................................... 15
Further issues dealt in the High court – ............................................................................................................................... 17
Conclusion ....................................................................................................................................................................................... 20
Bibliography................................................................................................................................................................................... 21

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Introduction

To whom Transfer Can be Made

Section 13: Where, on a transfer of property, an interest therein is created for the benefit of a person not in existence at
the date of the transfer, subject to a prior interest created by the same .transfer, the interest created for the benefit of
such person shall not take effect, unless it extends to the whole of the remaining interest of the transferor in the
property.

Illustration:

A transfers property of which he is the owner to B in trust for A and his intended wife successively for their lives, and
after the death of the survivor, for the eldest son of the intended marriage for wife, and after his death for A‟s second
son. The interest so 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.

Section 14: No transfer of property can operate to create an interest which is to take effect after the lifetime of one or
more persons living at the date of such transfer, and the minority of some person who shall be in existence at the
expiration of that period, and to whom, if he attains full age, the interest created is to belong.

Section 20: Where on a transfer of property, an interest therein is created for the benefit of a person not then living, he
acquires upon his birth, unless a contrary intention appear from the terms of the transfer, a rested interest although he
may not be entitled to the enjoyment thereof immediately on his birth.

ESSENTIAL CONDITIONS FOR TRANSFER TO UNBORN PERSON

In order that a transfer in favor of an unborn person may be valid, the following conditions must be fulfilled:

1) An intermediate interest must be created.

3) The interest created must be the whole remainder.
3) The unborn person must come into existence.
4) Interest must rest in unborn person.
5) Enjoyment of interest may be postponed.
6) Transfer must not be in perpetuity.
7) Transfer to class of persons does not fail wholly.
8) Interest must fail if prior interest fails.

EXPLANATION OF ESSENTIAL CONDITIONS

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(1) AN INTERMEDIATE INTEREST MUST BE CREATED
Section 13 provides that where an interest is created in favor of an unborn person, the creation of such interest must be
preceded by a prior interest and that the interest created in favor of the unborn person should be the whole remainder
making it impossible to confer a lesser interest on an unborn person.
The words “subject to a prior interest” suggest that the estate must rest in some person until the unborn person comes
into existence. The interest of the unborn person will, therefore, be, in every case, preceded by a prior interest.

(2) THE INTEREST CREATED MUST BE THE WHOLE REMAINDER

The section says that the interest created for the benefit of the unborn person shall not take effect, unless it extends to
the whole of the remaining interest of the transferor in the property in other words, the section, in effect, says that
the interest of the unborn person must be in the whole remainder. The transferor is not permitted to transfer any but an
absolute estate, i.e. his whole and entire interest in the property in favor of unborn person, when the transfer in favor
of him is to take effect after the determination of the prior interest created by the same transfer.
Illustration:
If A wants to give B a house and then to C who is unborn at the time of the gift, A must give C the whole of the
remaining interest. It cannot be set out in the transfer that C shall have only a power of disposing and the possession
will remain with the heirs of B or,rents and profits shall be given to somebody else.

(a) Philosophy behind:

The principle on which this section rests is that the liberty of alienation shall not be exercised to its own destruction,
and that all contrivances shall be void which tend to create a perpetuity or tend to place the property for ever out of
reach of the power of alienation. This principle is recognized in Section 10, providing that an absolute restraint upon
alienation is void, and in Section 14 which is directed against attempts to tie up properties for an indefinite period by
creation of successive life interests.
This rule is an attempt to import into and adapt for use what used before 1926 to be known in England as the “rule
against double possibilities”. The principle is that a person disposing of property to another shall not fetter the free
disposition of that property in the hands of more generations than one. AIR 1945 Pat 162(DB)

(3) THE UNBORN PERSON MUST COME INTO EXISTENCE

The unborn person must come into existence on or before the determination of the last life-estate.

(4) INTEREST MUST VEST IN UNBORN PERSON

Section 20 declares that where interest is validly created for the benefit of an unborn person, it becomes vested in the
unborn person upon his birth, unless a contrary intention appears from the terms of the transfer. A contrary intention
may appear from the terms of the transfer as where the transferor states that the unborn person is to take the property
on his attaining a particular age. In such cases Section 14 lays down a limit of time beyond which the vesting cannot be
postponed. It enacts that „ho transfer can create an interest which is to take effect after a life or lives in being and the
minority of an unborn person. In other words, the vesting of interest created for the benefit of an unborn person may
be postponed till he attains majority but no further.

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Illustration:
Where A makes a will in favor of B, and directs the executors to hand over the funds to B‟s trustees, who are to create
a trust so that the funds may go to the children of B and B marries after the death of A and has a daughter, and dies a
short time after his birth, the daughter takes a vested interest under the will. AIR 1946 B 134

(5) ENJOYMENT OF INTEREST MAY BE POSIPONED

The vesting of an interest does not necessarily carry with it the right to enjoy such interest immediately. Hence, an
interest may rest in the unborn person as soon as he is born, although he may not be entitled to the enjoyment thereof
immediately on birth

(6) TRANSFER MUST NOT BE IN PERPETUITY

In no case can be vesting be postponed beyond a number of lives in existence and the minority of that unborn person.
In other words, the transfer in favor of the unborn person (after the life time of one or more living persons at the date
of transfer) cannot be deferred for a longer period than what is necessary for his attaining majority

(a) Philosophy behind:

As long ago as 1732, Jekyll, MR., said that if the rule were otherwise “the mischief that would arise to the public from
estates remaining forever, or for a long time unalienable or untransferable from one hand to another, being a damp
to industry, and prejudice to trade, to which may be added the inconvenience and distress that would he brought on
families whose estates are so fettered. ”

(b) Period:
The transfer itself, whether of the whole or of a limited interest, cannot be created so as to last for one or more existing
lives plus 18 years (and the period of gestation in case of a possible issue).
Section 13 enacts in favour of an absolute transfer after a period and Section 14 enacts against transfers in perpetuity

(7) TRANSFER TO CLASS OF PERSONS DOES NOT FAIL WHOLLY

If a gift is made to a class of persons, with regard to some of whom it is void under Section 13 or 14, the gift fails with
regard to those persons only and not in regard to the whole class. It 15 only when a whole class is sought to be
benefited, that some of the members of that class may take notwithstanding the fact that other members of the class
may be incapacitated by reason of the rule of perpetuity. The section does not apply where there is no provision with
regard to the benefit of a class.

(a) Philosophy behind:

The uncertainty of the share which the transferees are to take in the subject-matter of the transfer may prevent an
interest from being vested In other words. Even though the donee capable of taking under the limitation are
ascertainable within the perpetuity period, the gift will nevertheless be void unless the exact share and nature of the
donee is also ascertainable with due limits. This is of importance in the case of class gifts.
Illustration:
(i) A transfer to the transferor‟s “son‟s son" or son‟s daughters or to the “widows” of X, is a transfer to a class where
the number is uncertain on the date of the transfer, 22 Bom 533
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(8) INTEREST MUST FAIL IF PRIOR INTEREST FAILS:
Where an interest is intended to take effect after a prior interest and the prior interest is void for any reason, the rule is
that the subsequent interest also fails. The reason is that the persons entitled under the subsequent limitations are not
intended to take unless and until the prior limitation is exhausted; and as the prior limitation can never come into
operation as being void, much less be exhausted. It is impossible to give effect to the intentions of the settler in favor of
the beneficiaries under the subsequent limitations. This section merely gives effect to this general rule. But the rule
will not apply where the subsequent interest is not intended to take effect after the prior interest, but is independent
thereof.

Illustration
(i) Where S gave away property to R for life and after her death, if there be any male descendants to them
absolutely. If R would have only daughters they were to have it without any power of transfer. In absence of any issue
male or female property was to go to D. Gift to R‟s daughter was only of limited interest and as such void under
Section 13 and gift over to D, was void under this section. AIR 1934 Oudh 35.

(ii) A gives away property to B for life, and after her death if there be any male descendants, whether born of son
or of daughter, to them absolutely. If B will have only daughters, they are to have no power of transfer. In the
absence of any issue whether male or female, living at the time of her death, the gifted property is not in any way so
devolve upon her husband or his family, but it is to go to C, the father of B, if he then be alive, and if C be not alive,
then the person who may be living of the line of C at that time will get it. B has no children at the time of the gift and
she dies issue less.
As the gift over in favor of sons and grandsons of B relates to absolute interest, it is valid, but the gift over to the
daughters is void because the transfer in their favor relates to a limited interest. The gift in favor of C is
intended to take effect after the gift in favor of the daughters. The intention of the donor being that C shall get the
property only in case the gift in favor of the male descendants and the daughters of B failed, the case is covered by the
words “upon failure of such prior interest" and the gift in favor of C being dependent upon the failure of the prior
interest in favor of the daughters, the gift in favor of C must also fill. (1934) O 35; 9 Luck. 329

MOHAMMEDAN LAW ON TRANSFER TO UNBORN PERSON

A property cannot be transferred to unborn person under Muslim law. But Shia law does create a vested remainder in
favor of an unborn person provided life estates are created in favor of persons in existence. AIR 1947 Bom. 185.

However, the following rules must also be kept in View:

(1) NO PERPETUITY BUT WAQF

With the exception of a waqf or a charitable devise, the Mohammedan law does not favor a perpetuity. But the creation
of a waqf is often resorted to for the purpose of creating perpetuity. In such cases, the so-called „waqf‟ is only so in
name, the ulterior object of the donor being unmistakably to create a perpetuity for the benefit of the donee or his
descendants. It is well settled that a trust immediately vesting the property in the trustee leaving the usufruct tied up

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 forever for the benefit of other persons, infringes the rule against perpetuity. A waqf under which the lion's share of
the income of the property would be utilized for the benefit of theWaqif and his descendants from generation to
generation infringes the rule against perpetuity.

(2) GIFT TO CLASS PERSONS

Where there is gift or bequest to a class of persons with regard to some of whom it fails by reason of any of the rules
contained in Sec 13 and 14, such interest fails in regard to those persons only and not only in regard to the whole class.

Section 13 of Transfer of property Act

“Where, on a transfer of property, an interest therein is created for the benefit of a person not in existence at the date
of transfer, subject to a prior interest created by the same transfer, the interest created for the benefit of such person
shall not take effect, unless it extends to the whole of the remaining interest of the transfer in the property.

Section 13 gives effect to the general rule that a transfer can be effected only between living persons. There cannot be a
direct transfer to a person who is not in existence or is unborn. This is the reason why section 13 uses the expression
transfer „for the benefit of‟ and not transfer „to‟ unborn person. A child in the mother‟s womb is considered to be
competent transferee. Therefore, the property can be transferred to a child in mother‟s womb because the child exists at
that time but not to an unborn person who does not even exist in mother‟s womb. Every transfer of property involves
transfer of interest. As soon as the property is transferred, the transferor is divested of that interest and the interest is
vested in the transferee. For vesting of interest, therefore, it is necessary that the transferee must be in existence.
Otherwise the interest will remain in abeyance till the transferee comes into existence. This is against the very concept
of an interest.
Section 13 provides that the property cannot transfer directly to an unborn person but it can be transferred for the
benefit of an unborn person. For transfer of property for the benefit of unborn person two conditions are required to be
fulfilled:
1) Prior life interest must be created in favor of a person in existence at the date of transfer, and
2) Absolute interest must be transferred in favor of unborn person.

Unborn Person
A person not in existence has a specific reference to one who may be born in the future but does not have a current
existence. Even thought a child in womb is literally not a person in existence, but has been so treated under both Hindu
Law and English Law. Thus, it should be noted that the term „unborn‟ here, refers to not only those, who might have
been conceived but are not yet born, i.e. a child in womb, but also includes those who are not even conceived. Whether
they will be born at all or not is all possibility, but a transfer of property is permissible to be effected for their benefit.
Transfer for the Benefit of Unborn Persons.
Section 13 provides a mechanism for a specific mechanism for transferring property validly for the benefit of unborn
persons. The procedure as follows:
1) The person intending to transfer the property for the benefit of an unborn person should first create a life estate1[1] in
favor of a living person and after it, an absolute estate in favor of the unborn person.

[1] A life holder enjoys the property for his life only. He cannot transfer it to anyone. On his death, the property, the property goes back to the
settler or to anyone else, that the settler may direct.
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2) Till the person, in whose favor a life interest is created is alive, he would hold the possession of the property, enjoy its
usufruct i.e. enjoyment the property.
3) During his lifetime if the person, (who on the day of creation of the life estate was unborn) is born, the title of the
property would immediately vest in him,[2] but he will get the possession of the property only on the death of the life
holder.

Creation of a Prior Life Interest

As far as the creation of a prior interest is concerned, first, the property is given for life to a living person. It is not
necessary that life interest should be created in favor of only one living person. The transfer is competent to create
successive life interests in favor of several living persons at the same time.
For instance, A transfer property to B for life, and after him, to C, and then to D again for their lives and then
absolutely to B‟s unborn child UB.
A ---------------------------------B (life interest)
----------------------------------C (life interest)
----------------------------------D (life interest)
----------------------------------UB (Absolute interest) [fig (ii)]
On B‟s death, the possession would be taken by C and on C‟s death, by D. On D‟s death, the possession would go to
B‟s child, who should have come in existence by this time. If he not there, the property would revert back to A, if he is
alive, else to his hiers.
No Life Interest for an Unborn Person
As far as the unborn is concerned, no life interest can be created for the benefit of an unborn person. Section 13,
specifically prohibits that, by the use of the expression, „the interest created for the benefit of such person‟ shall not
take effect, unless it extends to the whole of the remaining interest of the transferor in the property. It means that the
transfer must convey to the unborn person, whatever interest he had in the property, without retaining anything with
him. Thus, no limited estate can be conferred for the benefit of the unborn person. If limited interest in the property is
settled for him, the same would be void.
For instance, A creates a life estate in favor of his friends B, and a life estate for the benefit of B‟s unborn first child
UB1 and then absolutely to B‟s second child UB2.
A ----------------------- B (Life interest)
----------------------- UB1 (Life interest)
----------------------- UB2 (Absolute interest) [fig (ii)]
The second figure is of limited interest in the property for the benefit of an unborn person and would therefore be void
and incapable of taking effect in law. After the death of B, here, the property would revert back to A or his hiers as the
case may be, as even though the transfer for the benefit of UB2 appears to be proper, as it is dependent on a void
transfer that cannot take effect in law; a transfer subsequent to, or dependent on a void transfer can also not take effect.
Thus, where a father gave a life interest in his properties to his son and then to his unborn child
absolutely, it was held that the settlement was valid.2[3] But where the interest in favor of the unborn child was a life

[2] See The Transfer of Property Act 1882, s20.

[3] Jv Satyanarayan v Pyboyina Manikyan AIR 1983 Andh Pra 139

[4] Girish Dutt v Data Din AIR 1934 Oudh 34
[5] Ardeshir v Dadabhoy AIR 1945 Bom 395
[6] Sopher V Administrator General of Bengal AIR 1944 PC67
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interest the settlement would be void, and a subsequent interest would also fail.[4] Similarly, where there is possibility
of the interest in favor of the unborn child being defeated either by a contingency [5] or by a clause of defeasance, [6] it
would not be a bequest of the whole interest, and would be therefore be void.

Validity of Transfer to be Assessed by the Language of the Deed and

not by Actual Events.
In the example cited above, in figure (ii), suppose UB1 dies before B and UB2 is alive when the life estate in favor of
B comes to an end. Even then, the transfer of the benefit of UB2 will not take effect as the validity of the transfer has to
be assessed from the language of the document and not with respect to probable or actual events that may take place in
future. It is the substance of the transfer that will determine whether it is permissible under the law or not and not how
the situation may emerge in future.
In Girish Dutt V Data Din, [7] A made a gift of her property to B for her life and then to her sons absolute. B had no
child on the date of execution of the gift. The deed further provided that in case B had only daughters, then the property
would go to such daughters but only for their life. In case B had no child then after the death of B, the property was to
go absolutely to X.
The deed on paper provided a life estate in favor of B‟s unborn daughters: which is contrary to the rule of
sec.13. However, B died without any child, and X claimed the property under the gift deed. The court held that where a
transfer in favor of a person or his benefit is void under sec.13, any transfer contained in the same deed and intended to
take effect or upon failure of such prior transfer is also void. In determining whether the transfer is in violation of
sec.13, regard has to be made with respect to the contents of the deed and not what happened actually. Here as the
transfer stipulated in the contract that was void, the transfer in favor of X also became void. Hence, X‟s claim was
defeated.
Case Laws
Sopher’s case
In the case of Sopher v Administrator General of Bengal3l[8] a testator directed that his property was to be divided
after the death of his wife into as many parts as there shall be children of his, living at his death or who shall have pre-
deceased leaving issue living at his death. The income of each share was to be paid to each child for life and thereafter
to the grand-children until they attained the age of 18, when alone the grand-children were to be absolutely entitled to
the property. The bequest to the grand-children was held to be void by Privy Council as it was hit by sec.113 of the
Indian Succession Act which corresponds to sec.13 of Transfer of property Act. Their Lordships of the Privy Council
observed that: “ If under a bequest in the circumstances mentioned in sec.113, there was a possibility of the interest
given to the beneficiary being defeated either by a contingency or by a clause of a defeasance, the beneficiary under the
later bequest did not receive the interest bequeathed in the same unfettered form as that in which the testator held it and
that the bequest to him did not therefore, comprise the whole of the remaining interest of testator in the thing
bequeathed.

[7] AIR 1934 Oudh 34

[8] AIR 1944 Oudh 35

[9] 45 Bom 395
[10] 49 Bom L.R.882

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 Ardeshir’s Case
In Ardeshir V Duda Bhoy’s[9] case D was a settler who made a settlement. According to the terms of settlement, D was
to get during life, one-third each was to go to his sons A and R. After D‟s death, the trust property was to be divided
into two equal parts. The net income of each property was to be given to A and R for life and after their death to the
son‟s of each absolutely. If A and R were each to pre-deceased D without male issue, the trust were to determine and
the trust property were to the settler absolutely. The settler then took power to revoke or vary the settlement in whole or
in part of his own benefit. It was held that R‟s son who was not born either at the date of settlement or his death did not
take any vested interest and the gift to him was invalid. A‟s son who was alive at these dates did not also take a vested
interest.

Applicability of Sopher and Ardeshir rulings in India

The decision in Sopher‟s case and Ardeshir‟s case were applied by Bombay High Court in Framroz Dadabhoy v
Tahmina[10], in this case, bai Tahmina settled a certain sum upon trust in favor of herself for life and after her death
and subject to the power of appointment by codicil or Will among her issues born during her lifetime in trust for all her
children who being sons shall attain the age of 18 or being daughters shall attain that age or marry under that age being
daughter‟s, in equal sums. It was held by their Lordships that the decision in the Sopher‟s case could not be applied to
the trusts of a settlement which were transfer inter-vivos. It was held that the words „extend to the whole of remaining
interest of the transferor in the property‟ in sec.13 of the Transfer of Property Act were directed to the extent of the
subject-matter and to the absolute nature of the estate conferred and not to the certainty of vesting.

Difference between English law and Indian law

Under Indian law, the estate created for the benefit of the unborn child cannot take effect unless it extends to the whole
of the interest in the properties, subject to the creation of a prior interest in favor of a living being. Only an absolute
interest can be granted to an unborn child. If a limited interest is created, the transfer for the unborn would be void.
Under English law, however, a limited interest can be created in favor of an unborn child, but not subsequent to that.
For instance, A creates a life interest in favor of his friend B and on his death, to his unborn son UB1 for life, and
then to B‟s unborn grandson UB2 absolutely.
A-------------------- B (Life interest)
---------------------- UB1 (Life interest)
----------------------- UB2 (Absolute interest)
This transfer would be valid under English law but would fail inder Indian la in favor of unborn son UB1, due to sec.13
and in favor of unborn grandsonUB2, due to sec.16 of TPA.

Rule under Hindu law and Muslim Law

Prior to the enactment of the TP Act, the rule under Hindu and Muslim law was that a gift to a person who was not in
existence, was void. The position under Muslim la continues to be the same. However, for Hindus, the rule was
modifies by series of enactments to bring it conformity with sec.13 of the TP Act.[11] Parallel provisions have also
been provided under Indian Succession Act 1925,[12] which permits bequest for the benefit of unborn person.
Section 113 of India Succession Act 1925(IS Act), applies to legacies created for the person not in existence and
contain a provision almost identical to sec.13 of the TP Act.4

[11] The Hindu Disposition of Property Act 1916: the Madras Act of 1914. Both these Acts were amended by the Act of 1929.
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TRANSFER FOR BENEFIT OF UNBORN PERSON

RULE RELATING TO TRANSFER FOR BENEFIT TO UNBORN PERSON –

Where, on a transfer of property, an interest therein is created for the benefit of a person not in
existence at the date of the transfer, subject to a prior interest created by the same transfer, the
interest created for the benefit of such person shall not take effect, unless it extends to the whole of
the remaining interest of the transferor in the property.1

When the above statutory definition is divided following are the essential elements to the above rule –

No transfer can be directly made to an unborn person;

The interest in favour of unborn person must be preceded by a prior interest; The prior

interest must also be created by the same transfer; and

The unborn person must be given the absolute interest of the transferor in the property.

The sum and substance of Sec.13 is that the property can be transferred to an unborn person provided the transfer is
supported by a prior life estate and the unborn person is given an absolute estate.

Illustration –

A transfers property of which he is the owner to B in trust for A and his intended 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 for A's
second son. The interest so 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.2

[12] See “ the Indian Succession Act 1925, ss 113, 114, 115 and 116
1
See Sec. 13 Transfer of property act, 1882
2 See T. Subramania Nadar v. T. varadharajan, AIR 2003 mad 364 at p. 368
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This section read with section 20, and 30 of the act (Transfer of Property Act, 1882) makes it clear that if a condition
subsequent is inoperative; the prior disposition is not affected thereby. Again a vested interest does not imply
immediate enjoyment.

No interest can be created in favour of an unborn person but when the gift is made to a class or series of persons,
some of whom are in existence and some are not, it does not fail in its entirety; it is valid with regards to the persons,
who are in existence at the time of testator‟s death and is invalid as to the rest.

In the case of Isaac Nissim Silas v. Official trustee of Bengal, the trust was a family trust created for the benefit of
settlor and his wife, his two sons and their children to be born. At the date of the trust the settlor‟s family consisted
of his wife and his three children. The trust deed provided that the trustee after making provisons for meeting the
necessary expenses, the property will remain in lifetime of settlor, thereafter to his wife, thereafter to his three sons
in equal shares. Remainder in favour of the sons children that may be born and remain alive at a certain period
subject to certain restrictions. The legality of the gift made in favour of the grandsons was questioned. Held that the
trust in favour of the grand-children in deed of trust was void.

In case of Sopher v. Administrator General of Bengal, held in similar circumstances that bequest being not the
whole interest of the testator the bequest so made must be held void in law.

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Related Laws relating to the transfer made for benefit of unborn
persons –

Rule against perpetuity -

No transfer of property can operate to create an interest which is to take effect after the life time of
one or more persons living at the date of such transfer, and the minority of some person who shall
be in existence at the expiration of that period, and to whom, if he attains full age, the interest
created is to belong.8

The rules contained in Sec. 14 as regards transfer to unborn persons may be summed up as follows:

If before property is ultimately transferred to an unborn person, it is transferred to different persons for their
successive lives, they should all be living at the date of the transfer.

The unborn person must come into existence on or before the expiration of the existence life or lives named by the
transferor.

He must be given the entire estate of the transferor and the transfer must be absolute.

The vesting of the estate can‟t be postponed to period longer than is necessary for him to attain the majority.

Following are the exceptions to the rule against perpetuity:

 Gift to charity.
 Personal agreement i.e.; agreement which do not create any interest in the property.
 Contracts for perpetual renewal of leases.
 A wakf created for charitable purposes, under the Mohammedan law.

Why the rule is so made?

“This is a rule of public policy. The necessity of imposing some restraint on the power of postponing the acquisition
of the absolute interest in or dominion over property will be obvious if we consider for a moment , what would be
the state of community in which considerable proportion of the land and capital was locked up. The free and active
circulation of property, which is one of the springs as well as the consequence of commerce, would be obstructed;
the capital of the country withdrawn from trade; and the incentives to exertions in every branch of industry
diminished.9

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Transfer to take effect on failure of prior interest

Where, by reason of any of the rules contained in sections 13 and 14, an interest created for the benefit
of a person or of a class of persons fails in regard to such person or the whole of such class, any interest
created in the same transaction and intended to take effect after or upon failure of such prior interest
also fails.10

Transfer to Take Effect or Not on Failure of Prior Interest [Sec.16]

Sometimes an interest is intended to take effect after or upon the failure of a prior interest by reason of rules
contained in Sections 13 & 14. In such a case when the prior interest fails, the subsequent interest also fails.

Illustration –

A transfers his property to B and his intended wife successively for their lives and then to their eldest son for his
life and then to C. The prior interest in favour of the son of B fails u/s 13 & therefore the subsequent interest in
favour of C also fails.

Where the prior interest fails not by reason of Sec. 13 & 14 but due to any other reason, the subsequent interest
doesn‟t always fail. For e.g. A made a bequest to his wife for life and after her death to his younger son by her. The
bequest to wife failed for want of registration but the interest of the son will not fail, it will be valid.

“If the subsequent interest is to take effect upon the failure of the prior interest and the prior interest is against the
law and so invalid, the subsequent interest would also fail.” 11 Further the life estate holder cannot defeat the interest
of the unborn person by transferring the life estate to a third person. 12

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CASE STUDY – GIRJISH DUTT AND OTHERS V. DATA DIN AND OTHERS

This is an appeal from a decree passed by the Subordinate Judge of Partabgarh. The plaintiffs in the suit, which has
given rise to the appeal, were Data Din, Sitla Din, Sheo Mangal and Bindeshari Prasad. They brought the present
suit for possession of certain plots in the village of Purabayum in the district of Partabgarh. The defendants were
Girjish Dutt, Rajendra.

Facts-

One Mt. Sugga was the absolute owner of the property in suit. On 15th January 1919, she executed a deed of gift
transferring the property in the first place to Mt. Ram Kali, the daughter of Data Din, who was a son of her real
brother. Mt. Ram Kali remained in possession during her life. On her death a dispute arose between Data Din,
plaintiff 1, the father, and Girjish Dutt, defendant 1, the husband of Mt. Ram Kali. Data Din transferred some of his
interest to the three other plaintiffs, who joined him in instituting the suit. Girjish Dutt also transferred half of the
property to his brother Rajendra Dutt, defendant 2. The plaintiffs' case was that the gift in favour of Mt. Ram Kali
was of a life interest only, and that under the terms of the gift, the property passed on her death to her father Data
Din. The defendants on the other hand contended that Mt. Ram Kali was an absolute owner of the property
transferred to her under the gift, and therefore the property on her death devolved on her husband, defendant 1. They
also contended in the alternative that if the gift in favour of Mt. Ram Kali was not absolute, even then the gift over
in favour of Data Din was void by reason of the provisions of Ss. 13 and 16, T. P. Act.
Issues dealt -

Girjish Dutt claimed that he bad acquired the property in suit as the heir of his deceased wife, Mt. Ram Kali, but it
was admitted that he had transferred half of the property to his brother Rajendra.

It is common ground that the disputed property at one time belonged absolutely to Mt. Sugga, and that she
transferred it by a deed of gift, to Mt. Ram Kali. Now this Mt Ram Kali was the daughter of plaintiff 1, Data Din,
and the wife of defendant 1, Girjish Dat.

The questions in dispute between the parties arose out of the terms of the deed of gift executed by Mt. Sugga in
favour of Mt. Ram Kali.

The defendants contended that it was an absolute gift, and that consequently the property passed to Girjish Dutt on
the death of Mt. Ram Kali.

The plaintiffs case, on the other hand, was that the gift to Mt. Ram Kali was a limited one, that is a gift of a life
interest only, and that under the terms of the gift the property passed on her death to plaintiff 1, her father.

It was contended on behalf of the defendant that even if the gift to Mt. Ram Kali was not an absolute gift the
plaintiffs could have no claim, because the gift over to plaintiff 1 was void under the provisions of Ss. 13 and 16, T.
P. Act.

This defence was based upon the fact that Mt. Sugga had set forth in the deed that the property should pass, on the
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 death of Mt. Ram Kali, in the first place absolutely to any sons or grandsons of hers (Mt. Ram Kali's) who might be
alive at the time of her death ; secondly, if such sons and grandsons were not alive, that it should pass a life estate to
any daughters of Mt. Ram Kali's who might be alive at the time of her death ; and thirdly, that if no daughter or
daughters were alive, it should pass absolutely to Data din.

The contention urged on behalf of the defendants was that the gift of a life interest to the unborn daughters of Mt.
Ram Kali was void under the provisions of S. 13, T. P. Act, and that the gift over to the first plaintiff was
consequently void under S. 16 of the same Act, because he was to take after or on the failure of the daughters.

The learned Subordinate Judge held that the gift conveyed to Mt. Ram Kali only a life interest, and that the gift over
to plaintiff 1 was not void because it was not dependent on the gift to the daughters, but was an alternative and
independent gift.

Girjish Dutt and Rajendra instituted the appeal which is now under consideration before the High court.
The main questions which have been raised in arguments are:

(1) Whether the gift to Mt. Ram Kali was an absolute gift or not,
(2) Whether the plaintiffs' case falls under the provisions of Ss. 13 and 16, T. P. Act.

Further issues dealt in the High court –

Passage in the gift deed upon which reliance is placed by the appellants is this, according to the translator, namely:

“I do hereby make an absolute gift of the said properties in favour of the said Mt. Ram Kali with all the rights,
interest, external and internal, and all the zamindari cesses which I, the declarant, have and which I own.”

Another passage upon which reliance is placed by the appellants is this, namely.
“I, the declarant, having gifted all the rights and powers, present and future, in the gifted property which I, the
declarant, have or which shall accrue to me in future, without exception of anything, (bila kam-o kas) in favour of
the said Mt. Ram Kali, relinquish and forgo my possession and ownership.”

It is urged that this is a very strong expression of intention, and that it can only mean that there are no limitations
upon the gift.

It was further submitted that the donor goes on to say that Mt. Ram Kali shall have no right to transfer the property
in any way and if on her death there be any male descendants whether of son or daughter, he will be the absolute
owner of the property, and if Mt. Ram Kali may have only daughters they shall have no power of transfer. If,
God forbid, there may not be any issue of Mt. Ram Kali, whether male or female, living at the time of her death the
gifted property shall not in any way devolve upon her husband or his family, but it shall go to Data Din, the father of
Mt. Ram Kali, if he be then alive and if Data Din be not alive then the persons who may be living at the line of Data
Din at that time would get it.

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This passage makes it perfectly clear that Mt. Sugga did not intend that Mt. Ram Kali should have more than a life
interest in the property, although she was to have full enjoyment of it during her life.The high court was of the
opinion that the conclusion to be drawn from the deed as a whole must inevitably be that the gift to Mt. Ram Kali
was not an absolute gift, but a gift only of a life interest.

We come now to the second question. S. 13, T. P. Act runs as follows:

Where, on a transfer of property, an interest therein is created for the benefit of person not in existence at the date of
the transfer, subject to a prior interest created by the same transfer, the interest created for the benefit of such person
shall not take effect, unless it extends to the whole of the remaining interest of the transferor in the property.

It is clear that the gift over in favour of the sons or grandsons of Mt. Ram Kali was not in any sense void, and it was
a transfer of an absolute interest but on the other hand, the gift over to the daughters of Mt. Ram Kali, who were not
born at the time of the transfer, was void because the transfer of the interest to them was subject to the prior interest
created by the same transfer in favour of Mt. Ram Kali, and it was a transfer which did not extend to the whole of
the remaining interest of the transferor in the property, since it was intended merely to be a life interest.

Where by reason of any of the rules contained in S. 13.......an interest created for the benefit of a person......fails in
regard to such person.......any interest created in the same transaction and intended to take effect after or upon failure
of such prior interest also fails.

The counsel for appellants argued that the interest created for the benefit of Data Din was intended to take effect
upon failure of the prior interest created for the benefit of the daughters, that the interest for his benefit was created
in the same transaction as the interest for the benefit of the daughters, thus the benefit of the daughters failed by
reason of the rule contained in S. 13,
T. P. Act, the interest created for the benefit of Data Din also failed.

The respondents, on the other hand, rely upon the principle that the rule set forth in S. 16, T. P. Act, does not apply
if the subsequent interest is not dependent upon the prior interest. His contention was based on the fact that gift deed
had three different transactions namely –

1. A grant to Mt, Ram Kali for life, with remainder to her sons and grandsons, dependent upon the contingency that
there was a son or a grandson or sons or grandsons alive at the time of her death.
2. A grant to Mt. Ram Kali for life, with remainder to her daughters for life, dependent upon the contingency that
there were no sons or grandsons alive at Mt. Ram Kali's death, but that there was a daughter or daughters alive at
that time, and
3 A grant to Mt. Ram Kali for life, with remainder to Data Din, dependent upon the contingency that there were no
sons or grandsons or daughters alive at the time of Mt. Ram Kali's death.

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The question referred by the Division Bench for decision to the Full Bench is as follows: Whether, in the
circumstances set forth in our order, the gift over to Data Din under the deed executed by Mt. Sugga in favour of
Mt. Ram Kali is void having regard to the provisions of Ss. 13 and 16, T. P. Act.

Following were contention taken into consideration .The relevant portion of the deed of gift relating to the gift over
runs as follows:

“If on her (Ram Kali's) death there be any male descendants, 'whether born of son or daughter, he will be the
absolute owner of the property, and if Mt. Ram Kali may have only daughters, thay shall have no power of transfer.
If, God forbid, there may not be any issue of Mt. Ram Kali, whether male or female, living at the time of her death,
the gifted property shall not in any way devolve upon her husband or his family, but it shall go to Data Din, father of
Mt. Ram Kali, if he be then alive, and if Data Din be not alive, then the person who may be living of the line
of Data Din at that time would get it.”

The intention of the donor clearly was that Data Din should get the property only in ease the gift in favour of the
male-descendants and the daughters of Ram Kali failed. The case therefore seems to be fully covered by the words
upon failure of such prior interest.

If the taking effect of the subsequent interest is dependent upon the failure of a prior interest which satisfied the
other requirements of the section 16, we fail to see any escape from the rule laid down therein that such subsequent
interest must also fail. As we have held that the other requirements of the section are satisfied, and we are further of
opinion that the gift in favour of Data Din was dependent upon the failure of the prior interest in favour of the
daughters, the result is that the gift in favour of Data Din must also fail.
Thus issue reffered by the division bench to the full bench was given an affirmative answer.

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Conclusion

Section 13 and 14 of the TOPA go hand in hand, in as much as, section 13 and 14 are to be read together in order to
understand the provisions governing the Rules. Ÿ The TOPA does not permit transfer of property directly in favour of
an unborn person. Thus, in order to transfer a property for the benefit of a person unborn on the date of the transfer, it
is imperative that the property must first be transferred in favour of some other person living on the date of transfer. In
other words, the property must vest in some person between the date of the transfer and the coming into existence of
the unborn person since property cannot be transferred directly in favour of an unborn person. In other words, the
interest of the unborn person must, in every case, be preceded by a prior interest. Ÿ Further, where an interest is created
in favour of an unborn person on a transfer of property, such interest in favour of the unborn person shall take effect
only if it extends to the whole of the remaining interest of the transferor in the property, thereby making it impossible
to confer an estate for life on an unborn person. In other words, the interest in favour of the unborn person shall
constitute the entire remaining interest. The underlying principle in section 13 is that a person disposing of property to
another shall not fetter the free disposition of that property in the hands of more than one generation.
Section 13 does not prohibit successive interests (limited by time or otherwise) being created in favour of several
persons living at the time of the transfer. What is prohibited under section 13 is the grant of interest, limited by time or
otherwise, to an unborn person. Ÿ Further, Section 14 of TOPA provides that where an interest is created for the
benefit of an unborn person (in accordance with the provisions of section 13), such interest shall not take effect if the
interest is to vest in such unborn person after the life time of one or more persons living on the date of the transfer (i.e.
the person in whose favour the prior interest is created as required under section 13) and the minority of such unborn
person. In other words, the interest created for the benefit of an unborn person shall take effect only if the interest is to
vest in such unborn person before he attains the age of eighteen years. Ÿ Section 14 further provides that the unborn
person, in whose favour the interest is created, must have come into existence on or before the expiry of the life or lives
of the person(s) in whose favour the prior interest is created as required under section 13.

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Bibliography

DOMESTIC STATUTES

 TRANSFER OF PROPERTY ACT 1882

CASES

 Bhut Nath Mondal v. Kalipada Mondal, AIR 1982 Cal. 534

 Isaac Nissim Silas v. Official trustee of Bengal, AIR 1957 cal. 118

 Javvadi Venkata Satyanarayan v. Pyboyina Manikyan , AIR 1983 AP 139

 M. Kesava Gounder v. D.C. Rajan, AIR 1976 Mad. 102

 Raj Bahadur Singh v. Thakurain Bhaktraj Kuer, AIR 1953 SC 7

 Sopher v. Administrator General of Bengal, AIR 1994 PC 67

 T. Subramania Nadar v. T. varadharajan, AIR 2003 mad 364 at p. 368

 Girish Dutt V. Data Din AIR 1934 Oudh 34

 Jv Satyanarayan v Pyboyina Manikyan AIR 1983 Andh Pra 139

 Ardeshir v Dadabhoy AIR 1945 Bom 395

 Framroz Dadabhoy v Tahmina 49 Bom L.R.882

BOOKS

 Dr. G.C.Bharuka, mulla transfer of property act 1882,10th ed., 2006, Lexis Nexis Butterworths.

 Darshaw j. vakil, Transfer of Property Act (IV of 1882), 2 nd ed., 2004, wadhwa & company,
Nagpur.

 Dr. Shri Hari Singh Gour, commentary on Transfer of property Act (IV of 1882), 11 th ed., vol.1, 2008,
Delhi Law House.

 G.P. Tripathi, Transfer of property Act, 1882, 17 th ed. 2011, Central Law Publication, Allahabad.

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