CIT v. Bai Navajbai
Rule established
Interest for unborn person is valid only when created through the same instrument that creates the prior interest
Facts
- A trust deed created interests: income to A for life (prior interest), then capital to A's children (unborn) absolutely
- The question arose whether the requirement of "same transfer" under S.13 was satisfied
Issue
- Whether the prior interest and the interest for the unborn person must originate from the same instrument/transaction for S.13 to apply.
Held
- S.13 requires both the prior interest (in the living person) and the ultimate interest (for the unborn person) to be created by the same transfer. They must form part of one integrated transaction. Separate instruments creating these interests independently would not satisfy S.13.
Ratio Decidendi
The "same transfer" requirement in S.13 ensures that the prior interest and the unborn person's interest are part of one coherent scheme. This prevents manipulation through multiple separate transactions that might individually appear compliant but collectively circumvent the safeguards of S.13-14.
How to use it in an exam
Use when discussing the conditions for valid transfer to unborn person (specifically the "same instrument" requirement). Key line: "Both the prior interest and the unborn person's interest must be created by one and the same transfer."
Source
Source: Mulla TPA 13th ed.
This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.