vested interest

Under Section 19 of the Transfer of Property Act, 1882, an interest is vested when it is created in favour of a person without specifying the time when it is to take effect, or with a direction that it is to take effect on the happening of an event which must happen. Possession may be postponed, but the right is present: if the transferee dies before getting possession, the interest passes to his heirs.

A contingent interest (s.21) depends on an uncertain event that may never happen, and fails if the event does not occur. Example: a gift “to A after B's death” is vested in A (B must die); a gift “to A if he marries C” is contingent.

Example

A transfer “to X on the death of Y” creates a vested interest in X, since Y's death is certain to happen.

In Indian law

• Sections 19 and 21, Transfer of Property Act, 1882

See also

contingent interest · spes successionis · rule against perpetuity

Read more in the study notes

• Judicial power of the administration: quasi-judicial functions and administrative adjudication (Administrative Law)
• Reasoned decisions, exceptions to natural justice, effect of breach and Article 136 (Administrative Law)
• Introduction to the CPC: procedural law, history and key definitions (Civil Procedure Code and Limitation Act)
• Suits by or against Government and public officers, aliens and foreign States, and suits on public matters (Civil Procedure Code and Limitation Act)
• Reference, review and revision; caveat, restitution and the inherent powers of the court (Civil Procedure Code and Limitation Act)
• Limitation Act, 1963: salient features, bar of limitation, condonation of delay and legal disability (Civil Procedure Code and Limitation Act)