B.A. LL.B. (Five Years) Sem 6 Property Law 2013 Jun Question Paper with Solutions

Yet people often want to provide for children not yet born, such as a future grandson. Sections 13 to 16 and 20 allow this, but only through a prior interest given to someone alive. That is why examiners call the transfer for the benefit of an unborn person an exception to the rule of transfer inter vivos.

Section 13: the two conditions

Section 13 provides that where an interest 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", it "shall not take effect, unless it extends to the whole of the remaining interest of the transferor in the property". Two conditions follow.

1. A prior interest must be created by the same transfer. The property first goes to a living person, usually for life. That living person, or a trustee, holds the estate until the unborn person comes into existence.
2. The unborn person must take the whole remaining interest. He cannot be given only a life estate. Whatever is left of the transferor's interest after the prior interest must go to him absolutely.

2. Invalid under section 13. Ravi transfers to Lata for life, then to their unborn eldest son for life, then to the son's children. The unborn son gets only a life interest, not the whole remaining interest, so his interest fails. Under section 16, the gift to his children, which depends on it, fails too.
3. Invalid under section 14. Ravi transfers to Lata for life, then to their unborn eldest son when he reaches 25. The son takes the whole interest, so section 13 is met, but his interest might vest more than eighteen years after Lata's death. It is void for remoteness.

Sections 15 and 16: what happens when an interest fails

1. Section 15. Where an interest is given to a class and fails under section 13 or 14 for some members only, it fails "in regard to those persons only and not in regard to the whole class".
2. Section 16. Where the interest fails for the person or the whole class, any interest created in the same transaction and intended to take effect "after or upon failure of such prior interest also fails". A gift over that depends on the void interest falls with it.

The High Court held that a transfer for an unborn person's benefit is valid under section 13 only if it carries the whole remaining interest. It must also be read with section 14. The deed met both conditions. The later-born grandsons therefore took the property with the appellant "as tenants in common". The plea of adverse possession failed. The case shows that a properly framed deed can benefit children born long after it is made.

Before birth: a contingent interest

Until the child is born, his interest depends on an uncertain event, his birth. Rukhamanbai v. Shivram, (1981) 4 SCC 262, decided on 3 September 1981, concerned a settlement of 1930. It gave the appellant a life interest in agricultural land, with the land to her children after her death. When tenants applied to buy the land under the Bombay Tenancy Act 1948, she argued that her children already held a vested interest. The Supreme Court held that her own life interest was vested. But "the interest of future born children would be contingent till the death of the appellant". Section 20 then explains what happens once such a child is born: he takes a vested interest at birth, unless a contrary intention appears.

Conclusion. An unborn person cannot take property directly, because section 5 requires a transfer between living persons. Section 13 allows a transfer for his benefit only through a prior interest created by the same transfer. He must also receive the whole remaining interest. Section 14 confines vesting to lives in being plus a minority, and section 16 strikes down interests that depend on a void one. Before birth the child's interest is contingent, as Rukhamanbai shows. Under section 20 he takes a vested interest at birth, as the grandsons did in T. Subramania Nadar.