“TRANSFER FOR BENEFIT OF UNBORN PERSON”

DR. SHAKUNTALA MISRA NATIONAL REHABILITATION

UNIVERSITY, LUCKNOW

FACULTY OF LAW

Assignment on

“TRANSFER FOR BENEFIT OF UNBORN PERSON”

Subject: “Property Law”

Submitted By:

DEYVANSHU MOHAN NIGAM.

(B.Com.L.L.B (Hons.) 5th Semester Student)
(Faculty of Law)
Roll no. - 143070019

Submitted To:

Dr. Gulab Chandra Rai.

(Assistant Professor in Law)
(Faculty of law)
DSMNRU

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ACKNOWLEDGEMENT
I would like to express my deepest appreciation to all those who provided me the
possibility to complete this project. A special gratitude I give to our teacher whose
contribution in stimulating suggestions and encouragement helped me to coordinate
my project especially in writing of this project.

Furthermore, I would also like to acknowledge with much appreciation the crucial role
of my teachers who gave the permission to use all required equipment and the
necessary material to complete the assignment “Transfer for Benefit of Unborn Person”.

I have to appreciate the guidance given by other teachers that has improved our
presentation skills thanks to their comment and advices.

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INDEX

A. MEANING.
B. GENERAL PRINCIPLE.
C. UNBORN PERSON.
D. TRANSFER FOR THE BENEFIT OF UNBORN PERSON.
E. CREATION OF A PRIOR LIFE INTEREST.
F. NO LIFE INTEREST FOR AN UNBORN PERSON.
G. VALIDITY OF TRANSFER TO BE ASSESSED BY THE
LANGUAGE OF THE DEED AND NOT BY ACTUAL EVENTS.
H. CASES LAW.
I. DIFFERENCE BETWEEN INDIAN AND ENGLISH LAW.

J. RULE UNDER HINDU LAW AND MUSLIM LAW.

K. RULE AGAINST ACCUMULATION.

L. CONCLUSION.

M. BIBLIOGRAPHY.

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TRANSFER FOR BENEFIT OF UNBORN PERSON

INTRODUCTION

Meaning - under section 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.
Illustration
A transfer 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.

GENERAL PRINCIPLE
Section 13 gives effect to the general rule that a transfer can be effected only between
living persons. There cannot be a direct transfer to a person who is not in existence or is
unborn. This is the reason why sec. 13 uses the expression transfer 'for the benefit of'
and not transfer 'to' an unborn person.
Law contemplates transfers for the benefit of unborn person in two ways, one is by
the creation of a trust, where the property is transferred to the trustees, who, though
possess the title to the property, hold the property in trust for the benefit of the class of
beneficiaries who can be 'unborn person'. The second method is explained under this
section.

UNBORN PERSON
A person not in existence has a specific reference to one who may be born in the future
but does not have a current existence. Even thought a child in womb is literally not a
person in existence, but has been so treated under both Hindu Law and English Law.
Thus, it should be noted that the term 'unborn' here, refers to not only those, who might
have been conceived but are not yet born, i.e., a child in womb, but also includes those
who are not even conceived. Whether they will be born at all or not is also a possibility,
but a transfer of property is permissible to be effected for their benefit.

Transfer for the Benefit of Unborn Persons

Section 13 provides for a specific mechanism for transferring property validity for the
benefit of unborn persons. The procedure is as follows.
a) The person intending to transfer the property for the benefit of an unborn
person, should first create a life estate in favour of a living person and after
it, an absolute estate in favour of the unborn person.

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b) Till the person, in whose favour a life interest is created is alive, he would
hold the possession of the property, enjoy its usufruct i.e. enjoy the property.
c) During his lifetime if the person, (who on the day of creation of the life
estate was unborn) is born, the title of the property would immediately vest
in him, but he will get the possession of the property only on the death of the
life holder.

Illustrations
1) A, on 1st January, 1980 executes a deed by which he creates a life interest in
his property in favour of his brother Br and further provides, that this
property is to vest absolutely in favour of his brother's first child UB. Br, on
the date of the transfer, was unmarried. He took the possession of the
property, got married and a child was born to him in 1985. The moment the
child was born, he took a vested interest in the property. The possession
continues with Br, till his death in 2000, upon which the life I estate will
come to an end and UB would take the possession of the property.
2) In the same example, take a situation, where UB is born in 1985 but dies in
1987,i.e., during the lifetime of Br. Here, since UB takes a vested interest in
the property, he becomes the owner at the time of the birth. Here the
possession of the property will continue with Br, till 2000 and on his death,
upon which the property will go to the heirs of UB.
3) Similarly, if UB was never born and Br dies in 2000, the property would
revert back to A, if he is alive or if he is dead, it would go to A's heirs, as if A
died in 2000, leaving behind this property.

Creation of a Prior Life Interest

As far as the creation of a prior interest is concerned, first, the property is given for life
to a living person. It is not necessary that life interest should be created in favour of only
one living person. The transfer is competent to create successive life interests in favour
of several living persons at the same time.
For instance, A transfer property to B for life, and after him, to C, and then to D
again for their lives and then absolutely to B’s unborn child UB.
A ———————————B (life interest)
———————————-C (life interest)
———————————-D (life interest)
———————————-UB (Absolute interest) [fig (i)]
On B’s death, the possession would be taken by C and on C’s death, by D. On D’s death,
the possession would go to B’s child, who should have come in existence by this time. If
he not there, the property would revert back to A, if he is alive, else to his hiers.

No Life Interest for an Unborn Person

As far as the unborn is concerned, no life interest can be created for the benefit of an
unborn person. Section 13, specifically prohibits that, by the use of the expression, ‘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. It means that the

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transfer must convey to the unborn person, whatever interest he had in the property,
without retaining anything with him. Thus, no limited estate can be conferred for the
benefit of the unborn person. If limited interest in the property is settled for him, the
same would be void.
For instance, A creates a life estate in favor of his friends B, and a life estate for the
benefit of B’s unborn first child UB1 and then absolutely to B’s second child UB2.
A ———————– B (Life interest)
———————– UB1 (Life interest)
———————– UB2 (Absolute interest) [fig (ii)]
The second figure is of limited interest in the property for the benefit of an unborn
person and would therefore be void and incapable of taking effect in law. After the
death of B, here, the property would revert back to A or his hiers as the case may be, as
even though the transfer for the benefit of UB2 appears to be proper, as it is dependent
on a void transfer that cannot take effect in law; a transfer subsequent to, or dependent
on a void transfer can also not take effect.
Thus, where a father gave a life interest in his properties to his son and then to
his unborn child absolutely, it was held that the settlement was valid. But where the
interest in favour of the unborn child was a life interest the settlement would be void,
and a subsequent interest would also fail. Similarly, where there is possibility of the
interest in favour of the unborn child being defeated either by a contingency or by a
clause of defeasance, it would not be a bequest of the whole interest, and would be
therefore be void.

Validity of Transfer to be Assessed by the Language of the Deed and not

by Actual Events
In the example cited above, in figure (ii), suppose UB1 dies before B and UB2 is alive
when the life estate in favour of B comes to an end. Even then, the transfer of the benefit
of UB2 will not take effect as the validity of the transfer has to be assessed from the
language of the document and not with respect to probable or actual events that may
take place in future. It is the substance of the transfer that will determine whether it is
permissible under the law or not and not how the situation may emerge in future.
In Girish Dutt V Data Din (AIR 1934, Oudh 35.), A made a gift of her property to B
for her life and then to her sons absolute. B had no child on the date of execution of the
gift. The deed further provided that in case B had only daughters, then the property
would go to such daughters but only for their life. In case B had no child then after the
death of B, the property was to go absolutely to X.
The deed on paper provided a life estate in favour of B’s unborn daughters, which is
contrary to the rule of sec.13. However, B died without any child, and X claimed the
property under the gift deed. The court held that where a transfer in favour of a person
or for his benefit is void under sec.13, any transfer contained in the same deed and
intended to take effect or upon failure of such prior transfer is also void. In determining
whether the transfer is in violation of sec.13, regard has to be made with respect to the
contents of the deed and not what happened actually. Here, as the transfers in favour of
X was to take effect on failure of the third transfer stipulated in the contract that was
void, the transfer in favor of X also became void. Hence, X’s claim was defeated. Where A
transferred the property in favour of B with a stipulation that the property is to be

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shared by B with his other siblings not in existence on the date of the transfer, the
transfer in favour of unborn persons is valid and B would have to share the property
with them.
Case Laws
Sopher’s case. -
In the case of Sopher v Administrator General of Bengal, (AIR 1944 PC 67.), a testator
directed that his property was to be divided after the death of his wife into as many
parts as there shall be children of his, living at his death or who shall have pre-deceased
leaving issue living at his death. The income of each share was to be paid to each child
for life and thereafter to the grand-children until they attained the age of 18, when alone
the grand-children were to be absolutely entitled to the property. The bequest to the
grand-children was held to be void by Privy Council as it was hit by sec.113 of the
Indian Succession Act which corresponds to sec.13 of Transfer of property Act. Their
Lordships of the Privy Council observed that: “If under a bequest in the circumstances
mentioned in sec.113, there was a possibility of the interest given to the beneficiary
being defeated either by a contingency or by a clause of a defeasance, the beneficiary
under the later bequest did not receive the interest bequeathed in the same unfettered
form as that in which the testator held it and that the bequest to him did not therefore,
comprise the whole of the remaining interest of testator in the thing bequeathed.

Ardeshir’s Case. -
In Ardeshir V Dadabhoy, (AIR 1945 Bom 395.),case D was a settler who made a
settlement. According to the terms of settlement, D was to get during life, one-third each
was to go to his sons A and R. After D’s death, the trust property was to be divided into
two equal parts. The net income of each property was to be given to A and R for life and
after their death to the son’s of each absolutely. If A and R were each to pre-deceased D
without male issue, the trusts were to determine and the trust property were to the
settler absolutely. The settler then took power to revoke or vary the settlement in whole
or in part of his own benefit. It was held that R’s son who was not born either at the date
of settlement or his death did not take any vested interest and the gift to him was
invalid. A’s son who was alive at these dates did not also take a vested interest.

Applicability of Sopher and Ardeshir rulings in India

The decision in Sopher’s case and Ardeshir’s case were applied by Bombay High Court
in Framroz Dadabhoy v Tahmina, in this case, bai Tahmina settled a certain sum upon
trust in favor of herself for life and after her death and subject to the power of
appointment by codicil or Will among her issues born during her lifetime in trust for all
her children who being sons shall attain the age of 18 or being daughters shall attain
that age or marry under that age being daughter’s, in equal sums. It was held by their
Lordships that the decision in the Sopher’s case could not be applied to the trusts of a
settlement which were transfer inter-vivos. It was held that the words ‘extend to the
whole of remaining interest of the transferor in the property’ in sec.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.

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DIFFERENCE BETWEEN INDIAN LAW AND ENGLISH LAW

 The minority period in India is 18 years whereas it is 21 years under
English law.
 The period of gestation should be an actual period under Indian Law but
it is a gross period under English law.
 Under Indian law, property should be given absolutely to the unborn
person whereas in English law, need not be absolutely given.
 The unborn person must come into existence before the death of the last
life estate holder as per Indian law whereas he must come into existence
within 21 years of the death of the last life estate holder in case of English
law.

EXCEPTIONS -
 Transfer for public benefit. Where property is transferred for the benefit
of the people in general, then it is not void under this rule. e.g. for the
advancement of knowledge, religion, health, commerce or anything
beneficial to mankind.
 Covenants of Redemption. This rule does not offend the 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 i transfer of interest.
 Pre-emption. In this there is an option of purchasing a land and there’s no
question of any kind of interest in the property, so this rule does not
apply.
 Perpetual Lease. It is not applicable to the contracts of perpetual renewal
of leases.
 This rule is not applicable to mortgages because there is no creation of
future interest.

RULE UNDER HINDU LAW AND MUSLIM LAW

Prior to the enactment of the TP Act, the rule under Hindu and Muslim law was that a
gift to a person, who was not in existence, was void. The position under Muslim law
continues to be the same. However, for Hindus, the rule was modifies by series of
enactments to bring it conformity with sec.13 of the TP Act. Parallel provisions have
also been provided under Indian Succession Act 1925, which permits bequest for the
benefit of unborn person. Section 113 of India Succession Act 1925(IS Act), applies to
legacies created for the person not in existence and contain a provision almost identical
to sec.13 of the TP Act.

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RULE AGAINST ACCUMULATION

Section 17 of the Act speaks about the “Accumulation of Income of property or Direction
for Accumulation”. A direction for the accumulation of income of property amounts to
limiting the beneficial enjoyment of property. Such direction is void as per S.11 of the
Act but S.17 is an exception.S.11 is applicable where there are absolute transfers
whereas S.17 applies to all kinds of transfer. e.g., A settler by deed directs accumulation
for 25 years and himself lives for 40 years, from the date of transfer. The accumulation
for 25 years is good.

This Section is akin to Section 117 of Indian Succession Act, 1925.

Permissible period for Accumulation is as per law:-

i) Life of the transferor; or

ii) Period of 18 years, whichever is longer. Any condition beyond this period is void and
not operative. The direction can be for the whole or part of the income.

Illustration: X transfers his property to Z with a direction that the income of the said
properties shall accumulate during X’s life and shall be given to M. The direction here is
valid only up to the life of Z and not after his death.

EXCEPTIONS -
1) Payment of Debts. This rule is not applicable where the purpose for
accumulation is the payment of debts incurred by the transferor or any
other person having an interest in the transfer.
2) Accumulation for raising portions. It means providing a share of the
income for maintenance. It does not apply to cases where accumulation of
income is for providing portions to children or for some remote issue of
the transferor or any other person interested in the transfer.
3) Maintenance of property. Accumulation for the proper maintenance and
preservation of the property shall not be void even if it exceeds the life of
the transferor or 18 years from the date of transfer.

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CONCLUSION
A child in womb is literally not a person in existence, but has been so treated under both
Hindu Law and English Law child in its mother’s womb is for many purposes regarded
by a legal fiction as already born, in accordance with the maxim nasciturus pro jam nato
habetur.Section 13 provides that the property cannot transfer directly to an unborn
person but it can be transferred for the benefit of an unborn person. For transfer of
property for the benefit of unborn person two conditions are required to be fulfilled: -
a) Prior life interest must be created but not for an indefinite period in favor of a person
in existence at the date of transfer, and
b) Absolute interest must be transferred in favor of unborn person.

Bibliography
 Dr. Ponam pradhan Saxena, Property Law 2nd Edition
(2011).

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