CENTRAL UNIVERSITY OF SOUTH BIHAR

School Of Law and Governance

SUBMITTED BY:- SUBMITTED TO:-

Suruchi Suman Dr. Pallavi Singh
CUSB2013425125 Assistant Professor
Semester-VI SLG, CUSB
Section (A)
 INTRODUCTION
• The guiding principle of transfer of property is that a transfer must take place
between two living person.

• The Transfer of Property Act, 1882 has laid down certain rules regarding transfers
for the benefit of unborn persons.

• Interest may be created in favor of an unborn person but no transfer can be made
directly to such a person.

• As per Section 5 of the Transfer of Property Act, 1882, the transfer of property shall
take place only between two living beings, it means the transferee must also be in
existence at the date of such transfer.

• Property cannot be transferred directly to an unborn person but property can be

transferred for the benefit of an unborn person under Section 13 of the Transfer of
Property Act, 1882.
 No

SECTION 13
According to Section 13 of Transfer of Property Act : – 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.
 1.)No Direct Transfer
• A transfer cannot be made directly to an unborn person.
• Such a transfer can only be made by the machinery of trusts.

• Accordingly, if a transfer were made directly to an unborn person, there would be an abeyance
of ownership from the date of transfer till the coming into existence of the unborn person.

Mannat
Eldest son
Salman Khan
Transfer (Living person) (Unborn)
Shah Rukh khan
2.) Prior Interest must be created:-
•In case a trust is not created, the estate must vest in some person between the date
of the transfer and the coming into existence of the unborn person.

•The interest in favor of an unborn person must always be preceded by a prior

interest in favor of a living person.

Illustration

thereafter
Transfer

for life Unborn son of X

3.)Only Absolute Interest may be given-
Absolute interest may be transferred in favour of the unborn person and not limited or life
interest, that is, the whole of the remaining interest is the entireinterest of the transferor less
the prior life interest carved out of the ownership

Illustration:-

Transfers his villa

Unborn for life

(for life)
Ms. B
Mr.Billionaire (for life)
[Transfer of life-interest in favour of Ms.B is valid but void in case of unborn]
 Legal consequences:-
(I) Intermediary person shall be given only life interest,not absolute
interest.
Illustration

Transfer
Dispose of property to anyone

to Y, if
Mr. X Absolute interest transferred, can

Hence, Intermediary shall be given only life interest, not

aboslute interest because ultimate beneficiary should be the
Unborn Person. Ultimate beneficiary
(ii) unborn must come into existence before the death
of a person holding property for life
 Girjesh Dutt v. Data Din (AIR 1934)

Ms.B Male child of Ms.B (In absence of male

Mr.A (His nephew) (for life) child )of Ms.
Female child B
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 than after the death of B, the property was to go
absolutely to X.

The deed on the 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 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 transfer stipulated in the void contract, the transfer in favour of X also became
void. Hence, X’s claim was defeated.
 Raja Bajrang Bahadur Singh v. Thakurdin Bhakhtrey Kuer

In the instant case the Apex Court had observed that no interest can be created in favour of an unborn person
but when the gift is made to a class or series of persons, some of whom are in existence and some are
nonexistent, it does not fail completely, it is valid with respect to the persons who exist at the time of
testator’s death and is invalid with respect to the rest.

Ardeshir V Dada Bhoy’s case

D was a settler who made a settlement. According to the terms of the 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 sons of
each absolutely. If A and R were each to pre-deceased D without male issue, the trust was to determine and the
trust property was to the settler absolutely. The settler then took power to revoke or vary the settlement in whole
or in part for 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.
 Rule Under Hindu Law and Muslim Law
Section 2 of the Transfer of Property Act
Hindu law, a gift or bequest in favor of
provides that “nothing shall be deemed
an unborn was void. But now, since
to affect any rule of Mohammedan law”,
Transfer of Property Act is applicable to
Section 13 is not applicable to transfers
Hindus, the transfer in favor of an
made by Muslims. However, under
unborn person is valid if it is made
Muslim law too a gift in favor of a
subject to the provisions of Section 13 of
person not in existence has been held
the Act.
void
 Rule Under English Law
• The English law relating to transfer in favour of unborn persons is now
governed by the rule against perpetuities as laid down in section 163 of the Law
of Property Act, 1925.

• Before this Act, the property could be transferred in favour of the unborn
subject to rule against double possibilities.

• Under this rule, the property could be transferred for life in favour of the first
unborn person but to next unborn absolutely.

• If life estates were granted to two successive

unborn person the transfer in favour of only
the second unborn was void because it
violated the rule against double possibilities.
 CONCLUSION
• Transfer of property can be executed
in respect of unborn Persons.

• The transfer cannot be operated

directly but it can be executed
indirectly by the Machinery of trusts

• The interest of the unborn person in

possession of that particular immovable
property shall constitute the entire
interest.

• Moreover, as soon as the transfer of property comes into operation, the vested interest is
also transferred to the unborn person.

• The transfer of immovable property to unborn persons can, thus take effect only
according to the provisions discussed above. Else, the transfer will be declared as void.