TRANSFERS TO UNBORN

PERSONS
 WHO IS AN UNBORN PERSON?

UNBORN PERSON (UBP) = Person not in

existence on the date of transfer

Child en ventre de sa mere = child in the

mother’s womb = person in existence;
 RULE AGAINST DOUBLE
POSSIBLITY

Laid down in “Whitby v. Mitchell”

A ------Transfers to B (bachelor) for life ----- to son of B

(UBP) for life ----- UBP’s son
ENGLISH LAW INDIAN LAW
• Last transfer only void • Transfer to both UBP and
his son void
• Why? S. 13
 NO
DIRECT
VESTING TRANSFER
CANNOT BE
DELAYED PRIOR
INTEREST
BEYOND
PERIOD OF
Conditions
PERPETUITY for transfer
to UBP
VESTING UBP TO BE IN
OF WHOLE EXISTENCE AT
INTEREST THE END OF
LIFE ESTATE
 WHY THERE CANNOT BE
DIRECT TRANSFER TO UBP?
 Wouldn’t be a transfer b/w living persons;

The vesting of property would be delayed till the

birth of the person;

Law favors vesting of property;

 WHY WHOLE INTEREST MUST
BE GIVEN?
If granting of partial interest is permitted then the property
would be locked up for generations and would prevent free
disposition of property;

Permit control by “dead hand”;

May result in double possibility.

 TRANSFER FOR BENEFIT OF
UNBORN PERSON (S. 13)
Where, on a transfer of property, an interest therein is created for the
benefit of a person not in existence at the date of the transfer, subject to a
prior interest created by the same transfer, the interest created for the
benefit of such person shall not take effect, unless it extends to the whole
of the remaining interest of the transferor in the property.
A transfers property of which he is the owner to B in trust for A and his
intended wife successively for their lives, and, after the death of the
survivor, for the eldest son of the intended marriage for life, and after his
death for A’s second son. The interest so created for the benefit of the
eldest son does not take effect, because it does not extend to the whole of
A’s remaining interest in the property.
RULE AGAINST PERPETUITY
(S.14)
 OBJECT OF RULE AGAINST
PERPETUITY
Prohibits delaying the vesting of property for an
infinitely long time as the same would prevent alienation;

Property can be tied up only for one generation;

Transfer to UBP must vest within the period of

perpetuity;
 PERIOD OF PERPETUITY
Period of perpetuity (PoP) = maximum period within which
property must vest = life/s + period of maturity i.e. 18 years.
 CALCULATING PERIOD OF
PERPETUITY
A B for life C for life
C’s child on his birth;

A B for life B’s child on his attaining

18 years of age
At time of B’s death B’s child = 9 y.o.
CONTI..
A B for life B’s son 18 years after
the death of B
At the time of B’s death B’s son = 5 y.o.
 RULE AGAINST PERPETUITY
(S.14)
No transfer of property can operate to create an interest
which is to take effect after the life-time of one or more
persons living at the date of such transfer, and the
minority of some person who shall be in existence at the
expiration of that period, and to whom, if he attains full
age, the interest created is to belong.
1. A UBP
B
2. A For Life UBP

3. A B for life UBP for life UBP’s

child
 GIRISH DUTT & ORS. V. DATA
DIN & ORS.
AB FAMILY TREE

BROTHER (B) SISTER (OWNER “O”) O’s Husband

BROTHER (B)
DAUGHTER (D) D’s Husband (DH)

UBP SON/S(GS) UBP DAUGHTER (GD)

CONTI…
O Wills certain property to D for Life & thereafter:
1. If D has son/s to GS absolutely.
2. If D only has daughter/s then GD only to get life
interest;
3. If D has no children, then to B, if alive
4. If D has no children, and B is dead, to B’s heirs
ISSUE
Whether the gift to B was valid or void, given that
the prior interest (condition 2) was void?

It is void by reason of S.16

  TRANSFER TO TAKE EFFECT ON
FAILURE OF PRIOR INTEREST. (S.16)
Where, by reason of any of the rules contained in
sections 13 and 14, an interest created for the
benefit of a person or of a class of persons fails in
regard to such person or the whole of such class,
any interest created in the same transaction and
intended to take effect after or upon failure of such
prior interest also fails.
DIFFERENCE B/W ENGLISH &
INDIAN LAW
ENGLISH LAW INDIAN LAW
• Period = life + 21 years; • Period = life + minority
• 21 years is taken in gross; of UBP
• Property need not be given • 18 years is not taken in
absolutely to the UBP; gross;
• Property must be
absolutely given;
 TRANSFERS TO CLASS OF
PERSONS
Deals with transfers created for the benefit of a class of
persons; and

Interest fails with regard to some only;

Failure of such interest by virtue of S.13 & S.14;

 LEAKE V. ROBINSON
Grandfather (GF) creates trust in favour of Grandson (GS)
through Will;

 Thereafter, to the child of GS. In case GS has no children,

to the siblings of GS who would take after they attain the
age of 25 years;

GS had total 8 siblings. At time of GF’s death = 5 alive. 3

born after GF’s death and hence, would violate rule of
perpetuity.
CONTI..
Issue: Whether effect should be given to the Will of
Testator?

Held: No, as it would have the effect of rewriting the Will.

English Law: If an interest is created in favour of a class

of persons, and it fails w.r.t some by reason of it being in
violation of rule of perpetuity, then the same would fail w.r.t
to the entire class.
 INDIAN POSITION
Different from that of English law;

Interest would not fail for the entire class, but only w.r.t
to the concerned persons.
 TRANSFER OF
PROPERTY

UNCONDITIONAL CONDITIONAL

CONDITION CONDITION
PRECEDENT SUBSEQUENT

• Alienation (S.10)
• Mode of enjoyment (S.11)
• Insolvency (S.12)
• Accumulation of income (S.17)
 DIRECTION FOR
ACCUMULATION (S.17)

Transfer with a condition that income from property is to

kept separate is direction for accumulation;

Has effect of tying up property and postponing enjoyment;

 Condition is void as it violates S. 11 and also, violates rule

of perpetuity;
 DIRECTION REQUIRING
ACCUMULATION

For period LONGER THAN For period LONGER THAN 18 YEARS

LIFE OF TRANSFEROR FROM THE DATE OF TRANSFER

DIRECTION = VOID ONLY W.R.T PERIOD BEYOND

THE ABOVE SPECIFIED PERIOD
CONTI..
 A transfers property to B in 1940 with a direction
that income arising out of the property is to be
accumulated till 1970.
A dies in 1965
Decide whether the transfer is valid.
CONTI…
 A transfer property to B for life and thereafter, to the UB son of
B. A further directs that the income from the property shall be
accumulated till B attains the age of 18 years.

Determine whether such a condition is valid.

 EXCEPTION TO S.17
1. the payment of the debts of the transferor or any other
person taking any interest under the transferor;

2. the provision of portions for children or remoter issue of

the transferor or of any other person taking any interest
under the transfer;

3. the preservation or maintenance of the property

transferred, and such direction may be made according.
 TRANSFER IN PERPETUITY FOR
BENEFIT OF PUBLIC
S.18
Rule against perpetuity, rule stating that failure of
prior interest results in failure of subsequent interest
and direction for accumulation are not applicable in
cases where property is transferred for the benefit
of public.
TRANSFERS WITH
CONDITIONS
 TRANSFER OF
PROPERTY

UNCONDITIONAL CONDITIONAL

CONDITION CONDITION
PRECEDENT SUBSEQUENT
• To be performed before • To be performed after property
vesting; is vested;
• Non fulfillment = no vesting; • Non fulfillment = divesting of
property;
 CONDITION SUBSEQUENT

FULFILLMENT = DIVESTING

DIVESTING & VESTING IN DIVESTING &

ANOTHER PERSON REVESTING IN GRANTOR
(CONDITIONAL LIMITATION) (S.31)
(S.28)
CONTI..
 A makes a gift of certain lands to B on the condition that B
shall marry with the consent of D, E and F.

Identify the nature of interest that B has?

Suppose D dies before B gets married & B obtains the consent

of E & F before marrying. Should B get a vested interest?
 COMPLIANCE OF CONDITION
PRECEDENT
B will get a vested interest as there is substantial compliance of
the condition on his part;

Condition precedents is deemed to be fulfilled when its is

substantially complied with. Strict compliance NOT required. (S.
26)

Principle: Law favors early vesting of property

CONTI…
 In the same example, would B get a vested
interest if he obtains consent from E & F after he
marries?
CONTI…
 Substantial compliance cannot be interpreted in a
manner as would be evasion of the condition.
CONTI..
 A transfers certain lands to B. The deed states that in case B
marries without the consent of C, D & E, the lands would go
to F.

What interest does B have?

D dies. B must marry with the consent of all 3 in order to

keep the interest vested.
CONTI..
Here, since the condition is subsequent it must be
strictly complied with; (S.29)

Reason: fulfillment results in divesting, and law always

favours vesting.
 DIFFERENCE B/W CONDITION
PRECEDENT & SUBSEQUENT
CONDITION PRECEDENT CONDITION SUBSEQUENT

 Precedes vesting; Succeeds vesting;

 fulfillment of CP results in Fulfillment results in
vesting of an interest, not divesting of an already vested
already vested. interest;
Substantial compliance is  Strict compliance is
sufficient; required;
Condition is void = grant /  Condition is void =
transfer is void. transfer= valid; condition is
ignored.
 VALID CONDITIONS
 Transfers subject to conditions shall be valid only if the
conditions are valid;

All conditions whether precedent or subsequent must

not be:
Impossible, forbidden by law, defeat the provisions of
any law, fraudulent, injurious to the person or property of
another, immoral, or opposed to public policy.
CONTI…
S.25 – deals with transfers “dependent upon a
condition” i.e. condition precedent;

 S.28 deals with conditional limitation & states

that such dispositions are subject to S. 25
 FARM of “A” B

CONDITIONS
1.B shall walk 100 km in one hour;
2.B shall marry A’s daughter C. C is dead on
date of transfer;
3.B shall leave her husband;
4.B shall murder C
ULTERIOR TRANSFERS
(S.27-28)
 ULTERIOR TRANSFERS
 Refers to transfers that are created by conditional
limitation i.e. a condition which divests an estate
that is vested and vests in another person;

Conditional limitations are condition subsequent;

CONTI..
 A transfers property to B with a condition superadded
that in case B does not within 3 years of the date of
transfer gets himself enrolled with the Bar Council of
India, then the property shall pass to C.

Here, A has made to C an ulterior disposition.

 RULES APPLICABLE TO ULTERIOR
DISPOSITIONS (S.28)
 Subject to:
S.10 – Condition restraining alienation;

S.12 - Condition making interest determinable upon

insolvency

S.21 – Contingent interest

CONTI..
S.22 – Transfer to members of a class who attain a particular age

S.23 – Transfers contingent on happening of specified certain

events

S.24 – transfers to such persons as survive at some period not

specified

S.25 – conditional transfer

TRANSFER TO MEMBERS OF A CLASS WHO
ATTAIN A PARTICULAR AGE (S.22 )

 Class of contingent transferees, different from gift to a

class on contingency;

Persons to be included in the class not certain;

Eg. Transfer in favor of A’s children who shall attain the

age of 18 years.
CONTI..
Interest shall vest only on attaining such age;

Ascertainment of class
When 1st child turns 18, in case of a direct transfer;
In case of ulterior transfer, class is ascertained on the
death of the person holding prior interest, if one child is 18.
If no child is 18, then when any any child attains that age.
 TRANSFERS CONTINGENT ON HAPPENING
OF SPECIFIED CERTAIN EVENTS (S.23)

 Section deals with subsequent contingent interest;

A transfers to B for Life and thereafter to C, if secures

membership of BCI;

Q. By when should he secure membership?

CONTI..
Before B’s. death i.e. before prior interest is
extinguished;
 PROBLEMS
A transfers property B and in case of B’ death without children to
C without alienation. Is the ulterior disposition valid.

A transfers property to B with a condition superadded that if B

cuts the trees on the property, the property shall vest in C. Is the
ulterior disposition valid.

A transfers property to B for life and then to C, provided he goes

to England. B dies in 2001 and C goes to England in 2009. Would
C get a vested interest?
CONTI…
A transfers property to B with a condition superadded
that if B ever gets married, the property shall pass to C.
 QUESTION

 A transfers property to B on condition that he shall

execute a certain leases within three months after A’s
death, and, if he should neglect to do so, to C. B dies in
A’s life-time.

Should the disposition in favor of C fail or should take

effect?
 DOCTRINE OF
ACCELERATION(S.27)
Deals with situation wherein there is an ulterior
disposition and the prior disposition fails;

In such cases the ulterior disposition takes effect if only:

The prior disposition is valid; and
Failure of prior interest due non fulfillment of condition;
CONTI…
 That is failure of interest may be because of reasons other
than those contemplated by the Transferor;

Here, ulterior transfer takes effect as if the prior interest has

never been in the way;

Justified on the ground that it is giving effect to the intention

of the grantor.
EXCEPTIONS
 Prior interest is void;

Where intention of transferor is clear and specific that the ulterior

transfer is to take effect only if it fails in a particular manner.

A transfers property to his wife; but, in case she should die in his
life-time, transfer to B that which he had transferred to her. A and
his wife perish together, under circumstances which make it
impossible to prove that she died before him. The disposition in
favour of B does not take effect.
 QUESTION
A transfers a farm to B for her life, and, if she does not
desert her husband to C.

Here, prior disposition is valid, but ulterior invalid

Would Prior disposition also fail?

PRIOR DISPOSITION NOT AFFECTED BY
INVALIDITY OF ULTERIOR
DISPOSITION (S.30)
B is entitled to the farm during her life as if no condition
had been inserted

If the ulterior disposition is not valid, the prior

disposition is not affected by it.
 DIVESTING AND RE-VESTING
IN GRANTOR
 S.31 – there can be a condition which can
extinguish an interest on the happening of an event

S. 32 – such a condition must not be invalid.

 VOID TRANSFERS AND VOID
CONDITIONS
VOID TRANSFERS VOID CONDITIONS

Direct transfer to an UBP; Transfer in total restraint of

alienation;
Transfer of partial interest to Transfer in restraint of
UBP; enjoyment;
Transfers violating rule of Transfer making interest
perpetuity; determinable on insolvency or
attempted alienation;
Conditional transfers when the
condition is illegal, immoral, or Transfer directing accumulation
impossible; of income beyond period of
perpetuity
DOCTRINE OF ELECTION
(S.35)
 DOCTRINE WHEN INVOKED
 When transfer is made by a person who has no right to
transfer;

By the same transaction, benefit is conferred on the owner of

the property;

Owner cannot keep both the property transferred and the

benefit;
CONTI…
Such owner must elect b/w the benefit and the property
that he owns;

Electing the benefit = relinquishing the property

transferred;

Electing to keep property = relinquishing benefit .

 PRINCIPLE UNDERLYING
DOCTRINE
 Where a deed makes a general disposition of property
for the benefit of the person, such person cannot accept
benefit, unless he conforms to all its provisions;

Man cannot approbate and reprobate

 PARTIES INVOLVED
Transferor = not entitled to transfer; intention irrelevant.

Owner = refractory transferee = on whom benefit is

conferred;

Transferee = property transferred aka Disappointed

transferee in case Owner elects to relinquish benefit;
CONTI…
Benefit relinquished reverts to Transferor;

Disappointed Transferee entitled to compensation

if:
Transfer was for consideration; or
Transfer was gratuitous and transferor has died before
election or become incapable of making a fresh transfer.
CONTI..
India = based on forfeiture;

English = based on compensation;

 NO APPLICATION
Where benefit is:

Indirect;

Conferred in another capacity.

 EXCEPTION
 Benefit that is not conferred in lieu of the property;
 WHEN ACCEPTANCE =
ELECTION
Acceptance of benefit = election of transfer when:
Owner aware of duty to elect; and
Of those circumstances that would influence the
judgment of a reasonable man in making an election; or
If he waives enquiry into the circumstances.

Presumption of knowledge / waiver, if property enjoyed

for 2 years without act of dissent.
CONTI…
Such knowledge or waiver may be inferred from
any act of his which renders it impossible to place
the persons interested in the property professed to
be transferred in the same condition as if such act
had not been done
CONTI…
A transfers to B an estate to which C is entitled, and as
part of the same transaction gives C a coal-mine. C takes
possession of the mine and exhausts it. He has thereby
confirmed the transfer of the estate to B.
 PRESUMPTION OF ELECTION
WHEN MADE
 If at the expiration of 1 year from the date of transfer
the transferor makes a requisition and owner does not
comply