Author: Saumya Poddar, ICFAI University, Dehradun
- Abstract
- Legal status of an unborn child
- Requirement for transfer to an unborn person
3.1 Rule against direct transfer to an unborn
- Prior Interest to a Living Perso
- Absolute Interest to the Unborn
- Reversion of property to unborn
- Time constraints of an unborn
- The vested interest of an unborn
- Analysis of Girijesh Dutt v. Data Din
- Other Landmark cases
- Conclusion
ABSTRACT
The Transfer of Property Act, 1882 outlines the general rule for the transfer of property under section 5 which stipulates that property can be transferred between two living persons. A living person in this context includes Individuals, groups, companies, or associations. This entity can transfer the property in the present or future, to one or more living persons, or even to themselves. However, does the law provide any rule for transferring property to someone who is not yet in existence? section 13 of the Act addresses this by providing a provision regarding the transfer of property for the ‘benefit of an unborn person’. here it is important to note that the property is not directly transferred to an unborn but instead held in their interest. This raises the question of how the property will be delivered to an unborn. This article will explore in detail the mechanisms through which a property can be transferred for the benefit of an unborn person and will also examine the landmark precedent related to this provision.
LEGAL STATUS OF AN UNBORN CHILD
An Unborn person is an individual who is not in existence thus includes someone not yet conceived or taken birth during the time of transfer. However, the Act also considers a child in the mother’s womb as an unborn person for the transfer of property but he will be considered a competent person under the general rule of transfer.
REQUIREMENTS FOR TRANSFER TO UNBORN PERSON
- The rule against direct transfer to an unborn
A direct transfer of property to an unborn is prohibited, However, Property can be transferred through the mechanism of creating a trust or by giving the property to an existing person for their lifetime, after which it will be transferred to the unborn person.
- Prior interest to a living person
A transfer for the benefit of an unborn person must be preceded by the prior interest created in favour of a living person. This living person will have the right to enjoy and possess the property but will not have the right to alienate it.
- Absolute interest to the unborn
an absolute transfer of property must be made to the unborn. Limited or life interest cannot be given to him. If such a transfer is attempted it will be considered void.
- Reversion of property to unborn
Upon the death of the intermediatory, their life interest will terminate and the property will be transferred to the person who was unborn at the time of the original transfer. the existence of the unborn is important at the time of death of intermediator’s death. Even If the child is in the mother’s womb at that time, they are considered as unborn for this purpose.
- Time constraints of an unborn
If the unborn does not come into existence before the death of the life holder of the property or if the unborn dies after birth, the property will revert to the transferor or his legal heir.
The vested interest of an unborn
The unborn person’s interest in the property vests immediately upon their birth. They acquire title over the property and the right to alienate it. However, this does not include the right to possession immediately upon the birth; this right is granted upon the death of the intermediatory. A condition such as gaining possession upon attaining the age of majority can be imposed by the transferor.
Rule Against Perpetuity, Section 14
According to this rule, no property transfer may be used to create an interest that will become effective after the lives of one or more people who are alive on the date of the transfer and the minority of a person who will be alive at that time and who will be entitled to the created interest if he reaches full age. By prohibiting the formation of interests that would bind the property indefinitely, Section 14 enhances Section 13. This regulation backs public policy that prefers free property alienation to property accumulation.
Girijesh Dutt v. Data Din
Facts of the case
A transferred her properties to B, her nephew’s daughter for life. The transfer specified that upon B’s death, the property would go to B’s Male descendants, if any In the absence of a male child, B’s daughter will hold the property without the power to alienate it. If B had no decedents, male or female the property would revert to A.’s nephew. In this case, B passes away without having any children.
Issue raised
- Whether the life interest gift to B was valid.
- Whether the subsequent gift to B’s daughter, which was limited in interest and without the power of alienation, was valid under Section 13 of the Act.
Judgement of court
The apex court held that the gift of life to B was valid since B was a living person at the time of the transfer. However, the gift in favor of B’s daughter was void under Section 13 of the Transfer of Property Act because it was a gift of limited interest rather than an absolute interest. Since this transfer was invalid, the subsequent transfer contingent on it also failed.
Analysis
This case reinforces the principle that only an absolute interest can be transferred for the benefit of unborn descendants. The case reinforces the principle that only an absolute interest can be transferred for the benefit of an unborn person. Thus, the case also emphasizes the rule against perpetuity which prevents the property from dying up among a family or a particular lineage indefinitely.
LJV Satyanarayana v. Pybovina Manikyan
Muthaiah had a son named Ganga Raju and executed a settlement deed granting his son a life estate in the suit property, with the remainder to pass to Ganga Raju’s sons upon his death. Ganga Raju, in turn, executed a relinquishment deed of his life estate back to his father Muthaiah on 31-8-1934. Ganga Raju died in 1971, leaving behind three sons: Ramarao, Lakshmanarao, and Muthaiah. The plaintiff, who was the auction purchaser of Muthaiah’s one-third share under a court sale certificate, also bought Lakshmanarao’s share from his wife Raghavamma via a registered sale deed dated 24-2-1972. The plaintiff filed the current suit to recover these two-thirds shares. The first defendant, Muthaiah’s son, resisted the suit, arguing that the relinquishment deed executed by Ganga Raju before the birth of his sons invalidated the gift to the unborn sons. The court set aside the earlier decree and judgments, allowing the appeal.
Ram Newaz v. Nankoo
In 1884, Ram Charan faced financial difficulties and held a 9-pie odd share in a village. He executed a sale deed that has been scrutinized by various courts, as the rights of the parties involved depend on its interpretation. The plaintiffs are the reversioners, while the defendants are the purchasers of the vendee’s rights. The core issue is whether the sale was an outright sale of the 9-pie odd share or if it excluded the disputed 2 bighas of land. When examining property transfers under Section 14 of the Transfer of Property Act (TPA), courts consider potential events according to the terms of the deed rather than actual events at the time of the transfer. In this case, Ram Charan sold his agricultural land excluding 2 bighas, with a condition that this portion would remain with him, his son, and their lineal descendants, who had no power to alienate it. If no lineal descendants survived, the 2 bighas would revert to the vendees or their heirs after the death of Ram Charan’s son without issue. A dispute arose between the vendees and Ram Charan’s reversioners regarding this condition. The deed created a life estate in favor of Ram Charan, his son, and their unborn descendants, violating Section 13, as only an absolute interest can be transferred to benefit an unborn person (limited to one generation). The court examined the deed and determined that the condition required the land to remain with Ram Charan’s family for hundreds of years, rendering it void by law. Consequently, the reserved land was decreed to the reversioners of Ram Newaz.
CONCLUSION
The Transfer of Property Act was enacted to ensure the free flow of property, preventing it from being indefinitely tied up within a particular family or lineage. It invalidates conditions that would restrict this free transfer. As we have explored, a person can transfer property to an unborn individual by first creating a prior interest for an existing person. This intermediary holds the property without absolute rights, ensuring it cannot alienate it, thus preserving the transferor’s intention for the unborn beneficiary. By granting absolute interest to the unborn, the Act safeguards the property against the rule of perpetuity. This nuanced rule for transferring property to an unborn person effectively balances the rights of the intermediary and the future interests of the unborn, embodying the Act’s purpose of promoting the dynamic and unrestricted transfer of property.
REFERENCES
FREQUENTLY ASKED QUESTIONS
- Can property be transferred to an unborn person?
- What is the rule against direct transfer to an unborn person
- What happens if the unborn beneficiary never comes into existence?
- What rights does an intermediary have when holding property for an unborn person?
- What is rule against perpetuity.
