A transfers his property to P for life, then to C for life and then to X such P’s sons as shall first attain the age of 22 years. Is the transfer valid? Decide.

Question: A transfers his property to P for life, then to C for life and then to X such P’s sons as shall first attain the age of 22 years. Is the transfer valid? Decide. 

Find the answer to the mains question of Property Law only on Legal Bites. [A transfers his property to P for life, then to C for life and then to X such P’s sons as shall first attain the age of 22 years. Is the transfer valid? Decide.]

Answer

The validity of the property transfer depends on the principles outlined in Section 13 of the Transfer of Property Act, 1882, which allows property to be transferred for the benefit of unborn children.

The general rule under the Transfer of Property Act, 1882, states that property can only be transferred from one living person to another living person. This is because, when property is transferred, all interests in the property are transferred to the recipient. Transferring property to an unborn person would create a situation where the interest in the property remains in abeyance until the unborn person comes into existence. This contradicts the basic concept of interest in property.

Section 13 provides an exception to the general rule by allowing property to be transferred for the benefit of unborn children. It specifies that when a transfer of property creates an interest for a person who does not exist at the time of the transfer, this interest can take effect under certain conditions.

Two Essential Conditions:

a. Prior Interest: To enable a valid transfer of property to an unborn person, the general rule is circumvented by creating a prior interest in favour of a living person. This prior interest holder ensures that the unborn person comes into existence before the prior interest ends.

For example, X transfers his property to A for life, then to B for life, then to C for life, and after the death of C, the property is intended to go to C's son Y. This transfer is valid under Section 13 because the life interest is transferred to living persons before ultimately vesting in the unborn person, Y.

b. Absolute Interest: The property must ultimately be transferred to the unborn child as an absolute interest, not as a limited or life interest. A transfer that imposes restrictions or conditions on the unborn child's right to further alienate the property would be void.

However, Section 14 stipulates that the devolving of such a vested interest can also be postponed such that the unborn does not get a vested interest upon his coming into existence. According to section 14, an interest in the unborn cannot be postponed beyond the period of life of those in whose favour a life interest has been created plus the minority of the unborn. Thus vesting of interest in favour of the ultimate beneficiary may be postponed only up to life or lives of those in whose favour a life estate has been created plus a minority of the unborn.

In the present case, where A transfers his property to P for life, then to C for life, and then to X such P’s sons as shall first attain the age of 22 years, cannot be considered valid. The vesting is void as it is not by the rule against perpetuity as laid down under section 14.