What is Transfer to an Unborn Person?
Meaning of Transfer to an Unborn Person: – The Unborn person is the one, who is not in existence, maybe born in future but does not have a current legal existence. Section 13 of the Transfer of Property Act, 1882 provides that where, on a transfer of property, an interest therein is created for the benefit of an unborn person or 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.
Although a child in the womb is usually not a person in the existence but it has been treated so under both Indian and English law. Section 13 of the Transfer of Property Act defines a transfer to an unborn person.
Thus, in order to transfer a property for the benefit of an unborn person on the date of the transfer, it is imperative that the property must first be transferred by the mechanism of trusts in favour of some person living other than the inborn person on the date of transfer. In simpler terms, it can be said that the immovable property must vest in some living person between the date of the transfer and the coming into existence of the unborn person as the property cannot be transferred directly in favour of an unborn person.
According to Section 13 of Transfer of Property Act : – 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.
For Example: – “A” owns a property. He transfers it to “B” in trust for him and his intended wife successively for their lives. After the death of the survivor, it is to be transferred to the eldest son of the intended marriage for his life, and after his death, it is to be transferred to 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.
What is the status of an unborn child?
Status of an Unborn Child: – There is no law to prevent a man from owning the property before he is born. His ownership is necessarily accidental indeed he may never be born at all but it is no less than the current and real owner. A child in his mother’s womb is considered as already born for many purposes in accordance with a legal maxim “nasciturus pro jam nato habetur”.
Thus in the property law, there is a fiction that a child “en ventre sa mere”, a person in life choosing to form a part of the period in the rule against perpetuity.
According to the property law, the unborn child can have certain rights and inherit the property but only when he is alive, although the unborn child cannot be treated as a person in existence, his/her rights may be vested in the hands of his/her trustee.
Section 13 of Transfer of property act states that: –
- If anyone wants to transfer property to an unborn person in that case property cannot be directly transferred to that unborn person.
- Prior life interest must be created, that Property will be with that person until the child is unborn.
- There must be a transfer of an absolute interest in favour of the unborn person.
What are the essential elements of section 13 of transfer of property act?
The essential elements of section 13 have been discussed below. They are as follows: –
- No Direct Transfer
- The Direct transfer of property to an unborn person cannot be done. Such transfer can only bring into existence by a mechanism of trust.
- It is a cardinal principle of property law that every property will have an owner. Accordingly, if the property is transferred to an unborn person, it will give rise to the scenario, in which the property will remain without an owner till the date the unborn person comes into existence.
- Prior Interest
- If the circumstances are such that there is no creation of trust, then in that case the estate must be in possession of some other person between the date of transfer and the date when the unborn person comes into existence. In simpler words we can say that the interest in favour of an unborn person must always be preceded by a prior interest created in favour of a living person.
- In this, the property is being kept with a person between the date of transfer and the date when the unborn person comes into existence.
- Or we can say that the interest in favour of an unborn person will always come before the prior interest created in favour of a living person.
- Absolute Interest
- The entire property should be transferred to the unborn person. The transfer of property should be done wholly in the name of an unborn person and no further transfer to any other person.
- An interest that lasts only for life cannot be given to an unborn person.
Pre-requisites for a valid transfer of property to an unborn person
Section 13 provides a specific mechanism for transferring the property for the benefit of an unborn person. The procedure as follows: –
- The person intending to transfer the property for the benefit of an unborn person should first create a life interest in favour of a living person and after it, an absolute interest in favour of the unborn person.
- Till then the person, in whose name a life interest is created should be alive, he would hold the possession of the property, enjoy its usufruct i.e. enjoying the property.
- If the unborn person during the period of creation of life interest, comes into existence or born, the title of the property will immediately get transferred to the person born but he will get the possession of the property only on the death of the person who is holding life interest in the property.
Case Laws under Transfer of Property to an Unborn Person
- In the famous case of Girjesh Dutt vs. Datadin, the Apex Court made important observations. In this case “A” made a gift of her properties to “B”, who was her nephew’s daughter. The gift made by ‘A’ was made for the life of ‘B’ and then to B’s daughter without power of alienation and if there was no heir of ‘B’, whether male or female, then to A’s nephew. ‘B’ died without having any children. Thus considering the facts of the case, the court held that the gift in favour of unborn daughters was invalid under Section 13 as the gift was a limited interest and also subject to the prior interest in favour of ‘B’.
- In case related to this concept is of Raja Bajrang Bahadur Singh v. Thakurdin Bhakhtrey Kuer, the Apex Court had observed that no interest can be created in favour of an unborn person but when the gift is made to a class or series of persons, some of whom are in existence and some are non existent, it does not fail completely, it is valid with respect to the persons who exist at the time of testator’s death and is invalid with respect to the rest.
Thus from the above discussion it is clear that the transfer of property can be executed in respect of unborn persons. Though, the transfer cannot be operated directly but it can be executed indirectly by the machinery of trusts. In other words, the interest in favour of the unborn person shall constitute the entire interest in that particular immovable property. The underlying fundamental principle enshrined under section 13 of the Transfer of Property Act is that a person disposing off property to another person shall not create hurdles for the free disposition of that property in the hands of one or more generations.
Thus, for the validity of a transfer in favour of an unborn person, it is important that the whole of the remaining interest of the person transferring the property should be conveyed to the unborn person. Moreover, as soon as the transfer of property comes into operation, the vested interest is also transferred to the unborn person. The transfer of immovable property to unborn persons can, thus take effect only according to the provisions discussed above. Else, the transfer will be declared as void.