Report No. 70
Transfers to Unborn Persons
So far we were concerned with conditions or limitations restraining the assignment or enjoyment of the interest created by a transfer. The object of the provisions prohibiting or restricting the insertion of such conditions is to encourage the free circulation of property. In order to encourage the vesting of interests within a reasonable time, certain provisions could be thought of.
Based on this broad principle, certain rules were evolved in England1-they are no longer in force in their original form. The rules were adopted in India-though in a different form, and perhaps with an unnecessary variation. The beneficiaries whose interests are the subject-matter of the rules are unborn persons. The object of the law is to determine the point of vesting-in England, or to define the quantum of interest-in India.
1. Chapter 21, infra.
20.2. Section 13.-
The freedom of disposition is, then, restricted by the provision in section 13, which concentrates on unborn persons, or rather persons "not in existence" at the date of the transfer. While ordinarily, it is open to the transferor to define the quantum of interest, yet if the beneficiary is unborn or non-existent, certain restrictions have been considered desirable.
Section 13 is in the following terms:-
"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."
(There is an illustration which we are not quoting).
20.3. Scheme of discussion.-
This section is generally understood to codify what is known in England as the rule against double possibilities or the rule against remoteness of limitation, though this is not strictly accurate. We propose to deal, in connection with this section, with a few important questions, namely, the rationale of the rule, the English law, the scope of the rule in relation to conditions which affect the certainty of vesting, and the position of a child in the womb. We shall also deal with the question whether the rule should be retained at all.
It is generally thought that section 13 was an attempt to import into and adopt for use in India what was known in England as the rule against double possibilities. However, the product, as was observed by Blagden J.,1 might have suffered in transit. The proposition in Whitby v. Mitchell-the English rule-was somewhat different, and as will be noted later,2 has been abolished in England.
1. Ardeshir, AIR 1945 Born 395.
2. Para. 29.9, infra.
20.5. Future interests.-
Section 13 assumes a grant to commence in interest at a future time, or in other words, it relates to future estates. We are now concerned with contingent remainders. A contingent remainder may be created by any mode of conveyance, but an executory interest can arise only by the instrumentality of a will, or under the Statute of Uses. The subject of contingent remainders has been dealt with in the Act.
If a grant is made to A for his life, and after his death to B for life and after B's death to C for his life, and so on; the estates of B and C are intended to be as immediately and effectually vested as the estate of A, so that B could take on determination of the estate of A, and C would take on the determination of the two prior estates.
The future estates created in favour of B and C are then spoken of as vested remainders, and their characteristic is that they are always ready to come into possession the moment the prior to estate is determined.1 The gift is immediate, but its enjoyment may be postponed till the determination of the prior estate.
1. Sundar Bibi v. Lal Rajendra Narain Singh, ILR 47 All 496.
20.6. Contingent remainder.-
As contra-distinguished from such an estate, the contingent remainder is not ready from its commencement to its end, to come into possession at any moment when the prior estate may happen to determine1 As an example, suppose that a gift is made to A, a bachelor, for his life, and after determination of that estate by forfeiture or otherwise in his life time, to B and his heirs during the lifetime of A, and after the decease of A to the eldest son of A, and after the decease of A to the eldest son of A and the heirs of his body.
Here B's estate is again a vested remainder, but the estate to A's eldest son is a contingent remainder, for, while B's estate is ready to come into possession whenever A's estate may happen to determine, the estate tail to the eldest son of A is contingent, since A being a bachelor may never marry, or may never have a son to take possession on determination oFthe estates of A and B. But if A should marry and have a son, the contingent estate would then immediately become vested, for then the estate is ready to come into possession on determination of the prior estate.
1. Section 20.
20.7. Propositions in the backgrou.- Transfer to unborn person.-
The rationale of the rule can be best understood if certain fundamental legal propositions-propositions not dealing with the policy of the rule but relevant to an understanding of the significance and operation of the rule-are borne in mind. In the scheme of the Act, a transfer of a property is a transfer made to a living person.1
A transfer in favour of an unborn person-"a person not in existence" at the date of the transfer-cannot be made directly; this is true whether the intended transferee is an unborn human being or a corporation not yet in existence. Though this proposition is not expressly enacted in the Act-as in section 112 of the Indian Succession Act-it is assumed. If a transfer is to be made creating an interest for the benefit of an unborn person or a corporation not yet created, there must, under the terms of the transfer, be created a prior interest.
In this respect, the Act is more liberal than the Hindu law, which did not contemplate transfer of property for the benefit of a person not yet in existence-if we leave aside those borderline cases where dedication was to be made in favour of a deity whose image has not yet been installed.
1. Sections 4-5.
20.8. Dedication to deity.-
A Hindu deity is, in the contemplation of the Hindus, always in existence; the establishment and consecration of a visible image is merely a manifestation. Hence the principle of Hindu law which invalidates a gift other than to a sentient being capable of accepting it does not apply to bequests to trustees for the establishment of an image and a worship of a Hindu deity after the testator's death.1
The principle of remoteness is not unknown to Hindus. It is in fact one of the rules determined in the Tagore case.2 Two Hindu brothers, subject to Dayabhaga Law, executed a deed by which they purported to provide for the permanent devolution of their respective properties in the direct male line, including adopted sons, with the condition, that, in case of failure of lineal male heirs in one branch, the properties belonging to that branch should go to other, subject to the same rule, and, only in the absence of male descendants in the direct line in either branch, the properties were to go to female heirs or their descendants.
Throughout the deed there was no intention to make a gift to any person. The Privy Council held that the deed was void, because it was an attempt to alter the mode of succession prescribed by Hindu law, and that there was no gift over at all, since the devised estate was, in every case, defeasible in the event of his death without male issue.
It happened that as the facts turned out, there was a gift over which could have taken effect, but that did not save the deed, since "that question is not whether the gift ever was good in the event which happened afterwards, but whether it was good in its creatiort".3 A person cannot change the rule of succession under the colour of a fictitious endowment.4
1. (a) Bhupati v. Ramlal, (1910) 14 CWN 18: ILR 37 Cal 128 (FB);
(b) Chaturbhuj v. Chatarjit, ILR 33 All 253;
(c) Parmanandas v. Vinayak, ILR 7 Born 19;
(d) Gokool v. Issur, ILR 14 Cal 22;
(e) Manohar v. Iiikshmi, ILR 12 Born 267;
(f) Puma v. Kalipada, AIR 1942 Cal 386: 46 CWN 477.
2. Tagore v. Tagore, 9 BLR 337 (PC).
3. Purna Shashi v. Kalidhan Rai, 1911 ILR 38 Cal 603 (PC).
4. Sitaram v. Jadunath, 10 LJ 204: 26 IC 72.