Table of Contents
Here we are going to cover the Transfer of Property Act 1882, Part-II of Chapter 2
Transfers of Property by Act of Parties
| Sections | Particular |
| 13 | Transfer for benefit of an unborn person |
| 14 | Rule against perpetuity |
| 15 | Transfer to a class, some of whom come under sections 13 and 14 |
| 16 | Transfer to take effect on failure of prior interest |
| 17 | Direction for accumulation |
| 18 | Transfer in perpetuity for benefit of the public |
| 19 | Vested interest |
| 20 | When an unborn person acquires vested interest in transfer for his benefit |
| 21 | Contingent interest |
| 22 | Transfer to members of a class who attain a particular age |
Transfer for benefit of an unborn person (Section 13)
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.
Example
A transfer’s 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.
The rule against perpetuity (Section 14)
No transfer of property can operate to create an interest that 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.
Transfer to a class, some of whom come under sections 13 and 14 (Section 15)
If on a transfer of property, an interest therein is created for the benefit of a class of persons with regard to some of whom such interest fails by reason of any of the rules contained in sections 13 and 14, such interest fails in regard to those persons only and not in regard to the whole class.
Transfer to take effect on failure of prior interest (Section 16)
Where, by reason of any of the rules contained in sections 13 and 14, an interest created for the benefit of a person or of a class of persons fails in regard to such person or the whole of such class, any interest created in the same transaction and intended to take effect after or upon failure of such prior interest also fails.
Direction for accumulation (Section 17)
(1) Where the terms of a transfer of property direct that the income arising from the property shall be accumulated either wholly or in part during a period longer than-
(a) the life of the transferor, or
(b) a period of eighteen years from the date of transfer, the such direction shall, save as hereinafter provided, be void to the extent to which the period during which the accumulation is directed exceeds the length of the aforesaid periods, and at the end of the such last-mentioned period the property and the income thereof shall be disposed of as if the period during which the accumulation has been directed to be made had elapsed.
(2) This section shall not affect any direction for accumulation for the purpose of-
(i) the payment of the debts of the transferor or any other person taking any interest under the transferor; or
(ii) the provision of portions for children or remoter issue of the transferor or of any other person taking any interest under the transfer; or
(iii) the preservation or maintenance of the property transferred, and such direction may be made accordingly.
Transfer in perpetuity for benefit of public (Section 18)
The restrictions in sections 14, 16, and 17 shall not apply in the case of a transfer of property for the benefit of the public in the advancement of religion, knowledge, commerce, health, safety or any other object beneficial to mankind.
Vested interest(Section 19)
Where, on a transfer of property, an interest therein is created in favor of a person without specifying the time when it is to take effect, or in terms specifying that it is to take effect forthwith or on the happening of an event which must happen, such interest is vested unless a contrary intention appears from the terms of the transfer.
A vested interest is not defeated by the death of the transferee before he obtains possession.
Explanation: An intention that interest shall not be vested is not to be inferred merely from a provision whereby the enjoyment thereof is postponed, or whereby a prior interest in the same property is given or reserved to some other person, or whereby income arising from the property is directed to be accumulated until the time of enjoyment arrives, or from a provision that if a particular event shall happen the interest shall pass to another person.
When an unborn person acquires vested interest in transfer for his benefit (Section 20)
Where, on a transfer of property, an interest therein is created for the benefit of a person not then living, he acquires upon his birth, unless a contrary intention appears from the terms of the transfer, a vested interest, although he may not be entitled to the enjoyment thereof immediately on his birth.
Contingent interest (Section 21)
Where, on a transfer of property, an interest therein is created in favor of a person to take effect only on the happening of a specified uncertain event, or if a specified uncertain event shall not happen, such person thereby acquires a contingent interest in the property. Such interest becomes a vested interest, in the former case, on the happening of the event, in the latter, when the happening of the event becomes impossible.
Exception: Where, under a transfer of property, a person becomes entitled to an interest therein upon attaining a particular age, and the transferor also gives to him absolutely the income to arise from such interest before he reaches that age, or directs the income or so much thereof as may be necessary to be applied for his benefit, such interest is not contingent.
Transfer to members of a class who attain a particular age (Section 22)
Where, on a transfer of property, an interest therein is created in favor of such members only of a class as shall attain a particular age, such interest does not vest in any member of the class who has not attained that age.