Rule
S.13 to S.18 govern transfers for the benefit of persons not born at the date of transfer. Property cannot be transferred directly to an unborn person. It can be given to a living person first, with the unborn person taking afterwards, but only within two limits:
- The unborn person must get the whole remaining interest of the transferor (S.13).
- The interest must vest within the perpetuity period: the lives of persons living at the transfer plus the minority of the person who is to take (S.14).
A transferor should not control property through generation after generation of unborn people. That would freeze the property, take it out of commerce and leave its ownership uncertain for decades. S.13 and S.14 stop the chain.
| Provision | Subject |
|---|---|
| S.13, TPA | Transfer for the benefit of an unborn person: must comprise the whole remaining interest |
| S.14, TPA | Rule against perpetuity |
| S.15, TPA | Class gift: fails only as to members caught by S.13 or S.14 |
| S.16, TPA | Interest meant to take effect after, or on failure of, an interest void under S.13 or S.14 also fails |
| S.17, TPA | Direction to accumulate income: void beyond the transferor's life or 18 years from the transfer, whichever is longer (with exceptions for debts, portions for children and preserving the property) |
| S.18, TPA | S.14, S.16 and S.17 do not apply to transfers for the benefit of the public |
| S.20, TPA | An unborn person acquires a vested interest on birth |
Requirements
| # | Condition | Explanation |
|---|---|---|
| 1 | A prior interest is created by the same transfer | A living person must take first (for example, a life interest) |
| 2 | The unborn person takes the whole remaining interest | Not a life interest or any limited estate (S.13) |
| 3 | The unborn person must be born before the prior interest ends | His interest vests on birth (S.20) |
| 4 | The interest must vest within the perpetuity period | Lives in being plus the beneficiary's minority (S.14) |
The rule is tested on possibility, at the date of the transfer. If there is any chance that the interest will vest outside the period, it is void, even if in fact it would have vested in time. Indian law does not "wait and see".
The whole-interest rule (S.13)
Where an interest is created for a person not in existence at the date of transfer, subject to a prior interest created by the same transfer, it takes effect only if it extends to the whole of the remaining interest of the transferor. The illustration to S.13: a gift to A and his intended wife for their lives, then to their eldest son for life, then to A's second son. The eldest son's interest fails because it is only a life interest.
If an unborn person could get only a life estate, followed by another estate to another unborn person, property could be locked up for generations. Giving the whole remaining interest to the unborn person makes him the absolute owner, and the chain stops with him.
| Transfer | Valid? | Reason |
|---|---|---|
| "To A for life, then to A's first-born son absolutely" | Valid | Prior interest (A's life) + whole interest to unborn (absolute) |
| "To A for life, then to A's first-born son for life" | Invalid | Unborn gets only life interest, not whole remaining interest |
| "To A for life, then to B for life, then to A's first child absolutely" | Valid | Multiple prior life interests to living persons are permitted; unborn gets the whole remainder |
| "To A for life, then to A's first child for life, then to A's grandchild absolutely" | Invalid | A's child gets only a life estate (S.13), and the grandchild's gift depends on it, so it fails too (S.16) |
| "To A for life, then to A's son absolutely, but if A's son dies without issue, then to B" | Valid if the son is alive at the transfer; doubtful if he is unborn | A living son is outside S.13. For an unborn son, an absolute gift cut down by a gift over may not be the "whole remaining interest" (Sopher v Administrator General of Bengal) |
Rule against perpetuity (S.14)
No transfer can create an interest that is to take effect after the lifetime of one or more persons living at the date of the transfer and the minority of some person who is in existence at the end of that period and to whom the interest is to belong if he attains full age.
Maximum period = lives of persons living at the transfer + 18 years (the minority of the person who is to take).
| Element | Meaning |
|---|---|
| Life in being | One or more living persons at the date of transfer (the life tenants) |
| Minority of the ultimate beneficiary | 18 years (Indian Majority Act, 1875) |
| Must vest within this period | The unborn person must be born AND the interest must vest before the deadline |
| Void if it may exceed | The remote interest is void; prior interests survive; later interests dependent on it also fail (S.16) |
Without this rule a transferor could write "to my son for life, then to my grandson for life, then to my great-grandson for life" and so on. Each generation would be unable to sell. S.14 makes sure the unborn person becomes absolute owner within one lifetime and his minority.
Illustrations
1. Valid gift to an unborn child
- Facts: A transfers his house "to my wife W for life, and after W's death to the first child of W and myself absolutely". They have no children yet.
- Result: Valid.
- Why: The child takes the whole remaining interest (S.13) and must be born during W's lifetime, so vesting is within the period (S.14).
2. Unborn child given only a life estate
- Facts: A transfers "to my wife W for life, then to our first child for life, then to our first grandchild absolutely".
- Result: The child's life interest is void. The grandchild's interest also fails. After W's death the property reverts to A.
- Why: The child does not get the whole remaining interest (S.13), and the grandchild's gift depends on it (S.16).
3. Grandson who must reach 25
- Facts: A transfers "to my friend B for life, then to the first grandson of B who attains 25". B has a 5-year-old son and no grandson.
- Result: Void for perpetuity.
- Why: The grandson may be born long after B's death and then must reach 25, which can be well beyond B's life plus 18 years (S.14).
4. Several life interests to living people
- Facts: A transfers "to B for life, then to C for life, then to the first child of C absolutely". B and C are alive.
- Result: Valid.
- Why: Successive life interests to living persons are allowed. C's child takes the whole interest and must be born in C's lifetime.
5. Son who must reach 18
- Facts: A transfers "to B for life, then to B's first son who attains 18". B is 30 and unmarried.
- Result: Valid.
- Why: Any son of B is born in B's lifetime and attains 18 within B's life plus his minority (S.14).
6. The perpetuity rule is not "wait and see"
- Facts: A transfers "to W for life, then to the first of W's grandchildren to attain 21, absolutely". W has no children yet. As it happens, W lives long and her first grandchild turns 21 while W is still alive.
- Result: The gift to the grandchild is still void. W's life interest stands, and the property reverts to A after W's death.
- Why: At the date of transfer it was possible that the grandchild would turn 21 more than 18 years after W's death, beyond the period in S.14. Validity is judged on what might happen, not on what did happen.
7. No unborn person ever comes into existence
- Facts: A transfers "to B for life, then to the first son of C absolutely". C is alive and childless. B dies, and C later dies without a son.
- Result: After B's death the property reverts to A or his heirs.
- Why: The gift is valid in form, but no one ever came into existence to take it.
Key Cases
Tagore v Tagore (1872) 9 Beng LR 377 (Privy Council)
- Facts: Prasanna Kumar Tagore's will gave his estate to a series of male heirs, including persons not born at his death, in the manner of an English estate tail.
- Held: Under Hindu law a gift must be to a person in existence and capable of taking at the testator's death. The gifts to unborn persons and the estate tail were void.
- Principle: Before the TPA and the Hindu Transfers and Bequests Acts, Hindu law did not allow gifts to unborn persons. S.13 and S.14 now allow them within strict limits.
Sopher v Administrator General of Bengal AIR 1944 PC 67
- Facts: A testator left income and later the corpus to grandchildren not born at his death, on terms that they survive their father and attain 18.
- Held: The gifts were void under S.113, Indian Succession Act. A gift to an unborn person that is subject to survivorship or another contingency does not dispose of the whole remaining interest.
- Principle: "Whole remaining interest" means an absolute interest not cut down by conditions. The same rule appears in S.13 TPA for transfers inter vivos.
Distinctions
| Basis | Transfer to Unborn (S.13) | Transfer to Living Person |
|---|---|---|
| Interest permitted | Only the WHOLE remaining interest (absolute) | Any interest (life, term, absolute) |
| Prior interest needed | Mandatory (life interest to living person precedes) | Not required |
| Perpetuity rule (S.14) | Applies strictly | Does not apply (living persons take immediately) |
| Vesting | Must vest within life in being + minority | Vests immediately or as agreed |
| Example | "To A for life, then to A's child absolutely" | "To A absolutely" or "To A for life" |
| If invalid | The interest to the unborn and any interest dependent on it fail (S.16); the prior interest survives | Not applicable |
| Limitation | Cannot create successive interests in multiple unborn persons | Can create successive interests in living persons |
| Basis | S.14 (Indian Rule Against Perpetuity) | English Common Law Rule |
|---|---|---|
| Maximum period | Life in being + minority of the beneficiary (18 years) | Life in being + 21 years (gestation allowed) |
| "Wait and see" | NOT applied; test at date of transfer | Applied (post-1964 Act) |
| Applicability | S.14 TPA (transfers inter vivos) and S.114, Indian Succession Act (wills); not to transfers for public benefit (S.18) | All dispositions |
| Measuring lives | In practice the prior life tenants under the same transfer | Any lives in being (royal lives clause) |
| Effect of violation | Remote interest void; prior interests survive; dependent later interests fail (S.16) | Similar |
Exam Scenario
A transfers property "to my wife W for life, then to my daughter D for life, then to the first child of D for life, then to the first grandchild of D absolutely". W and D are alive. D has no children. Examine each interest.
Approach
- Met: W's life interest is valid. She is a living person.
- Met: D's life interest is valid. Successive life interests to living persons are allowed.
- Not met: D's first child is unborn and gets only a life interest, not the whole remaining interest. Void under S.13.
- Not met: The grandchild's gift is meant to take effect after the void interest, so it fails (S.16). It would also break S.14: it may vest only after the life of an unborn child.
Conclusion: Only W's and D's life interests are valid.
Remedy: After D's death the property reverts to A or his estate.
Scenario 2
A executes a trust deed giving his farm "to B for life, then to B's eldest son for life, then to B's eldest grandson absolutely". B is alive and has no children. Would the answer change if the deed said "to B for life, then to B's eldest son absolutely"?
Approach
- Met: B's life interest is valid.
- Not met: B's eldest son is unborn and gets only a life interest. Void under S.13.
- Not met: The grandson's gift depends on the void interest and fails (S.16). It might also vest after the son's lifetime, outside S.14.
- Met (second version): "To B's eldest son absolutely" gives the unborn son the whole remaining interest, and he must be born in B's lifetime. Valid under S.13 and S.14.
Conclusion: In the first deed only B's life interest is valid. In the second, the whole deed is valid.
Remedy: Under the first deed the farm reverts to A or his heirs on B's death.
Recall Check
- Under S.13, what must the unborn person receive for the transfer to be valid?
- What is the maximum period within which an interest to an unborn person must vest under S.14?
- If a transfer to an unborn person is void for perpetuity, what happens to the prior life interest?
- What does S.16 do to an interest that follows a void interest?
Flashcards
What does S.13 TPA require for a valid transfer to an unborn person?
The unborn person must receive the WHOLE of the transferor's remaining interest in the property. A limited estate (life interest, term of years) to an unborn is void.
What is the rule against perpetuity under S.14?
No transfer can create an interest that is to take effect after the lifetime of one or more persons living at the date of transfer and the minority of some person who is in existence at the end of that period and to whom the interest is to belong if he attains full age.
Can a life interest be given to an unborn person?
No. Under S.13, the unborn must receive the absolute/whole remaining interest. A life interest to an unborn violates S.13 and is void.
If a transfer to an unborn person violates S.14, what happens to the prior life interest?
The prior life interest to the living person stays valid. The remote interest is void, and any later interest in the same transaction that depends on it also fails (S.16).
Does Indian law apply the "wait and see" principle for perpetuity?
No. Validity is judged at the date of transfer on what may possibly happen. If the interest might vest outside the period it is void, even if in fact it would have vested in time.
Can multiple prior life interests be given to living persons before the unborn takes?
Yes. "To A for life, then to B for life, then to C's first child absolutely" is valid if A, B, and C are alive at transfer and the child gets the whole interest.
What is the maximum permitted vesting period under S.14?
The life of the prior interest holders living at the date of transfer, plus the minority (18 years) of the person who is to take.
Under S.13, what kind of interest must be created for an unborn person?
The whole of the remaining interest of the transferor (absolute interest).
Can property be transferred directly to an unborn person under TPA?
No. A prior interest must first be created in a living person by the same instrument.
What is the perpetuity period under S.14?
The lifetime of one or more persons living at the date of transfer, plus the minority (18 years) of the ultimate beneficiary.
What happens if a transfer violates S.14?
The interest that was to take effect beyond the perpetuity period is void.
Under S.15, what happens when property is transferred to a class where some members exist and some are unborn?
The interest fails only for those members of the class for whom it breaks S.13 or S.14. It is good for the other members (S.15).
What does S.16 provide?
If an interest fails because of S.13 or S.14, any interest created in the same transaction that is meant to take effect after it, or on its failure, also fails.