Transfer for benefit of unborn person [Section 13]

Section 13 of the Transfer of Property Act lays down that where property is
transferred for the benefit of (a person not in existence on the date of the transfer)
an unborn person subject to a prior interest created by the same transfer, the
transfer in favour of the unborn person shall not take effect unless it extends to the
whole of the remaining interest of the transferor in the property.
No Direct Transfer to an unborn person:
Transfer cannot be made directly to an unborn person, because the definition of
transfer of property in Section 5 provides for transfer of property by a living
person to another living persons.Transfer of property to an unborn person can only
be made by the machinery of trusts. This is the reason that Section 13 inserts the
words “ for the benefit of unborn person.” The trustee holds the property for the
benefit of the unborn person.
Subject to a prior interest—The estate must vest in some person between the date
of the transfer and the coming into existence of the unborn person. The interest
of the unborn person must therefore be in every case preceded by a prior interest.
Absolute interest:
The section further says that the interest of the unborn person must be the whole
remainder so that it is not impossible to confer an estate for life on an unborn
person. In the illustration to the section the interest created for the benefit of the
unborn eldest son is only a life interest and it therefore fails.
Difference between English and Indian Law:
In England, prior to 1925 the Rule Against Double Possibility was applicable which was
propounded in Whitby vs. Mitchell (1890) 44 Ch. D. 85. According to this rule, in
England it was permissible to create life interest to an unborn person but not to his issue.
However, the Rule Against Double Possibility has been abolished by Section 161 of the
Law of Property Act, 1925. In English law now the vesting of interest may be postponed
till 21 years in gross after the life of one or more persons living on the date of transfer.
Illustrative Cases on Section 13:
(i) Girijesh Dutt vs. Data Din (1934) 9 Luck 329
In this case, A, a lady made a gift of her property to her nephew’s daughter B for life and
then to her male descendants absolutely and in absence of any male descendant to her
daughter (B’s daughter) for life without power of alienation and thereafter to B’s nephew
(Datadin). B died without issue. The transfer to the unborn daughters, being of a limited
Interest was held invalid under Section 13 and the gift to the nephew therefore failed
under Section 16.
(ii) Javvadi Venkata Satyanarayana vs. Pyboyina Manikyam and others AIR 1983 A.P.
139
In this case, M, by a settlement deed gave life interest in a property to his son G and then
to his unborn issues absolutely. Before birth of any child, G relinquished his all interest
in the property in favour of M. It was held, that interest in favour of G’s son being a valid
transfer did not fail as G could relinquish only his life interest .