Generally, property is transferred between two living persons, the person also includes company, firms, organizations, associations etc. But can a property transferred to an unborn person? What does the law speak about it?
The object of the Transfer of Property Act, 1882 is to define and amend certain parts of laws relating to the transfer of property by act of parties.
Transfer by an act of parties means those transfers which take place between two living beings, these transfers are also called as the transfer of “inter vivos.” For example, sale or gifts are transfer by act of parties because at the date of such sale or gifts both the transferee and transferor are living.
Transfer to unborn person:
There cannot be any direct transfer of property to an unborn person. Unborn person means a person who is not in existence even in mother’s womb.
A child in mother’s womb is a competent transferee and property can be transferred to a person who is in existence in the mother’s womb. But property cannot be transferred to a person who is not even in mother’ womb because such a person is an unborn person.
As per Section 5 of Transfer of Property Act, 1882, transfer of property shall take place only between two living beings, it means the transferee must also be in existence at the date of such transfer.
The reason why property cannot be transferred directly to an unborn person is, every transfer of property evolves transfer of interest when the property is transferred, and the transferor divests himself of that interest and vests it immediately to the transferee. So, if a property is transferred directly to a person who is not in existence, the interest has to remain in abeyance (void) and wait for the transferee to come into existence.
Accordingly, If A makes a gift of his property to the eldest son of B, who is unmarried. The gift shall be void.
Transfer for the benefit of unborn person:
Property cannot be transferred directly to an unborn person but property can be transferred for the benefit of an unborn person under Section 13 of the Transfer of Property Act, 1882.
Section 13 provides that a property can be transferred for the benefit of an unborn person if such transfer fulfils these two conditions-
(I) Transfer for the unborn person must be preceded by a life interest in favour of a person in existence who is living at the date of the transfer.
(II) Only absolute interest may be transferred to an unborn person.
Transfer for the unborn person must be preceded by a life interest in favour of a person in existence who is living at the date of the transfer.
Where a person intended to transfer certain properties for the benefit of an unborn person, such unborn person is the ultimate beneficiary but since such unborn person or ultimate beneficiary is not in existence at the date of transfer, property cannot be given to him directly. There must be a prior life interest in favour of a living person holds the property during his life and till the time the unborn person would come into existence.
After the death of the person holding the property for life, the interest would pass ultimately to the unborn person.
Thus in between the transferor and the unborn person, there must be an intermediary living person who may hold the property in trust for the benefit of the unborn person.
For example, A transfers his house to X and thereafter to B who is an unborn son of A. the transfer of house in favour of unborn B is valid. Here since B is not in existence at the date of the transfer. A could not transfer it to B directly.
So, A had to make a direct transfer of life interest in favour of X who is a living person at the date of transfer. After the death of X the interest of the house shall pass to B, who is the ultimate beneficiary.
The unborn person must come into existence before the death of the person holding the property for life. If the unborn person comes into existence after the one month of the death of the person holding the property, the property shall revert back to the transferor and his heirs.
Only absolute interest may be transferred to an unborn person.
Only absolute interest in the property may be transferred in favour of an unborn person, limited or lif interest cannot be given to an unborn.
Transfer of property for life of an unborn person is void. As per section 13 of the Transfer of Property Act, 1882 interest given to an unborn person must be the whole of the remaining interest of the transferor in the property.
So, when property is transferred in favour of an unborn person, the transferor first gives a life interest to an existing person. After transferring it, he retains with him the remaining interest of the property. This remaining interest with the transferor must be given to the unborn so after the termination of prior life interest, the unborn gets the whole or absolute interest in the property.
Girijesh Dutt v/s Data Din
The facts of the case are A made gift of her properties to her nephew’s daughter B for life and then absolutely to B’s male descendants if she should any. But in the absence of any male child of B, B’s daughter without the power of alienation, and if B has no descendants male or female then to her (A’s) nephew. B dies issueless.
The Court in this case held that the gift of life to B was valid as B was living at the date of the transfer but the gift in favour of B’s daughter was void under Section 13 of Transfer of Property Act, 1882 because it was a gift of limited interest (gift without power of alienation), she had not been given absolute interest. Since the transfer was void the subsequent transfer to A’s nephew also failed.
Transfer in favour of unborn under Hindu Law:
Under pure Hindu law, a gift or bequest in favour of unborn was void. But now the Transfer of Property Act is applicable to the Hindus, so the transfer of properties in favour of an unborn person is valid if it fulfils the conditions provided in Section 13.
Transfer in favour of unborn under Muslim Law:
In Muslim law a gift in favour of a person not in existence is void, and Section 2 of the Transfer of Property Act provides that nothing shall be deemed to affect any rule of Mohammedan Law. So, Section 13 of the Transfer of Property Act, 1882 is not applicable to transfers made by Muslims.
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