Though the Transfer of Property Act deals with transfer intervivos, yet an interest may be created in favour of an unborn person. Discuss.

Question: Though the Transfer of Property Act deals with transfer intervivos, yet an interest may be created in favour of an unborn person. Discuss. [BJS 2018]

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Answer

The general rule under the Transfer of Property Act, 1882 is that property can only be transferred from one living person to another living person. Because when the property has been transferred all interest of the property is transferred along with it to the transferee. So if the property is transferred to the unborn person, it would lead to a situation where the interest would be in abeyance till the transferee comes into existence, this is against the very concept of interest. But Section 13 is the exception to this general rule, which envisages that property can be transferred for the benefit of the unborn child.

Section 13 of the Transfer of Property Act, 1882 lays down:

“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.”

For example, 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 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.

But pertaining to Section 13 of Transfer of Property Act, 1882 the property cannot directly be transferred to an unborn child, but can be transferred for the benefit of an unborn child.

Two Essential Conditions:

1. Property cannot be directly transferred to the unborn child, so a prior interest must be created in favour of a living person.

2. The absolute interest must be transferred in favour of the unborn child.

In the landmark case of Girijesh Dutt v. Data Din, AIR 1934 Oudh 35, the facts suggest that A made a gift of her properties to her nephew's daughter B for life and then absolutely to B's male descendants if she should have any. But in the absence of any male child of B, to B's daughter without the power of alienation and if B has no descendants male or female then to her nephew B died issueless. It was held by the court that the gift for life to B was valid as B was a living person at the date of the transfer. The gift in favour of B's daughter was void under section 13 of the Transfer of Property Act because it was a gift of only limited interest; she had not been given absolute interest further since this transfer was invalid the subsequent transfer depending on it also failed.