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The Transfer of Property
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Transfer for Benefit of Unborn Person

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INDEX

 INTRODUCTION
 SECTION 13- TRANSFER FOR THE BENEFIT OF UNBORN
PERSON
 SECTION 14- RULE AGAINST PERPETUITY
 SECTION 15-TRANSFER TO A CLASS,SOME OF WHOM COME
UNDER SECTIONS 13 AND 14
 SECTION 16-TRANSFER TO MAKE EFFECT ON FAILURE OF
PRIOR INTEREST
 SECTION 17-DIRECTION FOR ACCUMULATION
 SECTION 18-TRANSFER IN PERPETUITY FOR BENEFIT OF
PUBLIC
 BIBLIOGRAPHY AND WEBLIOGRAPHY
 INTRODUCTION
Under Indian laws, there cannot be a direct transfer to an unborn person. An unborn person
means a person who is not in existence even in mother’s womb. A child in mother’s womb or, a
child en ventre sa mere is a competent transferee. Property can be transferred to a child in a
mother’s womb. But a property cannot be transferred to a person who is not even in the mother’s
womb because such person is an unborn person. Section 5 of The Transfer of Property also states
that transfer of property takes place only between two living persons. This means that the
transferee should also be in existence at the date on which the transfer takes place. Every transfer
involves transfer of interests of the transferor to the transferee and thus if a transferee is not in
existence at the date of transfer then the interest of that transferee will remain in abeyance until
the transferee comes into existence and that is not legally possible.

We will also discuss Section 14 which contains the Rule against perpetuity and Section
15,16,17,18 further in detail.
 Transfer for Benefit Of Unborn Person
Property cannot be transferred directly to an unborn person but property can be transferred for
the benefit of an unborn person. Section 13 provides that property can be transferred for the
benefit of an unborn person subject to the following conditions:

i. Transfer for the unborn must be preceded by a prior life interest in favour of a person in
existence at the date of transfer, and,
ii. Only absolute interest may be transferred in favour of the unborn.

I. PRIOR LIFE INTEREST-

The transfer for the benefit of an unborn must be preceded by a life interest in favour of a
living person who is in existence at the time of the transfer. When a transfer is made for
the benefit of an unborn an unborn person, such unborn person is the ultimate
beneficiary. The person in whose favour the life interest is created will hold the property
for his lifetime and will be transferred to the ultimate beneficiary after his death. Thus
there is an intermediary living person between the transferor and the unborn who holds
the property for the benefit of the unborn.
ILLSUTRATION:
A transfers his house to X for life and thereafter to U.B. who is an unborn son of A. the
transfer of house in favour of U.B. is valid. Here since U.B. is not existence at the time of
time of transfer , the transfer for life interest of X is also valid. Here X is the intermediary
person between A and U.B.

II. ABSOLUTE INTEREST

Only absolute interest in the property may be transferred in favour of an unborn person,
limited or lif interest cannot be given to an unborn.

Transfer of property for life of an unborn person is void. As per section 13 of the Transfer
of Property Act, 1882 interest given to an unborn person must be the whole of the
remaining interest of the transferor in the property.

So, when property is transferred in favour of an unborn person, the transferor first gives a
life interest to an existing person. After transferring it, he retains with him the remaining
interest of the property. This remaining interest with the transferor must be given to the
 unborn so after the termination of prior life interest, the unborn gets the whole or absolute
interest in the property.

These above mentioned conditions gave the following legal consequences-

i. The intermediary person only has the life interest i.e. he has only the right of possession
and enjoyment. He has to preserve the property like a trustee during his lifetime on the
behalf of the unborn.
ii. The unborn must come into existence before the death of the person holding the property
for his life. If the unborn comes into existence after one month of death of the last living
person holding the property, the property will then revert to the transferor or his heirs.

Girijesh Dutt v/s Data Din1

The facts of the case are A made gift of her properties to her nephew’s daughter B for life and
then absolutely to B’s male descendants if she should any. But in the absence of any male child
of B, B’s daughter without the power of alienation, and if B has no descendants male or female
then to her (A’s) nephew. B dies issueless.

The Court in this case held that the gift of life to B was valid as B was living at the date of the
transfer but the gift in favour of B’s daughter was void under Section 13 of Transfer of Property
Act, 1882 because it was a gift of limited interest (gift without power of alienation), she had not
been given absolute interest. Since the transfer was void the subsequent transfer to A’s nephew
also failed.

Transfer in favour of unborn under Hindu Law:

Under pure Hindu law, a gift or bequest in favour of unborn was void. But now the Transfer of
Property Act is applicable to the Hindus, so the transfer of properties in favour of an unborn
person is valid if it fulfills the conditions provided in Section 13.

Transfer in favour of unborn under Muslim Law:

1
AIR 1934 Oudh 35.
In Muslim law a gift in favour of a person not in existence is void, and Section 2 of the Transfer
of Property Act provides that nothing shall be deemed to affect any rule of Mohammedan Law.
So, Section 13 of the Transfer of Property Act, 1882 is not applicable to transfers made by
Muslims.

SECTION-14 RULE AGAINST PERPETUITY

Section 14 of TPA provides that:

"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."

Perpetuity means indefinite period. Rule against perpetuity is the rule which is against a transfer
making the property inalienable for an indefinite period or forever. Where a property is
transferred in such a way that it becomes non transferable in the future for an indefinite period,
the property is tied up forever.

Object of Rule Against Perpetuity

The object of the rule against perpetuity is to ensure free and active circulation of property both
for purposes of trade and commerce as well as for the betterment of the property itself.

A transfer which renders property inalienable for an indefinite period is detrimental to the
interests of its owners who are unable to dispose it of even in urgent needs or for any higher
value.

Principle 
The rule against perpetuity is founded on the general principle of public policy. In absence of
any rule prohibiting creation of perpetuities, there might come a time when almost all the
properties in the country would become static.

The present section, strictly speaking, deals only with the modern rule against perpetuities.

Essential Conditions

The essential conditions of the rule against perpetuity as given in this section are as follows: 

1. There is a transfer of property.

2. The transfer is for the ultimate benefit of an unborn person who it given absolute interest.

3. The vesting of interest in favor of ultimate beneficiary is preceded by life or limited interests
of living person (s).

4. The ultimate beneficiary must come into existence before the death of the last preceding living
person.

5. Vesting of interest in favor of ultimate beneficiary may be postponed only up to the life or
lives of living persons plus minority of ultimate beneficiary; but not beyond that.

Extent of perpetuity

1. Under Section 14, the maximum permissible remoteness of vesting is the life of the last
preceding interest plus minority of the ultimate beneficiary.

2. Accordingly, property may be transferred to A for life and then to B for life and then to the
unborn when he attains the age of majority.

3. A and B hold property successively for their lives, therefore, the property is tied up for their
lives one after the other.
4. After the death of B (the last preceding interest) although it should vest in the ultimate
beneficiary unborn immediately but, under this section the property may be allowed to vest in the
unborn when he attains the age of majority.

5. Minority in India terminates at the age of eighteen years or, when the minor is under
supervision of Court, at the age as twenty-one years.

6. But, in Saundara Rajan v. Natarajan2 the Privy Council held that since at the date of the
transfer it is not known whether or not a guardian would be appointed by Court for the minor in
future, for purposes of Section 14 the normal period of minority would be eighteen years.

7. So, the vesting may be postponed up to the life of the last person (B) holding property for his
life and the minority (18 years) of the ultimate beneficiary. 

Ultimate beneficiary in mother’s womb

1. Where the ultimate beneficiary is in the mother’s womb i.e. it is a child en ventre sa mere, the
latest period up to which vesting may be postponed, (after the preceding interest) is the minority
plus the period during which the child remains in mother’s womb.

2. It may be noted that minority is counted from the date of worldly birth whereas for purposes
of being a transferee, a child in mother’s womb is a competent person.

3. Where the ultimate beneficiary is in mother’s womb when the last person dies, the property
vests immediately in him while he is still in mother’s womb. Therefore, the exact period from
which the minority begins to run is the date when ultimate beneficiary is conceived.

4. Accordingly, the minority up to which the vesting is permitted to be postponed under this
section would include the period during which the ultimate beneficiary remains in womb before
he is born alive. The period during which a child remains in womb after being conceived is
called gestation.

2
AIR 1925 PC 244
5. In India, the maximum possible remoteness of vesting would, therefore, be as under: 
Maximum permissible remoteness of vesting = life of the preceding interest + Period of gestation
of ultimate beneficiary + Minority of the ultimate beneficiary

Exceptions to the Rule against Perpetuities

1. Vested Interests are not affected by the rule, for when an interest has once existed, it cannot be
bed for remoteness. 

2. Gift to charities do not fall within the rule; thus, in case of a transfer for the benefit of the
public in advancement of religion, knowledge; health, commerce, etc., the rule does not apply
(Sec. 18).

3. Property settled upon individuals for memorable public services may be exempted from the
operation of this rule.

4. The rule against perpetuity applies when interest in property is created and has no application
to personal contracts. A contract for sale of property does not of itself create any interest in such
property (Sec. 54).

In Nafar Chandra v Kailash3, the shebiats of a temple agreed to appoint the family of A as pujaris
from generation to generation and make provisions for expenses and remuneration of the office.
The court held that such an agreement is valid and is not affected by the rule against perpetuity. 

5. The rule also does not apply to contracts for perpetual renewal of leases. 

Leading Case: R. Kempraj V M/S Burton Son 7& Co.4 In this case, a lease for 10 years
provided for an option to lessee (tenant) to renew the same for further 10 years as desired on the
same terms.  The lessee, before the expiry of 10 years, wanted to renew lease, but the lesser did
not comply. The lessee filed a suit for the performance of covenant in lease for renewal. The
issue was whether a clause for renewal of lease can be regarded as creating an interest in

3
(1921) AC 328
4
(1970) 2 SCR 140.
property, and thus hit by the rule against perpetuity and, thus, void. The court observed that rule
against perpetuity is founded on the principle that the liberty of alienation shall not be exercised
to its own destruction.

Illustrations

 A’s property is transferred to B for life and after his death, to such son of B as shall first
attain the age of 25 years, B having no son on the date of transfer. Here, the life-estate in
favor of B is perfectly valid ,but the interest created in favor of B’s son is void, as the
vesting of the interest is intended to be postponed beyond the minority of an unborn
Person.
 Property is transferred to A for life, then to B for life, and to such of B’s son as shall
first attain the age of 17 years/ or the 18 years. The transfer is valid. 

DIFFERENCE BETWEEN INDIAN AND ENGLISH LAW

1) The minority period in India is 18 years whereas it is 21 years under English law.

2) The period of gestation should be an actual period under Indian Law but it is a gross period
under English law.

3) Under Indian law, property should be given absolutely to the unborn person whereas in
English law, need not be absolutely given.

4) The unborn person must come into existence before the death of the last life estate holder as
per Indian law whereas he must come into existence within 21 years of the death of the last life
estate holder in case of English law.

Section 15: "Transfer to class some of whom come under sections 13 and 14"

“If, on a transfer of property, an interest therein is created for the benefit of a class of persons
with regard to some of whom such interest fails by reason of any of the rules contained in
sections 13 and 14, such interest fails in regard to those persons only and not in regard to the
whole class”

Property may be transferred for the benefit of a single unborn person or for the benefit of a class
of such persons. In both the cases, the transfer must be made according to the provisions of
section 13 and section 14. Where the transfer is for the benefit of a single unborn and fails under
any of the above section then the transferee i.e. the unborn will not get any property.

According to section 15 when a property is transferred for the benefit of a class of unborn
persons and the transfer fails with regard to only some of them under sections 13 or 14 then the
whole transfer will not be void. It fails only in regard to those transferees who are unable to take
either because of remoteness under section 13 or because of rule of perpetuity under section 14.
The transfer in regard to other transferees in valid and takes effect.

ILLUSTRATION:

A makes a gift of certain properties to B for life and then to X,Y,Z (who are all unborn at the
date of transfer) with a condition that X and Y shall get the property when they attain majority
and Z will get the property when he attains the age of 25 years. The transfer in regard to Z is
invalid but transfer in regard to X and Y is valid and shall take effect.

SECTION 16. 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

Section 16 provides that in a transfer of property if prior (earlier) interest fails inder section 13 or
14 , the subsequent interest also fails. This is a common sense rule and is based on English law
that limitations following upon limitations which are void for perpetuity are themselves void
whether within perpetuity or not. In any transfer of property, if there are two successive creation
of interest one after the other, the later creation would be subject to the validity of the prior
interest.

Example-

A transfers property to B for life then to C for life and then to D absolutely. B is a person living
at the date of the transfer but C and D are unborn persons. The transfer of life interest to C is
void under section 13. Since the prior interest fails the subsequent transfer to D(next unborn)
would also fail even though D’s interest is absolute and is valid under section 13.
This section is only applicable if there is a prior interest and that interest fails under section 13
and 14 but not otherwise.

SECTION 17-RULE AGAINST ACCUMULATION

17. Direction for accumulation.—(1) Where the terms of a transfer of property direct that the
income arising from the property shall be accumulated either wholly or in part during a period
longer than—
(a)   the life of the transferor, or
(b)    a period of eighteen years from the date of transfer,
such direction shall, save as hereinafter provided, be void to the extent to which the period
during which the accumulation is directed exceeds the longer of the aforesaid periods, and at the
end of such last-mentioned period the property and the income thereof shall be disposed of as if
the period during which the accumulation has been directed to be made had elapsed.
(2) This section shall not affect any direction for accumulation for the purpose of—
(i)    the payment of the debts of the transferor or any other person taking any interest under the
transferor; or
(ii) the provision of portions for children or remoter issue of the transferor or of any other
person taking any interest under the transfer; or
(iii)   the preservation or maintenance of the property transferred,
and such direction may be made accordingly.

Section 17 of the act speaks about the accumulation of income of property or direction for
accumulation. A direction for the accumulation of income of property amounts to limiting
beneficial enjoyment of property. Such direction is void as per s.11 of the act but s.17 is an
exception.S.11 is applicable where there are absolute transfers whereas s.17 applies to all kinds
of transfer e.g., A settler by deed directs.

In a transfer of property direction for the accumulation of its income and profits as a separate
fund (so that transferee may not enjoy it) would mean postponing the transferee’s right of
beneficial enjoyment of the property. Under section 17 such accumulation is allowed but not
beyond a specific period.

PERIOD FOR ACCUMULATION ARE:

(i)Life of the transferor or

(ii)Period of 18 years, whichever is longer. Any condition beyond this period is invalid and not
operative. The direction for the whole or part of the income can be made.

The periods are expressed to be in the alternative so that an accumulation cannot be directed
during a combination of two periods. The appropriate period is a question of construction, and is
the one that best accords with the intention expressed in the instruments.

ILLUSTRATION-

 A transfers his properties to B for his life with a direction that the income of said
properties shall accumulate during A’s life and shall also be given to C. the direction of
accumulation of income is valid, upto the life of B.

 A transfers a property to B for life and thereafter to B’s such son first attains the age of
25 years with a direction for accumulation of income till B’s first son attains 25 years.
The direction for accumulation of income is void.

EXCEPTIONS-

(I)- PAYMENT OF DEBTS:

The rule aginst accumulation embodied in the section is not applicable where the purpose of such
accumulation is payment of debts incurred by the transferor or any other person having an
interest in the transfer.

A makes a gift of his house to B with a direction that from the rents of the house B shall pay Rs.
500 per month towards the satisfaction of a debt of Rs. 1 lakh incurred by A. The direction for
accumulation of income is valid even though it continues after the life of A.

(II)- PROVISION OF PORTIONS:

Raising portions means providing for a portion of the income for maintenance. Where the
direction for accumulation of income is for providing portions for the children or remoter issues
of the transferor, or any other person interested in the transfer, the accumulation of income may
exceed the prescribed period. ‘Portion’ ordinarily means a part or share which points to arising of
something out of something less for the benefit of some children or class of children.

(III)- PRESERVATION AND MAINTENANCE:

Income of the property may be directed to accumulate for the maintenance or preservation of the
property transferred.

SECTION 18- TRANSFER IN PERPETUITY FOR BENEFIT OF PUBLIC

The restrictions in sections 14, 16 and 17 shall not apply in the case of a transfer of property for
the benefit of the public in the advancement of religion, knowledge, commerce, health, safety or
any other object beneficial to mankind.

Section 18 incorporates a general exception to the rule against perpetuity and accumulation. Rule
against perpetuity and the rule against accumulation of income prevent the properties from being
tied up for an indefinite duration.

Thus the rule against perpetuity as well as the against accumulation do not apply in the case of a
transfer of property for the benefit of the public. When property is given for an object beneficial
to mankind the intention is that the property shall be used for charitable purposes only, and it is,
therefore, clear , that the subject manner of the gift necessarily becomes inalienable if the charity
is one which may last forever. These are transfer are made for society at large. Such transfers are
made through the medium of religious or charitable trusts.

BIBLIOGRAPHY

 DR. R.K. SINHA, THE TRANSFER OF PROPERTY ACT, CENTRAL

LAW AGENCY,2010

WEBLIOGRAPHY
  “Transfer of Property to an Unborn Person.” Blogspot.Com, 5 Aug. 2016,

thelawstudies.blogspot.com/2016/08/transfer-of-property-to-unborn-person.html.

Accessed 11 Nov. 2019.

 -. “Transfer in Perpetuity for Benefit of Public.” Srdlawnotes.Com, 2012,

www.srdlawnotes.com/2016/05/transfer-in-perpetuity-for-benefit-of.html. Accessed 11

Nov. 2019.

 RAJANI, PREM, and ARADHANA BHANSALI. “A Brief Write-Up On Transfer Of

Property For The Benefit Of Unborn Person And Rule Against Perpetuity - Family and

Matrimonial - India.” Mondaq.Com, 2015,

www.mondaq.com/india/x/366482/wills+intestacy+estate+planning/A+Brief+WriteUp+

On+Transfer+Of+Property+For+The+Benefit+Of. Accessed 11 Nov. 2019.

 GUPTA, SHIVANI. “Transfer of Property to an Unborn Child -

Academike.” Academike, 14 Feb. 2015, www.lawctopus.com/academike/transfer-

property-unborn/. Accessed 11 Nov. 2019.

 JANANI, A.S, and GIRIJA ANIL. Conveying the Direction for Accumulation and Issues

Involved In Partial Accumulation. June 2017.