Section 13 of the Transfer of Property Act, 1882 deals with the transfer of property to a person who is not in existence. It reads as “Where, on a transfer of property, an interest therein is created for the benefit of a person not in existence at the date of 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”. In the case of Tagore v. Tagore [1], a child in the womb was considered as an unborn child. The term “unborn” includes not only a child in the womb but an unconceived child as well. There is no certainty as to whether the child would be born or not but a transfer can nevertheless be effected even on the mere possibility of a child’s birth.
ESSENTIALS OF SECTION 13
- NO DIRECT TRANSFER: As per the general rule laid down in Section 5 of the Transfer of Property Act, 1882, a transfer can take place only between two living persons which means both the transferor and transferee must be in existence at the date of the transfer. Thus, no transfer can be made to the dead or the unborn. The only exception to this general rule is the transfer of property by will. That is why Section 13 of the Transfer of Property Act uses the words ‘transfer for the benefit of an unborn child’ instead of ‘transfer to an unborn child’. The reason behind such restriction on the transfer of property to an unborn person is that the property will remain ownerless till the transferee is born and there is also a probability of such an unborn never coming into existence.
- CREATION OF LIFE INTEREST: While a direct transfer of property to an unborn child is impermissible, a subsequent transfer can be facilitated by first creating a life interest in favour of a person already in existence at the time of transfer. This life interest allows the holder and their heirs to enjoy property benefits until the holder’s demise. Upon the birth of the intended beneficiary (the unborn child), a vested interest in the property is established, entailing title and the right to alienate the property. However, possession only transfers upon the death of the life interest holder, with the option to delay until the child reaches 18. If the child is not born during the life interest holder’s lifetime, the property reverts to the transferor or their legal heirs after the holder’s death. Notably, a life interest cannot be directly created for an unborn child, it must be born before the life interest holder’s demise. Once the child gains a vested interest, their title persists, and legal heirs inherit the property even if the child passes away shortly after birth. The critical requirement is the actual existence of the unborn child.
- TRANSFER OF ABSOLUTE INTEREST: There should be a complete transfer of property to the unborn which means that the interest given to the child must be absolute interest in the property and the transferor cannot retain anything with him. After the termination of life interest, the whole of the remaining interest in the property retained by the transferor must be given to the child who was unborn at the time of the creation of the prior interest. A limited interest or life interest cannot be transferred in favour of an unborn child. A transferor can also not create a life interest in favour of a living person, a subsequent life interest in favour of an unborn child and then an absolute interest in favour of another unborn child. Even though the ultimate beneficiary in such a case is getting an absolute interest in the property such a transfer will still be void since it is dependent on a transfer of a limited interest in favour of an unborn child which is void and thus the property will revert to the transferor after the death of life estate holder.
For example – A, an aged man wants to transfer property to his unborn grandson. He cannot do so since the child is not born yet. But what A can do instead is create a life interest in favour of his son B. Immediately after the birth of A’s grandson C, the title of the property will vest in him but B can continue to enjoy and possess property till he is alive. After B’s death, the life interest will end and C will get an absolute interest in the property. In simple words, the possession of property by the child is postponed till the death of the life interest holders but this is subject to the rule of perpetuity under Section 14 of the Transfer of Property Act.
LANDMARK CASE
GIRIJESH DUTT V. DATA DIN [2]
A made a gift of her properties to B, her nephew’s daughter for life and then absolutely to B’s male unborn descendents. In case B has no male descendants, to B’s female descendants but without power of alienation. In case B has neither male nor female heirs then to A’s nephew. B, the life interest holder dies without bearing any children
The gift of properties by A to B was valid since both were living at the date of transfer. The gift by A to B’s unborn son was also valid since an absolute interest was to be transferred but the gift in favour of B’s unborn daughter was void since it was a gift of only a limited interest in the property and thus the transfer was not subject to the provisions of Section 13 of TPA. Since the previous transfer was invalid the subsequent transfer depending on it will also fail and the gifted property shall not be further transferred to A’s nephew.
CONCLUSION
Though direct transfer of property to an unborn child is void indirect transfer for the benefit of an unborn child is valid subject to the provisions of Section 13 of the Transfer of Property Act, 1882 which means that there is no absolute restriction on such transfers in favour of persons not in existence. Since Section 2 of the Transfer of Property Act provides that “nothing in the second chapter of this Act shall be deemed to affect any rule of Mohammedan law” Section 13 does not apply to transfers made by Muslims. Hence this is the current legal position of transfer of property to an unborn person.
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[1] 1872 9 Beng. L.R. 377.
[2] AIR 1934 Oudh 35.
This article is written and submitted by Shagun Sood during her course of internship at B&B Associates LLP. Shagun is a 3rd year B.A. LL.B (hons.) student at HPNLU, Shimla.
