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LawNotes,CSE&JudicialNotes
WRITTENBYKJUNE3,2013

TransferofPropertyActUnbornChild
Section13oftheActreferstoTransferforbenetofunbornperson.ThisSectionisanaempttoimport
intoIndiawhatusedtobeknowninEngland,TheruleofDoublePossibilities.Theruleisthata
persondisposingofpropertytoanothershallnotfeerthefreedispositionofthatpropertyinthehands
ofmorethanonegeneration.Aswehavereadearlierthatboththepartiestoatransferofpropertymust
belivingpersons(includingjuristicperson),butSection13isanexceptiontothegeneralruleoftransfer
intervivos.S.13isatransferbyborntotheunborn.Apropertycanbetransferredtoachildinthe
motherswombbutnottoonewhosnotinthemotherswomb.
UnbornPerson:Heisonewhoisnotinexistenceasofnoworwhowillcomeintoexistenceinfutureat
anytimeorwhoisinthewombofthemother.Heisbasically,apersonnotyetborn.
PriorInterest:Priorinterestisnotaectedbyreasonofthesubsequentinterestbeingrenderedvoidby
thisrule.Itisneitherenlargedorextinguished(MOHAMEDSHAHV.OFFICIALTRUSTEEOFBENGAL,
190936CAL431).
LimitedInterest:Limitedinterestcannotbecreatedforthebenetofanunbornpersoneventhoughit
issubjecttoapriorinterestinfavourofalivingperson.
PREREOUISITESFORAVALIDTRANSFEROFPROPERTYTOANUNBORNPERSON
i)Notransfer.Thetransferofpropertycanbedonebywayoftrustsbutnotdirectly.Intheabsenceof
trustthepropertymustbecreatedinfavourofalivingpersonandthentotheminor.
ii)PriorInterest.Lifeinterestcanbeenjoyedbyperson(s)untiltheunborncomesintoexistence.
iii)Beforethedeathoflastlifeestateholder.Theunbornpersonmustcomeintoexistencebeforethedeathof
thelastlifeestateholder.Itisnotnecessarythatheshouldbeborn,evenifheisinthemotherswomb,
itsenough.Achildinventresamereisequaltochildinessencemeaningachildinthemotherswombis
equaltoachildinexistence.
iv)Immediatetransferofrights.Alltherightsshouldvestintheunbornchildassoonashecomesinto
existence.Hewilltheabsoluteownerofthepropertyvestedinhim.
Itshouldbenotedthatthetransfercanbemadetoanunbornpersonbutnottotheissueofanunborn
person.Wherethegiftmadeinfavouroftheunborngrandchildrenwasnotinrespectofthewhole
interestintheproperty,thegiftwasheldtobeavaliddocument
(ISSACNISSINV.OFFICIALTRUSTEE,BENGAL,A.LR.1957CAL118(119)).
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UnderMuslimLaw:ThisSectiondoesnotapplytoMohammedans.Agifttoanunbornpersonisvoid 1/5

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UnderMuslimLaw:ThisSectiondoesnotapplytoMohammedans.Agifttoanunbornpersonisvoid
exceptincaseofWakf(ABDULKHADURV.TURNER,ILR9B158).
UnderHinduLaw:AgiftorbequestinfavourofanunbornpersonisvoidbutnowunderT.P.Actitis
valid(Sectionl3oftheT.P.Act).

RULEAGAINSTPERPETUITY
Perpetuitymeansanuncertainperiodortimeorindeniteperiod.Therearepeoplewhowanttoretain
theirpropertyintheirownfamiliesfromgenerationstogenerations.Thiswillbealosstothesociety
becauseitwillbedeprivedofanybenetarisingoutofthatproperty.Freeandfrequentcirculationis
importantandthepolicyofthelawistopreventthecreationofsuchperpetuity.
Origin:Perpetuitymayariseintwoways(a)Bytakingawaythepowerofalienationfromthetransferor
(b)Bycreatingaremoteinterestinthefutureproperty.
AconditionrestrainingthetransfereespowerofalienationisvoidasperS.1OoftheAct.Anda
dispositiontocreateafutureremoteinterestisprohibitedunderS.14oftheAct.
Object:Asdiscussedearlier,itisimportanttoensurefreeandactivecirculationofpropertybothfor
tradeandcommerceaswellasforthebeermentofthepropertythatultimatelyisgoodforthesociety.
Thus,theobjectofthissectionistoseethatthepropertyisnottiedupandtopreventcreationof
perpetuity.
FollowingconditionsmustbesatisedtoaractSection14:
1.Theremustbetransferofproperty.
2.Thetransfershouldbetocreateaninterestinfavourofanunbornperson.
3.Interestcreatedmusttakeeectafterthelifetimeofoneormorepersonslivingatthe
dateofsuchatransferandduringtheminorityoftheunbornperson.
4.Theunbornpersonmustbeinexistenceattheexpirationoftheinterestoftheliving
persons.
5.Thevestingoftheinterestinfavouroftheultimatebeneciarymaybepostponedonly
uptothelifeorlivesoflivingpersonsplustheminorityoftheultimatebeneciarybutnotbeyondthat.

EXTENTOFPERPETUITYPERIOD
PositioninIndiaLifeoranynumberoflivesinbeing+periodofgestation+minorityperiodofthe
unbornbeneciary.
EnglishLawLifeorlivesinbeing+periodofgestation+minorityperiod.
DierencebetweenIndianandEnglishLaw:
1.TheminorityperiodinIndiais18yearswhereasitis21yearsunderEnglishlaw.
2.TheperiodofgestationshouldbeanactualperiodunderIndianLawbutitisagross
periodunderEnglishlaw.
3.UnderIndianlaw,propertyshouldbegivenabsolutelytotheunbornpersonwhereasin
Englishlaw,neednotbeabsolutelygiven.
4.Theunbornpersonmustcomeintoexistencebeforethedeathofthelastlifeestate
holderasperIndianlawwhereashemustcomeintoexistencewithin21yearsofthedeath
ofthelastlifeestateholderincaseofEnglishlaw.
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EXCEPTIONS

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EXCEPTIONS
i)Transferforpublicbenet.Wherepropertyistransferredforthebenetofthepeopleingeneral,thenit
isnotvoidunderthisrule.e.g.fortheadvancementofknowledge,religion,health,commerceor
anythingbenecialtomankind.
ii)CovenantsofRedemption.Thisruledoesnotoendthecovenantsofredemptioninmortgage.
iii)PersonalAgreements.Agreementsthatdonotcreateanyinterestinthepropertyarenotaectedby
thisrule.Thisruleappliesonlytotransferswherethereitransferofinterest.
iv)Preemption.Inthisthereisanoptionofpurchasingalandandtheresnoquestionofanykindof
interestintheproperty,sothisruledoesnotapply.
v)PerpetualLease.Itisnotapplicabletothecontractsofperpetualrenewalofleases.vi)Mortgages.This
ruleisnotapplicabletomortgagesbecausethereisnocreationoffutureinterest.
RULEAGAINSTACCUMULATION
Section17oftheActspeaksabouttheAccumulationofIncomeofpropertyorDirectionfor
Accumulation.Adirectionfortheaccumulationofincomeofpropertyamountstolimitingthe
benecialenjoymentofproperty.SuchdirectionisvoidasperS.11oftheActbutS.17isan
exception.S.11isapplicablewherethereareabsolutetransferswhereasS.17appliestoallkindsof
transfer.e.g.,Aselerbydeeddirectsaccumulationfor25yearsandhimselflivesfor40years,fromthe
dateoftransfer.Theaccumulationfor25yearsisgood.
ThisSectionisakintoSection117ofIndianSuccessionAct,1925.
PermissibleperiodforAccumulationisasperlaw:
i)Lifeofthetransferor;or
ii)Periodof18years,whicheverislonger.Anyconditionbeyondthisperiodisvoidandnotoperative.
Thedirectioncanbeforthewholeorpartoftheincome.
Illustration:XtransfershispropertytoZwithadirectionthattheincomeofthesaidpropertiesshall
accumulateduringXslifeandshallbegiventoM.ThedirectionhereisvalidonlyuptothelifeofZand
notafterhisdeath.
EXCEPTIONS
1.PaymentofDebts.Thisruleisnotapplicablewherethepurposeforaccumulationisthepaymentof
debtsincurredbythetransferororanyotherpersonhavinganinterestinthe
transfer.
2.Accumulationforraisingportions.Itmeansprovidingashareoftheincomeformaintenance.Itdoesnot
applytocaseswhereaccumulationofincomeisforprovidingportionstochildrenorforsomeremote
issueofthetransferororanyotherperson
interestedinthetransfer.
3.Maintenanceofproperty.Accumulationforthepropermaintenanceandpreservationoftheproperty
shallnotbevoidevenifitexceedsthelifeofthetransferoror18years
fromthedateoftransfer.
SAVINGSOUTOFINCOME:ThesearenotwithintheoperationofthesectionandthereforeTrustees
arenotpreventedbyreasonofthissectionfrommakingaccumulationsonsavings(TA7TERSALLV.
PEEL,INRE.PEEL,19361CH.161).

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11thoughtsonTransferofPropertyActUnbornChild
1.UMANGSAYS:
NOVEMBER26,2013AT11:39AM
Reallyhelpedmetounderstandit.Thanks.
REPLY
2.YASIRRIAZSAYS:
MARCH3,2015AT8:52AM
thanxalotforhelpingmetounderstandthistopic
REPLY

1.KSAYS:
APRIL18,2015AT8:05PM

Youarewelcome
REPLY
3.DR.KAMASAISVMSAYS:
NOVEMBER20,2015AT9:45AM
presentationreallylucid.
deservesadmiration
REPLY

1.KSAYS:
AUGUST29,2016AT5:01AM

Thankyouforyourkindwords,Dr.Kamasaisvm.
REPLY
https://kanwarn.wordpress.com/2013/06/03/transferofpropertyactunbornchild/
4.DR.KAMASAISVMPRINCIPALSAYS:

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4.DR.KAMASAISVMPRINCIPALSAYS:
NOVEMBER20,2015AT9:59AM
reallysimpleandclear
explanation.
REPLY

1.KSAYS:
AUGUST29,2016AT5:01AM

Thankyou,Dr.Kamasaisvm
REPLY
5.NANDINISAYS:
AUGUST15,2016AT3:51AM
Thankyoufortheseposts.Keeptheseawesomearticlescoming
REPLY

1.KSAYS:
AUGUST29,2016AT4:23AM

Thanksforthekindwords,Nandini.
REPLY
6.SUBHALAXMIMOHANTYSAYS:
AUGUST23,2016AT11:46PM
Verynicenotes..sousefulinjudiciaryexaminationThanksforthefollowinglink
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1.KSAYS:
AUGUST29,2016AT4:23AM

Thankyou,Subhalaxmi.
REPLY

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