Transfer for benefit of unborn person sec. 13 TPA
Provisions regarding transfer of property for the benefit of unborn persons have been laid down in Section 13 of the Transfer of Property Act, 1882.
Accordingly sec.13 reads as,
“where on a transfer of property, an interest is created therein for the benefit of a person not in existence on 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 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 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.
Transfer for the benefit of unborn person.– According to Section 5 of the Transfer of Property Act, 1882, the general rule is that property can be transferred from one living person to another. However, if someone wishes to transfer property to an unborn person, unborn is a person who is not in existence at the time of the transfer not even in the mother’s womb, such a transfer is also possible, subject to the conditions and methods provided in Section 13 of the Act..
A transfer cannot be made directly to an unborn person. Such a transfer can only be made by the machinery of trusts. For the benefit of the trustees being the transferee who held the property for the benefit of the unborn person. Hence, it is clear that a property, cannot be transferred to an unborn person directly. Such transfer can be made by the machinery of trust.
Procedure of Transfer to an unborn
As per section 13 of the Act, for a transfer of benefit of unborn;
(i) a life estate has to be created in favour of living person or persons and,
(ii) an absolute interest must be transferred in favour of the unborn.
The person in whose favour a life estate has been created shall possess and enjoy it till the time he/she is alive. If during such person’s life time the person in whose favour an absolute interest has been created (i.e. the unborn) is born, the title in the property shall immediately vest in him/her even though he/she would get possession of the property only upon the death of life holder.
If the unborn is not born during the life time of the life holder, the property shall be enjoyed by the life holder during his life time after which it would revert back to the transferor or his heirs as the case maybe.
Example
In a case where A transfers his property in 1960 to B for life and then to C for life and finally to C’s son S, who is unborn at this time. Both B and C are alive at this time the property would be first possessed by B for his life and then by C. And after C the property shall be transferred absolutely to the S, who must be in existence at or before the death of the C.
S is born in 1970. At this time, he takes a vested interest in the property but the possession of it is postponed till the death of C (which say for instance took place in 1975)
If S died in 1974, then because he had a vested interest in the property since 1970 i.e. when he was born, the property would after the death of C go to the heirs of S.
But if S was not born till 1975 (i.e. when the last life estate in favour of C ended) then the property would revert back to A or his heirs as the case maybe.
Thus it is important for a valid transfer under section 13, for an absolute interest to be created in favour of unborn (i.e. a life estate cannot be made in favour of unborn) and for the unborn to come into existence before the life estate created in favour of someone else comes to an end.
According to Section 13 a property can be transferred for the benefit of an unborn person subject to the following conditions:
- Prior interest: Transfer for the unborn person must be preceded by a life interest in favour of a person in existence at the date of the transfer. The property which is to be transferred must vest in some person between the date of the transfer and coming into existence of the unborn person. The interest of the unborn person must, therefore, be in every case preceded by a prior interest and before termination of prior preceding interest, the unborn person must come in existence otherwise it would not vest in the unborn person.
2. Only absolute interest may be transferred in favour of the unborn person. It means property can not be transferred to an unborn with life interest or without power of alienation.
We have the following propositions:
(i) the intermediary person living at the time of the transfer is to be given only life interest. It means giving him only the right of enjoyment and possession. He has to preserve the property like a trustee during the life.time on behalf of the unborn person.
(ii) The unborn must come into existence before the death of the.person holding property for the life. After the death of last living person in other words after the termination of the preceding interest the unborn person comes into existence, he cannot succeed to get the property. Because of the fact after termination of life interest, the property cannot remain in abeyance.and cannot wait for a moment. The property will revert to the transferor or.his heirs.
It can be very clearly explained by the following illustration :
A made a gift of her property to daughter of her nephew B for life and then absolutely to B male descendants, if she should have any. But in the absence of any male child of B to daughter of B without power of transfer and if B has no any child then to A’s Nephew. B died issueless.
Decision: The Court observed that the gift for life to B was valid as the B was a living person at the time of transfer. But gift in favour of daughter of B was void under. Section 13 of T.P.Act. Because of the fact the gift was without power of transfer, i.e., without absolute power. Therefore, this prior transfer was.invalid, therefore, its subsequent transfer to A’s Nephew was also invalid.
It was held that 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. [Girijesh Dutt v. Data Din, AIR 1934 Oudh 35.]
So far as Muslim Law is concerned vide Section 2 of Transfer of Property Act, it is not applicable to Muslim Law. However under
Muslim Law also a gift in favour of a person not in existence has been held void.-[Abdul Cadur v. Turnec, (1884) 9 Bom. 158.]
It is true that no interest could be created in favour of an unborn person but when the gift is made to class of series of a person, some of whom are in existence, and some are not, it is valid in favour of whom who are in existence at that time.[R.B. Bahadur Singh v. Kueri, AIR 1953 SC 7.]