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Report No. 70

22.51. Need for reform in India.-

We have so far drawn attention to the problems that have arisen in the application of the rule against perpetuity in India and elsewhere and opportunity has been taken of referring to some of the judicial developments of the subject elsewhere as well as to the reforms introduced by legislation. In the light of this material, the next question to be considered is-how far and in what manner and to what extent the statutory provisions in India on the subject should be amended?

That there is need for amendment is obvious, not because other countries have taken such a need for granted or experience difficulties, but because difficulties can be experienced and have, in fact, been experienced in India, though, perhaps, not on the same scale as elsewhere.

22.52. Apart from the fact that the present sketchy provision is capable of causing injustice, there is an-ethical aspect to it. Usually in the legal system, when A violates a rule, only A suffers-unless, of course, the question is of a detect in the title of A. But, under the rule against perpetuities, when A violates the rule, property is taken away from B and given to C. This is another reason for adopting the approach of "cuffing it down to size". The need for amendment requires no further elaboration. The question then is, in what directions should the law be amended.

22.53. Aspect of unperfecting conveyancing to be taken into account.-

In formulating the proposals for amendments we must take into account the fact that deeds in India are not always drawn by expert conveyancers and those who are consulted may not necessarily be experts in that art. We may say so without meaning any disrespect to the members of the learned profession. This position is not attributable to any deficiency in the intellectual sphere or to any reluctance to learn the art or any inherent incompetence.

It is due to the fact that many practitioners in the mofussil do not have an opportunity of dealing with complicated transactions and, to some extent, it is also due to the social reality that people who execute documents of transfer or wills either are not in a position to consult legal practitioners for financial reasons, or are unwilling to do so from a desire to keep their affairs private, or have an insufficient appreciation of the fact that if they can afford to do so, it would be better to consult a lawyer.

The point to be made is that in the interest of those who will be called upon in future to understand and comply with the law either for the purposes of their own property or as legal advisers to private parties, it is desirable that the amendments should not be so cumbersome as to be practically unintelligible. It is because of this important consideration that a method of selection has necessarily to be employed.

Adopting this approach, it seems to us that not all the amendments made in England could be adopted verbatim in India. Attention must be confined to some of the important propositions which seem to be in need of being introduced into our law, having regard to the problems that have arisen or are likely to arise with some frequency in India.

It seems to us that two reforms could be usefully made in our law. We are concerned only with transfers inter vivos, though, of course, section 114 of the Succession Act stands on the same footing. The two reforms which we have in mind are

(i) regard be had to actual events;

(ii) mischief arising from conditions as to age should be remedied.

22.54. Gist.-

We would set out the gist of the amendments needed in regard to section 14 in the form of propositions which indicate the substance. The drafting device to be adopted to implement them could vary. One possible drafting device would be to re-number present section 14 as sub-section (1) and then to insert the new propositions as new sub-sections. Another possible drafting device would be to insert the new propositions as Explanations to section 14. Yet another possible device would be to insert these propositions as section 14A. This last mentioned device would be useful in the sense that the readability of section 14 will then not be burdened or encumbered.

22.55. Here, then, is a statement of the propositions. We give only the gist thereof and not the exact legislative language. Also, as to the precise legislative device, we leave it to the draftsman.

22.56. Proposition 1.- Our first proposition deals with the date for fixing the application of the rule:

Proposition 1

In applying section 14 to an interest in property limited to take effect at or after the termination of one or more life interest of persons in being when the period mentioned in section 14 commences to run or on or after the termination of lives of persons in being when such period commences to run, the validity of the interest shall be determined on the basis of the facts existing at the termination of such one or more life estates or lives.

Explanation.-For the purposes of this proposition, an interest which must terminate not later than the death of one or more persons is a life interest, even though it may terminate at an earlier time.1

1. The significance of the Explanation is indicated later.

22.57. Effect.-

If such a provision is enacted, the court will determine the validity of the gift by examining the actual facts as they appear at the end of the life interest. To take a simple case, if a fund is given in trust to pay the income to A for life and then to pay the principal on various contingencies to A's son, not being attainment of majority, the amended section requires that the validity be determined, as far as the son is concerned, on the basis of the facts existing at the end of A's life interest.

If, at that point of time, the contingencies have happened-even contingencies which possibly may be postponed beyond majority, the gift is valid.

As to the Explanation, its utility lies in covering the following types of provisions in deeds:

"(1) To my widow so long as she shall remain unmarried.

(2) To A until his age of 30.

(3) To B for 100 years terminable upon his death."

In these cases, the facts upon which the future interest is adjudged under the Explanation to proposition 1, are those existing when, (1) the widow remarries or dies unmarried, (2) A reaches the age of 30 or dies under 30, (3) 100 years pass or B dies, respectively.

22.58. Life in being.-

It may be noted that the first proposition does not project itself beyond the end of the life estates of living persons or the lives of living persons, because there may be practical difficulties in waiting indefinitely to find out what events ultimately happen.

22.59. Proposition 2.-

To deal with conditions as to age, we recommend the following proposition:

Proposition 2

If an interest in property would be void under section 14 because it is contingent upon any person attaining or failing to attain an age in excess of majority, the contingency shall be reduced to the age of majority, as regards all persons subject to the same age contingency.

22.60. Illustrative cases.-

We have already1 referred to some Indian rulings as to age which show the desirability of such a reform. The difficulty arising by reason of the present law which prescribes an age-limit and which looks at the possibilities is furnished by a case which went upto the Privy Council.2 That was, of course, a case of will, but the position would be the same under the Transfer of Property Act.

The testator bequeathed his property to his sons for life and further directed that the share of each son if he left a son or issue of such son living at the death of the last survivor of the testator's son, is to be held for the sons of such son and the issue of his predeceased son per stripes for their life and if the son of the testator left no such son or issue, then for his widow and daughters.

It was held that as the title of the sons of the testator was only for their lives and the bequest to the unborn beneficiaries did not cover the whole of the re-claming interest, section 113 of the Succession Act was violated. But the Privy Council also pointed out that since it was not clear as to whether all the widows would be living at the date of the death of the testator, section 114 of the Succession Act might also come in the way.

1. See para. 22.63.

2. Pultibai v. Sorabji, AIR 1923 PC 122 (126).

22.61. Then, there is a Calcutta case1 dealing with the validity of some of the restrictions. In a Calcutta case,2 the bequest was as follows:-

"When my grandsons may attain their age into five shares and give away the same to their respective sons, that is to say, my grandsons."

It was held that the distribution was to take place only after all these sons who might be born to the sons of the testator should have attained their majority and that it was invalid having regard to sections 101 and 102 of the Succession Act (sections 114-115 of the Act of 1925).

The amendments recommended will meet such cases.

1. Rameshwar P. Singh v. Lachman P. Singh, ILR 31 Cal 111.

2. P.V.S. Pillai v. R.V.M. Pillai, 17 CWN 488.



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