Introduction
Section 5 of Transfer of Property Act, 1882, lays down the definition of “transfer of property”. It is defined as an act by which a living person conveys property to one or more persons, or to himself and another person and “transfer of property” is to perform such an act. Further, this provision states that a living thing can be a company or a body of individuals, whether incorporated or not, but nothing mentioned here affects any law which is operational in India. Thus reading this section barely, we understand that both the persons should be living. But Section 13 of Transfer of Property Act, 1882, is an exception which states that property can also be transferred to an unborn person. This article is an insight into Section 13 of the Transfer of Property Act, 1882.
Section 13 Of the Transfer of Property Act, 1882
Section 13 states that when a transfer of property to an unborn person takes place, an interest is created in favour of the person at the date of transfer, a prior interest is created in the same transfer and interest created for benefit of such person shall not take effect unless it extends to the whole of remaining interest of the transferor. In simpler terms, it can be said that the immovable property must vest in the hands of a living person between the date of transfer and coming into existence of the unborn person as the property cannot be transferred directly otherwise. Section 13 does not apply restrictions on the successive interest being created in favor of several persons living at the time of operation of the transfer. What is provided as a restriction under section 13 of the Transfer of Property Act, 1882, is the grant of interest, limited by time or otherwise, to an unborn person[1].
Essential Elements Of Section 13 of the Transfer of Property act
- No direct transfer:A direct transfer of property cannot be done to an unborn person as every property requires an owner. If the property is directly transferred to the unborn person, it would lead to a scenario wherein property will have no owner until the unborn person comes into existence.
- Prior interest:If there is a case where there is no creation of a trust, then the estate must be transferred to the person who is living till the date the unborn comes into existence. In simpler terms, the transfer must always be preceded by prior interest created in favour of the living person.
- Absolute interest:The entire property must be transferred to the unborn. There should not be any further transfer from him to any living person. An interest that remains only for a lifetime cannot be transferred to an unborn person.
Under English Law, a property can only be transferred to an unborn person for his lifetime. This rule is subject to restriction known as double possibilities- propounded in Whitby v. Mitchell[2]. According to it, the transfer of life interest to an unborn person would lead to two possibilities-first one being his birth and the second one being the issues of that unborn person. Thus, the transfer of property to an unborn person can be permitted only if the absolute interest is transferred and not just the life estate[3]. For example-if A owns a property that is transferred to B in trust of him and his intended wife successively for their lives; after the death of the survivor, it is to be transferred to the eldest son and after his death to A’s second one.
View of the Apex Court on Section 13
In a famous case Girijesh Dutt v. Datadin,[4]the Supreme Court made some important observations. Facts of this case were that “A” made a gift of her properties to “B” who was her nephew’s daughter. B died without having children and the court held that the transfer of property to an unborn person under Section 13 was not valid as there was limited interest subject to prior interest of “B”. In Raja Bajrang Bhahdur Singh v.Thakurdin Bakhtrey Kuer,[5] it was held that no interest can be created in favour of an unborn person. But if it is a gift to some people in existence and some not in existence, it is valid for the people in existence at the time of the testator’s death.
Sopher’s Case:
In Sopher v. Administrator General of Bengal,[6] a testator directed that his property was to be divided after the death of his wife among all the living children. The income of each share was to be paid to every child and then to the grandchildren until they attained the age of 18 when alone the grandchildren were to be absolutely entitled to the property. The bequest to grandchildren was held to be void as it was contrary to Section 113 of the Indian Succession Act, which corresponds to Section 13 of the Transfer of Property Act.
Ardeshir’s Case:
In Ardeshir v. Duda Bhoy,a person made a settlement that one-third share each of his property would be transferred to his two sons and the trust property will be divided into two equal parts after his death. The net income of each property was to be given to the settler’s sons for life and after their death to their sons absolutely[7]. If both sons died without a male issue, the trust would go to the settler absolutely. The settler then took the power to revoke or vary the settlement in whole or in part for his benefit. It was held that his son’s son did not have any vested interest over the property since he was not born either at the date of settlement or at the time of the death of his grandfather. Another son’s son who was alive at these dates also did not take a vested interest[8].
Applicability of Sopher and Ardeshir Case in India:
These two cases were applied in Framroz Daddabhoy v.Tahmina[9] by the Bombay High Court. In this case, one Bai Tahmina settled a certain amount upon trust in her favor. After her death, and subject to the power of appointment of codicil or will, it would be distributed among her issues born during her lifetime as a trust. The condition here was that the sons must attain the age of eighteen and the daughters must attain the same age or marry under that age to get equal sum. It was held that the decision in the Sopher’s case would not be applicable to inter vivos transfers. It was further held that the words ‘extend to the whole of remaining interest of the transfer or in the property’ in section 13 of the Transfer of Property Act were directed to the extent of the subject matter and to the absolute nature of the estate conferred and not to the certainty of vesting[10].
Difference Between English And Indian Law:
- The minority period under Indian Law is 18 years whereas it is 21 under English Law.
- The period of gestation must be actual period under Indian Law whereas it is gross period under English Law.
- The property must be given absolutely to the unborn under Indian Law but it is not the case under English Law.
- The unborn person must come into existence before the death of the last estate holder whereas it is mandatory for an unborn person to come into existence 21 years after the death of the last estate holder under English Law.
Exceptions:
- Transfer for public benefit:
When a property is transferred to public in general it is considered to be void. For example- advancement of knowledge, religion or anything which is beneficial to mankind.
- Covenants of redemption:
This rule does not offend covenants of redemption in mortgage.
- Personal Agreements.
Agreements that do not create any interest in the property are not affected by this rule. This rule applies only to transfers where there is a transfer of interest[11].
- Pre-emption:
Under this rule, there is an option of purchasing the land and there’s no question of any kind of interest in the property, so this does not apply.
Rule under Hindu and Muslim Law:
Prior to the enactment of Transfer of Property Act, exchange of property as a gift to unborn under Hindu and Muslim Law was void. The position of Muslim Law is the same today. But Hindu Law has made changes through various enactments to make a property gift to unborn valid. There is also a provision under Section 113 of Indian Succession Act which corresponds to Section 13 of TP Act. It permits bequest for the benefit of an unborn person.
Conclusion
From the above cases, it is clear that a property can be transferred to unborn person. The interest must be absolute and prior to the birth of the person the property must be transferred to person who is living because there is mandatory requirement of property to have an owner.
By-
Paras Dargarh
(Symbiosis Law School, Pune)
[1]Transfer of property to unborn person: All you need to know- Medha Tiwari, iPleaders, Oct 21, 2019, available at https://blog.ipleaders.in/transfer-to-unborn-person/
[2] (1889) 42 Ch. Div. 494
[3]Supra note 1.
[4]AIR 1934 Oudh 35
[5]1953 SCR 232
[6](1944) 46 BOMLR 865
[7]Transfer of property to unborn child- Shivani Gupta, Lawctopus, February 14, 2015, available athttps://www.lawctopus.com/academike/transfer-property-unborn/
[8]Supra note 7
[9] (1947) 49 BOMLR 882
[10]Supra note at 7
[11]Supra note 7.
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