Transfer for the benefit of an unborn person and the rule against perpetuity

1. Section 13: transfer for the benefit of an unborn person

Section 13 provides that 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.

The conditions:

• No direct transfer. Property cannot be transferred directly to an unborn person. There must be a prior interest in favour of a living person (usually a life interest), created by the same transfer.
• Absolute interest. The interest given to the unborn person must be the whole of the transferor's remaining interest. A life interest to an unborn person is void.
• Birth before the prior interest ends. The unborn person must come into existence before the termination of the prior interest, so that the property has somewhere to go. A child in the womb is treated as in existence.

Illustration in the section: A transfers property of which he is 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.

Section 20 adds that where an interest is created for an unborn person, he acquires a vested interest on his birth, although he may not be entitled to enjoy it immediately.

Under classical Hindu law, Tagore v. Tagore (1872) held a gift to an unborn person void. The Hindu Transfers and Bequests Act, 1914 (Madras), and the Hindu Disposition of Property Act, 1916, removed that bar and brought Hindus in line with section 13.

2. Section 14: rule against perpetuity

Section 14 provides that no transfer of property can operate to create an interest which is to take effect after the lifetime of one or more persons living at the date of such transfer, and the minority of some person who shall be in existence at the expiration of that period, and to whom, if he attains full age, the interest created is to belong.

The maximum period of remoteness is therefore: the life (or lives) of persons living at the date of transfer, plus the minority of the ultimate beneficiary, who must be born before the last life ends. Majority is attained at eighteen under the Indian Majority Act, 1875. A period of gestation is added where the ultimate beneficiary is in the womb at the end of the last life. Unlike English law, there is no fixed term of years in gross.

The test is whether the interest must vest, if at all, within that period. It is applied at the date of transfer on the facts as they might turn out, not as they actually turn out. A transfer to A for life, then to his unborn son when he reaches 25, is void: the son might be under 25 when A dies, so vesting could be postponed beyond A's life plus the son's minority.

Sections 13 and 14 compared

• Section 13 concerns the quantum of the interest given to an unborn person (it must be absolute). Section 14 concerns the time within which it must vest.
• Both must be satisfied. A transfer can comply with section 13 and still fail section 14.

3. Exceptions to the rule against perpetuity

• Public benefit (section 18). Sections 14, 16 and 17 do not apply to a transfer for the benefit of the public in the advancement of religion, knowledge, commerce, health, safety or any other object beneficial to mankind.
• Vested interests. The rule strikes at remote vesting, not at postponed enjoyment. A vested interest is outside it.
• Personal covenants. A contract that creates no interest in property, such as a covenant of pre-emption, is not hit. In Rambaran Prosad v. Ram Mohit Hazra, 1966 INSC 157, AIR 1967 SC 744, the Supreme Court held that a covenant for pre-emption between co-sharers, which did not create an interest in land, was not void for perpetuity.
• Mortgages and leases. The right of redemption, and a covenant in a lease for renewal, are not within the rule.
• Charges and contracts that do not create an interest in immovable property.

4. Class gifts and dependent interests: sections 15 and 16

Section 15. Where an interest is created for the benefit of a class of persons, and in regard to some of them it fails under section 13 or 14, it fails only in regard to those persons and not in regard to the whole class. Before the 1929 amendment the whole gift failed. A to B for life, then to such of B's children as attain 25: a child already living at the date of the transfer will reach 25, if at all, within his own lifetime, so his share is good; a child born afterwards might reach 25 more than eighteen years after B's death, so his share fails, and only his.

Section 16. Where an interest fails by reason of section 13 or 14, any interest created in the same transaction and intended to take effect after or upon the failure of such prior interest also fails. The later interest depends on the void one and falls with it.

5. Section 17: direction for accumulation

Where the terms of a transfer direct that the income arising from property shall be accumulated, the direction is void to the extent that the period of accumulation exceeds the longer of (a) the life of the transferor or (b) eighteen years from the date of transfer. At the end of the permitted period the property and the income are disposed of as if the period had elapsed. Accumulation is allowed without this limit for the payment of the debts of the transferor or any other person taking an interest under the transfer, for raising portions for children or remoter issue, and for the preservation or maintenance of the property.

6. Problem

A transfers his house to his son B for life, then to B's eldest son (not yet born) for life, and then to that grandson's children absolutely. Is the transfer valid?

Issue. Whether the interests in favour of the unborn grandson and his children are valid under sections 13, 14 and 16.

Law. Section 13 requires an interest in favour of an unborn person, subject to a prior interest, to extend to the whole of the transferor's remaining interest. Section 16 makes an interest intended to take effect after a void interest fail with it. Section 14 limits vesting to lives in being plus the minority of the ultimate beneficiary.

Application. B's life interest is valid: B is a living person. The grandson is unborn and is given only a life interest, not the whole remaining interest, so his interest fails under section 13. The gift to the grandson's children is intended to take effect after his life interest; it fails under section 16. It would also fail section 14, because the children of an unborn grandson might take after B's life plus more than one minority.

Conclusion. Only B's life interest is valid. On B's death the house reverts to A or his heirs. Had A given the unborn grandson the house absolutely after B's death, the transfer would have been valid, provided the grandson was born in B's lifetime.

How this is examined

“Explain the provisions relating to transfer for the benefit of an unborn person” and “Explain the rule against perpetuity and its exceptions” are both standard 10-mark questions (both January 2026). For the first, write the text of section 13, the three conditions, the illustration and section 20. For the second, write the perpetuity period, the test of possible vesting, the exceptions with section 18 and Rambaran Prosad, and sections 15 to 17. A problem like the one above can be set as part of either.