Good afternoon everyone, the topic for my presentation is rule against perpetuity: A

COMPARATIVE STUDY OF INDIAN AND ENGLISH LAW.

Firstly going with the introduction…

Introduction

Rule against perpetuity has been dealt under section 14 of Transfer of Property Act, 1882.
Perpetuity simply means “indefinite Period”, so this rule is against a transfer which makes a
property inalienable for an indefinite period.

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.
How Perpetuity May Arise?
Perpetuity may arise in two ways –
I) by taking away from transferee his power of alienation (such a condition has been made
void under S.10 of the Act)
II) by creating future remote interest (which has been prohibited under S.14 of the TP Act)

here, S.14 provides that in a transfer of property, vesting of interest cannot be

postponed beyond the life of the last prior interest holder and the minority of the
ultimate beneficiary.

Essential Ingredients of the Section

The following ingredients must be present to attract the provisions of Section. 14 –
·There must be a transfer of property.
·The transfer should be to create an interest in favour of an unborn person (i.e. ultimate
beneficiary).
·The vesting of interest in favour of the unborn must be preceded by life or limited interest of
living person/s (i.e. prior interest holder).
·The unborn person must be in existence (either in the mother’s womb or born) at the
expiration of the interest of the living person/s

If all the above ingredients are present then the vesting of the interest in favour of the
ultimate beneficiary may be postponed only up to the life or lives of living persons plus the
minority of the ultimate beneficiary but not beyond that.1

Difference between Indian and English Law:

Under English law, vesting of interest may be postponed up to the life or lives of last person
plus a period of 21 years irrespective of the age of minority of ultimate beneficiary.

1
Ibid
By an amendment, the rule in England has now been modified by Section 163 of the Law of
Property Act, 1925 which provides that a transfer shall not be void even if the vesting has
been postponed beyond 21 years but it shall take effect as if the age of 21 had been
substituted for the age specified in the instrument, (which may be any fixed period longer
than 21 years).

In India, Section 14 provides that vesting can be postponed up to the life or lives of the last
person plus the minority of the ultimate beneficiary.

Minority in India ends at the age of 18 years. After the existing life or lives, vesting cannot be
postponed in India beyond 18 years in any circumstance.

Exceptions to the Rule against Perpetuities

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).

6. The rule also does not apply where only a charge is created, which does not amount to
transfer of any interest. However, in the absence of a charge, payment of income to a payee
from generation to generation is void as offending the rule against perpetuity.

7. A covenant of redemption in a mortgage does not offend the rule.

8. Covenant for pre-emption in respect of land, unrestricted in point of time do not offend the
rule against perpetuities.

Some case laws for these are Nafar Chandra v Kailash, R. Kempraj V M/S Barton Son & Co.
and Ganesh Sonar v P.Narayan

Conclusion

Therefore S.14 provides a rule against perpetuity i.e. a rule against remoteness of vesting, in
absence of which the society shall definitely suffer a loss because of the stagnation of the
properties. It would cause great hardship in the easy enforcement of law which shall be
detrimental to trade, commerce, intercourse and may also result into the destruction of the
property itself.

So this rule against perpetuity ensures free and active circulation of property both for the
betterment of the property as well as for the betterment of the society at large.