Introduction
Section 13 of
Transfer of property Act Act read as follows:
“Where, on a transfer of property, an interest therein is created for the benef it of a person pers on not in existence at the date of transfer, subject 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.” property.” Section 1 gives 1 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. very transfer of property involves transfer of interest. As soon as the property is tran transfe sferre rred, d, the the trans transfe fero rorr is dive divest sted ed of that that inte interes restt and and the the inte interes restt is veste vested d in the the transferee. !or vesting of interest, therefore, it is necessary that the transferee must be in existen existence. ce. "therw "therwise ise the interes interestt will will remain remain in abeyanc abeyancee till the transfer transferee ee comes comes into existence. This is against the very concept of an interest.
Section 1 provides 1 provides that the property cannot transfer directly to an unborn person but it can be transferred tr ansferred for f or the benefit of an unborn person. !or transfer of property for the benefit of unborn person two conditions are re#uired to be fulfilled$ 1% &rior life life interest interest must be created created in favour favour of of a person in existence existence at the the date of transfer transfer '% Absolute interest must be transferred in favour 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. ven thought a child in womb is literally not a person in existence, but has been so treated under both (indu )aw and nglish )aw. 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. *hether 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 1 provides a mechanism for a specific mechanism for transferring property validly for the benefit of unborn persons. The procedure as follows$ 1 1% The person intending to transfer the property for the benefit of an unborn person should first create a life estate' in favour of a living person and after it, an absolute estate in favour of the unborn person. '% Till the person, in whose favour a life interest is created is alive, he would hold the possession of the property, en+oy its usufruct i.e. en+oyment the property. 3% uring 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, 3 but he will get the possession of the property only on the death of the life holder.
Creation of a Prior Life Interest
1 r. ./.0harua, mulla transfer of property act 122',1th ed., '4, )exis 5exis 0utterworths.
2 A life holder en+oys the property for his life only. (e cannot transfer it to anyone. "n his
the property goes bac to the settler or to anyone else, that the settler may direct.
3 The Transfer of &roperty Act 122', s'
death, the property,
As far as the creation of a prior interest is concerned, first, the property is given for life to a living person. 6t is not necessary that life interest should be created in favour of only one living person. The transfer is competent to create successive life interests in favour of several living persons at the same time. !or instance, A transfer property to 0 for life, and after him, to /, and then to again for their lives and then absolutely to 0’s unborn child 70. "n 0’s death, the possession would be taen by / and on /’s death, by . "n ’s death, the possession would go to 0’s child, who should have come in existence by this time. 6f he not there, the property would revert bac 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. 8ection 13, specifically prohibits that, by the use of the expression, ‘the interest created for the benefit of such person’ shall not tae effect, unless it extends to the whole of the remaining interest of the transferor in the property. 6t 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. 6f limited interest in the property is settled for him, the same would be void. 9 !or instance, A creates a life estate in favour of his friends 0, and a life estate for the benefit of 0’s unborn first child 701 and then absolutely to 0’s second child 70'. This for instance is of limited interest in the property for the benefit of an unborn person and would therefore be void and incapable of taing effect in law. After the death of 0, here, the property would revert bac to A or his heirs as the case may be, as even though the transfer for the benefit of 70' appears to be proper, as it is dependent on a void transfer that cannot tae effect in law: a transfer subse#uent to, or dependent on a void transfer can also not tae 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. ; 0ut where the interest in favour of the unborn child was a life interest the settlement would be void, and a subse#uent interest
nd
4 r. Avtar 8ingh, Transfer of &roperty Act, ' ed. '<, 7niversal )aw &ublishing /o.
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would also fail.4 8imilarly, where there is possibility of the interest in favour of the unborn child being defeated either by a contingency @ or by a clause of defeasance, 2 it would not be a be#uest of the whole interest, and would be therefore be void.
Validity of Transfer to be Assessed by the Lanuae of the !eed and not by Actual "#ents.
6n the example cited above, in figure -ii%, suppose 701 dies before 0 and 70' is alive when the life estate in favour of 0 comes to an end. ven then, the transfer of the benefit of 70' will not tae 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 tae place in future. 6t 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. 6n !irish "utt # "ata "in,< A made a gift of her property to 0 for her life and then to her sons absolute. 0 had no child on the date of execution of the gift. The deed further provided that in case 0 had only daughters, then the property would go to such daughters but only for their life. 6n case 0 had no child then after the death of 0, the property was to go absolutely to . The deed on paper provided a life estate in favour of 0’s unborn daughters$ which is contrary to the rule of sec.13. (owever, 0 died without any child, and clai med the property under the gift deed. The court held that where a transfer in favour of a person or his benefit is void under sec.13, any transfer contained in the same deed and intended to tae effect or upon failure of such prior transfer is also void. 6n 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. (ere as the transfer stipulated in the contract that was void, the transfer in favour of also became void. (ence, ’s claim was defeated.
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