Transfer of Property For The Benefit of Unborn Child

General Rule
Section 5 of the transfer of property act provides 1882, provides transfer between the living
persons.

Exception-
There are certain section in this act which lay down certain rules regarding transfer for the
benefit of an unborn person.

Section 13Transfer for the benefit of unborn person-

Where, on a transfer of property, an interest therein created for the benefit of an person not in
the 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 transferor in the property.

Principle underlying Section 13

The principle underlying the rule is that a person disposing of property to another should not
handcuff the free disposition of that property in the hands of more generations than one.
The section provides that there should never be such a person as an unborn one takes for life,
because it is an obvious contingency.

Applicability

Hindu Law and Muslim Law

Under pure Hindu law, a gift or bequest in favor of an unborn was void. But now, since Transfer
of Property Act is applicable to Hindus, the transfer in favor of an unborn person is valid if it is
made subject to the provisions of Section 13 of the Act. 

Since Section 2 of the Transfer of Property Act provides that “nothing shall be deemed to affect
any rule of Mohammedan law”, Section 13 is not applicable to transfers made by Muslims.
However, under Muslim law too a gift in favor of a person not in existence has been held void[1].

Indian Succession Act, 1925

Section 13 is almost identical with section 113, Indian Succession Act, 1925. The difference
between the two sections is that the former relates to transfer inter vivos (between living
persons), while the latter deals with bequest which take effect only on the death of the testator.
Section 13 controls section 113 and, therefore, both these sections should be read together[2].
In Sopher v Administrator-General of Bengal[3] , the Privy Council considered the effect of
Section 113 of the Indian Succession Act in a will which provided for an ultimate bequest in
favor of persons not born at the time of the testator’s death.
Rules underlying Section 13

No direct transfer

Property cannot be transferred directly to an unborn person but property can be transferred for
the benefit of an unborn person. Sec 13 provides that property can be transferred for the benefit
of an unborn person subject to following conditions:

 Transfer for the unborn must be preceded by a life interest in favor of a person existing at
the date of transfer.
 Only absolute interest may be transferred in favor of an unborn person.

Prior life interest

The transfer for the benefit of an unborn person must be preceded by a life interest in favour of
person living person in existence at the date of the transfer. So that such living person holds the
property during his life and till the time the unborn would come in the existence. After the
termination of this life interest the property would pass on ultimately to the unborn person who,
by that time comes into the existence.

Absolute interest
Only absolute interest may be transferred in favor of an unborn person. Limited interest cannot
be given to unborn person. sec 13 says that interest given to an unborn must be the whole of the
remaining interest of the transferor in the property .When a property is transferred in favor of an
unborn person The transferor first creates the life interest and after transferring the property, he
retains with him the remaining interest of the property. After termination of the life interest the
unborn gets the absolute interest in that property.

This has following legal consequences:

 The intermediary person living at the date of transfer is to be given only life interest.
Giving the life interest means giving him a right to enjoyment or possession. He has to
preserve the property like a trustee. After the termination of life interest the whole
property or interest would be given to unborn person who came in existence.
 The unborn must come in existence before the death of the person holding the property
for life. If the unborn person come in the existence after one month he property would be
revert back to transferor or his legal heirs.
 This is obvious because after the termination of life interest, it cannot remain in
abeyance.

Leading Case law

Girivsh Dutt vs. Data Din[5]

a. A made a gift of her properties to her nephew’s daughter, before life and then absolutely B’s
male descendants, if she should have any.
b. But, in the absence of any male child of B, to B’s daughter without power of alienation and, if
B has no descendants male or female then to her (A’s) nephew.

c. B died issueless.

d. The Court held that the gift for life to B was valid as B was a living person at the date of the
transfer.

e. But gift in favor of B’s daughter was void under Section 13 of the Transfer of Property Act
because it was a gift of only limited interest (gift without power of alienation); she had not been
given absolute interest. Further, since this (prior) transfer was invalid, the subsequent transfer
depending on it (i.e. to A’s nephew) also failed.

Illustrations
a. A gives property to B for life, and afterwards to his son (unborn), subject to the condition that
if the son changes his religion, the property should be forfeited. Here the condition regarding
change of religion fetters the estate, and does not therefore comply with Section 13, which
speaks of the whole of the estate.

b. A transfers his properties to X for life and then to Y for life and then to Z for life and
thereafter to the unborn child of Z. Here, X, Y and Z are all living persons in existence at the
date of the transfer. This disposition of property is valid. The property may be given to more than
one living persons successively ‘for life’ before it ultimately vests in the unborn (Z’s unborn
child).