Report No. 70

25.7. Comparison with the English law.-

It may be noted that the provision in England is more liberal than section 17, and permits accumulation for the longer of several alternative periods mentioned in section 164 of the Law of Property Act, 1925, slightly amended in 1964. In contrast, under section 17 of the Transfer of Property Act, the period is reduced to 18 years or life of the transferor.

In England, on the other hand, the period is more elastic. The question then arises whether there is need to revise our law, or whether it should be kept as it is. It appears to us that some of the provisions made in English law are worth adopting in our section inasmuch as such liberalisation is not likely to create any practical difficulties and, speaking theoretically also, the law should not object, as a matter of policy, so long as income is not tied up for an unduly long time.

After all, the period of life of the transferor or the period of 18 years from the date of the death of the transferor is not the only reasonable period, and there could be cases where a direction expressed differently may yet be reasonable. For example, a period of 18 years from the date of the death of the transferor or a period expressed as expiring with the minority of a living person or a person living at the date of the death of the transferor would, prima facie, appear to be reasonable.

25.8. We have taken note of the fact that the English law is more liberal than section 17, inasmuch as a term of twenty-one years from the death of the grantor, settlor or testator is allowed in England as one of the permissible period-in addition to any other alternative periods mentioned in the law.1 It also permits the alternative of expiry of minority. There is also the fact that the English law has regard to persons in the womb. With suitable adaptations, these alternative periods are worth adding to the section.

1. Section 164, Law of Property Act, 1925, as amended in 1964.

25.9. Hindu law.-

We may note that the Hindu law was not right. As far back as 1855, no less an authority than Colville C.J., delivering the judgment of the Supreme Court of Calcutta,1 expressed the opinion that it was competent to Hindu testator expressly to provide for the accumulations of the surplus income of his estate within the limit allowed by law and to make those accumulations subject to a limitation order as there described.

Thus, a direction to accumulate is not fundamentally bad; it is bad only if it offends some independent rule of Hindu law. Thus, it may infringe the rule against perpetuities or be repugnant and void as an attempt to deprive a person of the enjoyment of that which has become his property. In Watkins v. Administrator-General, 1914 ILR 47 Cal 88 (93), Jenkins, C.J., observed that, on principle, an accumulation can be validly directed, for so long as at a time as the absolute vesting of the entire interest can be withheld, or for so long a time as that during which the corpus of the property can be rendered inalienable, or its course or is devolution can be directed and controlled by a testator.

This is an additional consideration for making the law liberal within due limits.

1. Sooryumoney Dossee v. Dinoobandoo Mullick, (1855) 1 Boulnois 223, cited by Jenkins, C.J. in Watkins v. Administrator-General, 1914 ILR 407 Cal 88 (91, 92).

25.10. Recommendation as to section 17(1).-

Accordingly, we recommend that section 17(1), clauses (a) and (b), should be revised to read as under:

"(a) the life of the transferor, or

(b) a period of eighteen years from the date of the transfer, or

(c) a period of eighteen years from the date of the death of the transferor, or

(d) the minority of any person living or in the womb at the date of the transfer or at the date of death of the transferor."

25.11. Amendment of section 17(2).-

As to sub-section (2) of section 17, we recommend the addition of a further exception in these terms-

"(iv) the accumulation of the produce of timber or wood."

This has been suggested by the corresponding exception in England,1 which reads-

"(iii) respecting the accumulation of the produce of timber or wood."

We believe that this amendment should not raise any controversy.

1. secion 164(2)(iii), Law of Property Act, 1925.