The article analyses Section 13 Of The Transfer Of Property Act (TPA).
What Is Section 13 Of The Transfer Of Property Act (TPA)?
Section 13 acts as the exception of Section 5 of the Transfer of Property Act. According to Section 5, the transfer is between the living persons only, i.e, inter Vivos. But Section 13 of the Transfer of Property Act is about the transfer for the benefit of an unborn person. As per Section 13:
- No transfer can be directly made in favour of an unborn person.
- The interest in favour of the unborn person must be preceded by a prior life interest
- The prior life interest must also be created by the same transfer.
- The unborn person must be given the whole of the remaining interest of the transferor so that there can be no further interest in favour of others.
Thus if a property is given to an unborn person, Two Conditions should be satisfied:
- It should be preceded by a life interest in favour of a living person
- It should comprise the whole of the remaining interest of the transferor so that there can be no further interest in favour of others.
Unborn
- For the Transfer of Property Act,1882:
– Maybe in the womb of the mother
– May not be in the womb of the mother
- Hindu Joint Family:
Child in the womb can ask share in the property
- Muslim law
Child in the womb has no right to property
Essential features of section 13 of TPA
1. No transfer could be directly made to the unborn person:
The transfer cannot be made directly to an unborn person. Transfers like this can only be brought into existence by the procedure of trusts.
If a property is transferred directly to a person who is not in existence, the interest so transferred shall be divested or be away from the transferor but it would have to remain in abeyance and wait for the transferee to come into existence, in whom it could vest.
Such a situation would be against the very concept of the interest.
2. Interest in favour of the unborn must be preceded by a prior interest:
When a property is transferred the interest in property moves away from the transferor and vests in the transferee.
If the property is transferred directly to a person, not in existence, that interest shall be away from the transferor but it would have to remain in abeyance and wait for the transferee to come into existence in whom the interest could vest.
This peculiar situation would be against the very concept of vesting of interest of property. This is the reason there should always be created a prior interest in favour of a living person while transferring property to an unborn person who is not in existence.
3. The prior life interest must also be created by the same transfer.
Transfer and prior interest must be part of the same document
4. Absolute interest is to be transferred
The unborn person must be given the whole of the remaining interest of the transferor in the property. Limited or life interest cannot be given to an unborn person.
If the interest is not absolute, the transfer shall be void and it would not take effect.
When the transferor creates a prior interest in favour of an intermediary living person he retains the remaining interest in the property.
That remaining interest must be given to the unborn person when he comes into existence.
If life interest is created in favour of the intermediary living person or persons, and the unborn person is not given the absolute interest, then:
- The transfer in respect of the unborn does not take effect.
- The property shall revert to the transferor or his legal heirs after the termination of life interest i.e, on the death of intermediaries.
Advantages of such transaction
- The person in whose favour prior life interest is transferred can enjoy the property but cannot sell it because he is given the only limited interest in the property.
- The ultimate beneficiary of the property would be the unborn person.
- When the unborn person comes into existence, the property would belong to him. Till then the person in whose favour prior life interest is transferred shall keep the property in the trust of the unborn person.
Illustrations
A transfers his house to Z for life and also to X for life and also to S for life and later to the unborn child of S. Here Z, X and S all are living persons in existence at the date of transfer. This disposition of the property is valid. The property can be given to more than one living person successively for life before it eventually vests in the unborn.
Section 13 and Hindu Law
- Under old Hindu Law, a gift or bequest in favour of an unborn was void.
- As after 1929, the provisions of Chapter II apply to Hindu, hence transfer in favour of the unborn person is valid.
Section 13 and Muslim Law
- Under Muslim law, will cannot be made in favour of an unborn person who is not in existence.
- Since there is a conflict between section 13 and Muslim law on this point so, therefore, Muslim law will prevail and Section 13 will not apply to will by Muslims.
Section 13, is an attempt to import into India the English “Rule against Double Possibilities”
In Whitby v. Mitchell (1890) it was held that property could be transferred in favour of an unborn person subject to the rule against double possibilities.
According to this rule, a person disposing of property to another shall not fetter the free disposition of that property in the hands of more than one generation.
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