QQQ.
"Transfer of Property Act applies to transfer inter Vivos, but transfer for the benefit
of an unborn person is an exception to this rule." Discuss.
QQQ. Discuss the law relating to the transfer of property made for the benefit of unborn
person.
Alienating the property = Alienation is the voluntary act [owner of property transfers it
willingly] of an owner of some property to dispose of the property
Introduction
Section 5 of the TOPA, 1882, establishes the general rule for transfers, emphasizing
transactions between living persons. However, exceptions to this rule are outlined in
specific sections of the act, particularly those addressing transfers for the benefit of unborn
persons. These exceptions, such as those outlined in Section 13, introduce distinct rules and
conditions governing property transfers with the well-being of future generations in mind.
Section 13 of TOPA establishes conditions for transferring property for the benefit of an
unborn person. It mandates that, to facilitate such a transfer, a prior interest must be
created in favor of a living person before extending it to the unborn beneficiary. This
prerequisite prevents a direct transfer to the unborn person and ensures that the interest
granted to them encompasses the entire remaining interest of the transferor.
The section aims to maintain the unobstructed flow of property disposition across
generations, restricting the creation of time-limited interests solely for unborn individuals.
While successive life interests can be granted to living beneficiaries, absolute interests are
required for those not yet born.
Definition of Unborn Person
An unborn person refers to an individual who is not in existence, even within the mother’s
womb. This term includes (covers) those yet to be conceived or currently in the prenatal
stage. A child in the mother’s womb, often referred to as a child “en ventre sa mere,” is
considered a competent transferee under this classification.
Requirements for Transfer to Unborn Person
No Direct Transfer:
A transfer cannot be directly made to an unborn person. Such a transfer can only be
brought into existence by the mechanism of trusts. It is a cardinal principle of property law
that every property will have an owner. Accordingly, if a transfer of property is made to an
unborn person, it will lead to a scenario wherein the property will remain without an owner
from the date of transfer of property till the date the unborn person comes into existence.
Prior Interest:
If the circumstances are such that there is no creation of trust, then in that case, A transfer
to benefit an unborn person must be preceded (headed, led, come first) by a prior interest
created in favour of a living person between the date of transfer and the unborn person’s
existence.
Absolute Interest:
The entire property must be transferred absolutely to the unborn person, preventing any
further transfer. English law’s rule of “double possibilities” restricts conferring (granting)
only a life interest to an unborn person; hence, an absolute interest is required to comply
with Section 13.
Before the death of last life estate holder:
The unborn person must come into existence before the death of the last life estate holder.
It is not necessary that he should be born, even if he is in the mother's womb that is
enough. A child “en ventre sa mere” is equal to child in essence meaning a child in the
mother's womb is equal to a child in existence.
Legal Consequences of Transfer for the Benefit of Unborn Person
Life Interest for Intermediary: The intermediary, living at the transfer date, is granted a
life interest, conferring the right to possession and enjoyment while acting as a trustee
for property preservation.
Property Reverts to Unborn Person: Upon termination of the life interest, the entire
property or interest transfers to the unborn person, contingent on their existence
before the life holder’s demise.
Time Constraint for Unborn Person: The unborn person must come into existence
before the life holder’s death; otherwise, the property reverts to the transferor or their
legal heirs, as post-life interest, it cannot remain in abeyance.
Applicability of Section 13 in Hindu and Muslim Law
Under pure Hindu law, a gift or bequest in favor of an unborn person was traditionally
considered void. However, with the applicability of the TOPA to Hindus, such transfers are
now valid if made in accordance with the provisions of Section 13 of the Act.
In contrast, Section 2 of the TPA explicitly states that it does not affect any rule of
Mohammedan law, rendering Section 13 inapplicable to transfers made by Muslims.
Illustration:
A transferred gift to B, Nephew daughter. Then to B's male descendant.
In absence of B's male child, then to B's daughter (limited interest was created) and in
absence of any of B descendant(male/female), then to A's Nephew.
B dies issueless,
Gift in favour of B was valid but gift made in favour of B's daughter was void as limited
interest was created and according to section 13, interest created in favour of unborn
person should be absolute interest.
Further subsequent transfer to A's nephew will also fail as per section 16 (Transfer to
take effect on failure of prior interest) of Transfer of Property act, 1882
