Transfer for benefit of unborn

person
S. 13 of Transfer of Property Act
 Can there be a transfer to a unborn
Person?
What does Section 5 says?
 "for the benefit of" rather "to an
unborn person"
• Section 13 gives effect to the general rule
that a transfer can be effected only
between living persons

• There cannot be a transfer to a person

who is not in existence or is unborn
 Defn. of Unborn Person
• Unborn Person 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
• Mr. A -------------- Mr.B (life interest)
– ------------------- UB (not Life interest)(absolute
interest)

– When will the Possession of the property be

transferred to UB
– When will the title of the property be transferred to
UB
– Till what time Mr. B will have the possession of the
property
 Procedure u/s 13
• A life estate in favour of living person
needs to be created
• Till the person in whose favour a life
interest is created is alive , he would hold
the possession
• During the lifetime if the person is born ,
the title of the property would
immediately vest in him, but he will get
the possession of the property only on the
death of the life holder
• A -------------- B (life interest)
(Possession)

• ----------------- UB (Absolute Interest) (As

soon as UB is born he will have the title of
the property)
 Situation 1
• A --------- Br(life interest) 1981)
• ---------- UB (absolute) (1985)
• ------------ Br dies in 2000
• From 1985 onwards UB will have the title of the
property
• Br will have the possession of the property till
2000
• From 2000 onwards, UB will have the
Possession of the property
 Situation 2
• A----------------Br (life interest)
• ------------- UB absolute interest
• -----------UB born in 1985
• ----------- UB dies in 1987
• --------- Br alive till 2000
• After the death of Br, the property will go
the legal heirs of UB
• So, if life interest is created in favour of B
then C and then D and then to B's unborn
child(UB) , when will UB receive that
property?
 Can life interest be created in
favour of more than one person?
• Yes
• After D's Death , the possession would go
to UB
• However he should have come into
existence by then
• If he is not there, the property would revert
back to A, if he is alive else to his heirs
• What is meant by "life interest cannot be
created for the benefit of an unborn
person"
• It meant that transferor must convey to the
unborn person , whatever interest he had
in the property, without retaining anything
with him
 Problem
• A life estate is created by A in favour of his
friend B and a life estate for the benefit of
B’s unborn first child UB1 and then
absolutely to B’s second Child UB2

• Whether the transfer to UB2 can take

effect?
• No Why?
• A  B (Life Interest)
 UB1 (Life Interest)(cannot take effect)
 UB2 (Absolute Interest)
As transfer to UB2 is dependent on a void
transfer that cannot take effect in law
 Problem
• In the previous e.g. if UB1 dies before B
and UB2 is alive then can the transfer to
UB2 is possible?
• The transfer for the benefit of UB2 will not
take 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
 Problem
• A life estate is created in favour of S and
an absolute interest in favour of the
unborn sons of S.
• Before the birth of Sons, S executed a
relinquishment deed w.r.t his share in
favour of his father.
• Whether the transfer in favour of the sons
of S is valid
J V Satyanarayana v. Pyboyina
Manikyan AIR 1983 AP 139
• In this case law the AP high court had held
that transfer in favour of the sons was
valid and unaffected by the relinquishment
deed executed by S
Section 14: Rule against Perpetuity
• Reading S.13 along with S.20
• When an interest as per S. 13 is created in
favour of unborn person,
• Vesting of Interest takes place at his birth
• However as per S.14 this vesting can be
extended
• Till what point of time, vesting of interest
to an unborn person can be extended?

• Lifetime of one or more living person +

minority of an unborn person
 Ram Newaz v. Nankoo AIR
1926 ALL 283
• A transfers property to B barring 2 bighas
of land
• With respect to this 2 bighas of land A has
made the following arrangement:
a) This 2 bigha is to be devolved to his son
and then his son’s unborn son and then to
future descendants
b) If no descendants are there then the
property is to go to the vendee
• After the death of A the property came to
A’s Son, who did not have any child

• After the death of A’s Son, vendee laid the

claim to the 2 bighas of the property
 Contention of the reversioner
• The reversioners argued that the
arrangement is hit by S.13 and S.14 and
thus void
 HC judgment
• The court held that this was a condition
repugnant to the law

• The vendee could not set up this

document as entitling them to possession
of the property.
• Whether there is a violation of the rule
against perpetuity or not is to be seen from
the terms and conditions as they appear
on paper and not what actually had
happened

• The court decided in the favour of

reversioners
 Ram Baran Prasad v. Ram
Mohit Hazra AIR 1967 SC
• The Property was partitioned between the
2 brothers T and K
• Pre-emption clause was in each other’s
(Brothers) favour
• T Sold to NNG abiding Preemption clause
• K sold to RRM abiding Preemption clause
• RRM sold to X (Plaintiff)
• NNG sold to D1 (Defendant no. 1)
• D1(Defendant no. 1) sold to
D2( Defendant no.2)
 Relief Plaintiff Seeking
• Plaintiff  Relief  invoking Pre-emption
Clause

•
 Contention of Defendant
• Covenant of Pre-emption was merely a
personal covenant b/w contracting parties
and not binding to the assignees of the
original parties

• Covenant of Pre-emption is hit by Rule

against Perpetuity
 Issue
• Whether the covenant of pre-emption
offends the rule against perpetuities and is
therefore void

• Whether the condition of pre-emption can

be enforced by the third party
 Court’s Observation
• The rule against perpetuities is not
concerned with contracts as such or with
contractual rights and obligations as such

• Rule of perpetuity concerns right of

property only and does not affect the
making of contract which do not create
rights of property
• The rule does not therefore apply to
personal contracts which do not create
interest in property
 Important Sections
• S.54 of TPA states that a contact for sale
of immovable property “ does not of itself
create any interest in such property”

• S.40 of TPA  Second Para

 2 propositions u/s 40
• Contract of sale does not create any
interest in the land but is annexed to the
ownership

• The obligation can be enforced against a

subsequent gratuitous transferee from the
vendor or a transferee for value but with
notice
• Reading S.14 along with S.54 of TPA it is
manifest that a mere contract for sale of
immovable property does not create any
interest in immovable property

• It therefore follows that rule of perpetuity

cannot be applied to a covenant of pre-
emption
R. Kempraj v. Burton Son & Co
AIR 1970 SC 1872
• A lease was executed by A in favour of B

• Clause  Renewal option to B after every

10 years in perpetuity
• After 10 years B exercised the option for
renewal
• Upon A’s failure to execute the same, B
sought the court’s help in issuing a
direction to A to execute a registered lease
deed in his favour
 Contention of A
• Condition relating to the renewal was hit
by rule against perpetuity and therefore
was not binding on him
 Court’s Observation
• The stipulation relating to renewal could
not be regarded as transferring property or
any rights therein
 SC judgment
• It was held that s.14 is applicable only
when there is transfer of property and the
clause containing renewal after every 10
years can by no means be regarded as
creating an interest in property of the
nature that would fall within the ambit of
s.14