Abstract
The Transfer of Property involves creating rights for the benefit and interest of a person. When property is transferred for the benefit of an unborn individual, the intention is to protect that person’s future rights and secure their interest once they are born. This principle ensures that an unborn child or future legal heir receives the advantages and rights meant for them after their birth. The idea is grounded in equitable principles as well as the law of trusts. Such a transfer takes effect when a person (the transferor) conveys property or makes a gift with the purpose of benefiting a person who is not yet in existence at the time of the transfer. This legal arrangement plays an important role in safeguarding the future claims and benefits of unborn persons.
INTRODUCTION
Section 5 of the Transfer of Property Act, 1882 states that a transfer of property must take place between two living persons, either in the present or the future, and may involve more than one living individual. The expression “living persons” is broad and includes not only natural persons but also legal entities such as companies, associations, and bodies of individuals. This provision establishes the general rule that property can only be transferred between persons who are legally in existence.
However, Section 13[1]of the Act provides an important exception to this rule. It allows immovable property to be transferred for the benefit of an unborn person. An unborn person, in this context, refers to someone who is not yet in existence not even in the mother’s womb but may come into existence in the future. Although a child in the mother’s womb is not technically considered a living person for the purpose of Section 5, both Hindu Law and English Law recognize such a child as a legal person for certain purposes.
SECTION 13 OF TRANSFER OF PROPERTY ACT,1882:
Section 13 of the Transfer of Property Act, 1882 establishes conditions for transferring property for the benefit of an unborn person.
It mandates that to facilitate such a transfer, a prior interest must be created in favour of a living person before extending it to the unborn beneficiary. This prerequisite prevents a direct transfer to the unborn person and ensures that the interest granted to them encompasses the entire remaining interest of the transferor.
The section aims to maintain the unobstructed flow of property disposition across generations, restricting the creation of time-limited interests solely for unborn individuals. While successive life interests can be granted to living beneficiaries, absolute interests are required for those not yet born.
In Girjesh Dutt v. Data din, the court held that the gift for life to B was valid because B was a living person at the date of transfer but the gift in favour of B’s daughter was void under Section 13 TPA because she was given only limited interest, she had not given absolute interest. Since this transfer was invalid, the subsequent transfer depending on it also failed.[2]
The Court highlighted that while direct transfer is impermissible, the law does allow for valid transfer for unborn persons, provided they are structured correctly and comply with section 13, not creating undue impediments to property clearance.[3]
[1] 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.
[2]Girjesh Dutt v. Data din AIR (1934)Oudh35.
[3]J.Ramkumar v N.Chandrasekaran ,2023