Rul eagai nstPerpet ui t y I nt r oducti on Ther ul easr egar dst het r ansf erofpr oper t yf ort hebenefitofunbor nper son and t her ul eag ai ns tpe r pe t ui t y( c ol l e c t i v e l y ,t he" Rul e s " ) ,whi c h ar emai nl y g ov e r ne dbys e c t i o ns13and14,r e s pe c t i v e l y ,o ft heT r ans f e ro fPr o pe r t yAc t , 1882 ( " TOPA" ) ,have,si ncedecades,t r oubl ed l awyer sofal lagesacr osst he count r y .TheseRul esar e of t en des cr i bed as one oft he mostcomp mpl i cat ed l e galr ul e se ve r . Wher epr oper t yi sdesi r ed t obet r ansf er r ed/ bequeat hed byanyper son,t o mor egener at i onst han one,i ti si mper at i vet hatt heseRul esar econf orme med t o.
Ori gi n Theor i gi n ofr ul eagai ns tper pe t ui t ys t emsf r om t hedaysoff eudalEngl and asf arback asi n 1682 f r om t hecaseofDukeofNor f ol k' s,wher ei n,Henr y ( t he22ndEar lo fAr unde l ) ,t r i e dt oc r e at eas hi f t i nge x ec ut or yl i mi t at i oni na wayt hatoneofhi st i t l eswoul d passt ohi sel des tson ( whowasment al l y defici ent )and t her eaf t ert ohi ssecondson,and anot hert i t l ewoul d passt o hi s sec ond son and t her eaf t er ,t o hi sf our t h son.The es t at e pl an al so i nc l ude d pr o v i s i o nsf ors hi f t i ngt het i t l e smanyg e ne r a t i onsl at e r ,i fc e r t ai n condi t i onswe wer et o occur .I twas hel d by t heHo HouseofLor dst hats uch a shi f t i ng condi t i on coul d not exi st i ndefini t el y and t hat t he t yi ng up of pr oper t yt oo l ongbey ond t hel i vesofpeopl el i vi ngatt het i mewas wr ong. Theconceptoft r yi ngt ocont r olt heuseanddi sposi t i on ofpr oper t ybe y ond t he gr ave was of t en r ef er r ed t o as cont r olby t he " dead hand" .The r ul e agai ns t per pe t ui t y ,i n Engl and, was l at er codi fied i n t he f or m of t he Per pet ui t i esandAccumul at i onsAct ,1964.
I l l us t r at i ons •
Wi t havi e wt ounder s t andt heRul es,l e tusfir s tconsi dert hef ol l owi ng fiv ei l l us t r at i ons :
A i . t r ans f e r shi spr o pe r t yt oB ( hi sunbo r nc hi l d) .
A i i . t r ansf er s hi s pr opert yt oB( hi sc hi l d)f or l i f e ,t he r eaf t e r t oC ( hi s unborn gr andchi l d) f or l i f e and final l y ,t oD ( hi s unborngreatgrandchi l d)absol ut el y . A i i i . t r a ns f e r shi spr o pe r t yt oB ( hi sc hi l d)f orl i f eandt he r eaf t e r t oC ( hi sunborn gr andchi l d)absol ut el ywhi ch pr oper t yi st o v es ti nC whenheat t ai nst heageoft went yoneyear s. A i v . t r ansf er s hi s pr opert yt oB ( hi sc hi l d)f or l i f e ,t her e af t e r t oC ( hi sunborn gr andchi l d)absol ut el ywhi ch pr oper t yi st o v es ti nC upon bi r t h.Howev er ,C i s unbor nt i l lt he t i me of deat hofB. A v . t r ansf er s hi s pr opert yt oB ( hi sc hi l d)f or l i f e ,t he r eaf t e r t oC ( hi sunborn gr andchi l d)absol ut el ywhi ch pr oper t yi st o v es ti nC uponbi r t h.C i sbornbef or et hedeat hofB. •
Fr o mt heaf o r e s ai dfiv e( 5)i l l us t r at i o ns ,o nl yt het r ans f e rs o ug htt obe madei nf avouroft heunbornper son i ni l l ust r at i on " v"wi l lt akeeffect . Thet r ansf er ssoughtt obemadei nf av ouroft heunbor nper soni nt he r emai ni ng i l l ust r at i ons wi l lf ai l and not t ake effect .I n or der t o under st andt herat i onal ebehi ndt hef ai l ur eofsuchpr oposedt r ansf er i nf av ourofan unbor n per son,i ti s nec es sar yt o under s t and t he r e l e v antpr o v i s i o nswi t hr e s pe c tt ot heRul e s .
Rul ef orTr ansf erofPr opert yf ort heBenefitof UnbornPer son •
Sect i on13ofTOPA pr ovi dest hat : " Whe r e ,o n at r ans f e rofpr o pe r t y,ani nt e r e s tt he r e i ni sc r e at e df o rt he be ne fito fape r s onno ti ne xi s t e nc eatt hedat eo ft het r ans f e r ,s ubj e c tt o apr i o ri nt er e stc r e at e d byt hesamet r ans f e r ,t hei nt e r e stc r e at e df o rt he be ne fito fs u c h pe r s o ns hal lno tt ak ee ffe c t ,unl e s si te x t e nds t ot he who l eoft her e mai ni ngi nt e r e sto ft het r ans f er o ri nt hepr o per t y. "
Rul eagai nstPerpet ui t y •
Sect i on14ofTOPA pr ovi dest hat : " Not r ansf erofpr opert ycan oper at et ocr eat ean i nt er estwhi ch i st o t akee ffe c taf t e rt hel i f et i meofo neormo r epe r s o nsl i v i ngatt hedat e
ofsuch t r ansf er ,and t he mi nor i t y ofsome per son who shal lbe i n exi st enceatt heexpi r at i on oft hatperi od,and t owhom,i fheat t ai ns f ul lag e,t hei nt e r e stc r e at e di st obe l ong. "
Anal ysi sofPr ovi si ons •
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Sec t i on 13 and 14 oft he TOPA go hand i n hand,i n as muc h as , sect i on 13 and 14 ar et ober ead t oget heri n or dert ounder st and t he pr ovi si onsgoverni ngt heRul es.
nf avourofan TheTOPAdoesnotper mi tt r ansf erofpr oper t ydi r ect l yi unbornper son.Thus,i nor dert ot r ansf erapr oper t yf ort hebenefitof aper so nunbor nont ti si mpe r at i v et hatt he hedat eoft het r ansf er,i pr oper t y mus t fir s t be t r ansf er r ed i n f av our of some ot her i vi ng on t he dat e oft r ansf er.I personl n ot herwords,t hepr opert y mus tve s ti n someper son be t wee nt he dat eoft het r ansf erand t he comi ngi nt oexi st enceoft heunborn per son si ncepr oper t ycannotbe t r ansf err eddi r ect l yi nf avourofanunbornper son.I not herwords,t he i nt er es toft heunborn per son must ,i n eve rycase,bepr eceded by a pr i ori nt e r es t . Fur t her ,wher eani nt er esti scr eat edi nf avourofan unbornper sonon at r ansf erofpr oper t y ,such i nt er esti nf avouroft heunborn per son shal lt ake effect onl yi fi t ext ends t ot he whol e oft he r emai ni ng i nt e r e s to ft het r ans f e r o ri nt hepr o pe r t y ,t he r e b ymaki ngi ti mpo ss i bl e t oconf eran est at ef orl i f eon an unborn per son.I n ot herwor ds,t he i nt er esti nf avour oft he unborn per son shal lconst i t ut et he ent i r e r emai ni ng i nt er est .The under l yi ng pri nci pl ei n sect i on 13 i st hata per son di sposi ng of pr oper t yt o anot her shal l not f et t er t he f r ee di sposi t i onoft hatpr oper t yi nt hehandsofmor et han onegener at i on. Sec t i on 13 doesnotpr o hi bi ts uc c e s si v ei nt e r e s t s( l i mi t e d by t i meo r i vi ng o t he r wi s e )be i ngc r e a t e di nf a v ouro fs e v e r a lpe r s o nsl att het i me oft he t r ansf er .Whati spr ohi bi t ed undersect i on 13 i st he gr antof i nt er est ,l i mi t edbyt i meorot herwi se,t oanunbornper son. Furt her ,Sect i on 14ofTOPA pr ovi dest hatwher ean i nt er esti scr eat ed f ort hebenefitofan unbornper son ( i naccor dancewi t ht hepr ovi si ons ofs e ct i on 13) ,s uc hi nt e r e s ts hal lno tt akee ffe c ti ft hei nt e r e s ti st o v es ti n suc h unbor n per sona t hel i f et i meofoneormor eper sons fter l i vi ngon t hedat eoft het r ansf er( i . e.t heper son i n whosef avourt he pr i o ri nt e r e s ti sc r e at e dasr e q ui r e dunde rs e c t i o n 13) hemi nori t y andt ofsuch unborn per son.I n ot her wor ds,t hei nt er es tcr eat ed f ort he
benefitofan unbor n per son shal lt akeeffectonl yi ft hei nt er es ti st o b or ehe at v es ti n suc h unbor n per so n ef t ai ns t he age ofei ght een y ear s. •
Sect i on 14 f ur t herpr ovi dest hatt heunborn per son,i n whosef avour t he i nt er es ti s cr eat ed, mus t hav e come i nt o exi s t enceon or bef or et hee xpi r yo ft hel i f eo rl i v e so ft hepe r s o n( s )i n whos ef a v our t hepr i o ri nt e r e s ti sc r e a t e dasr e qui r e dunde rs e c t i o n 13.
Ot herRel evantPr ovi si ons •
Sect i ons 113 and 114 of I ndi an Successi on Act , 1925 ( " I SA" ) :Sec t i ons 113 and 114 of t he I SA ar e al mos ti dent i calt o se ct i ons 13 and 14, r es pect i v el y , of TOPA. The mai n di ffer ence be t ween t hepr ovi si onsundert heI SA andt hepr ovi si onsunderTOPA i st hatt hef or merdeal swi t h beques t swhi ch t akeeffec tonl yon t he de at hoft het e s t a t o rwhi l et hel at t e rr e l at et ot r a ns f e rofpr o pe r t yi nt e r vi v os.Sect i on 13 ofTOPA cont r ol s Sect i on 113 ofI SA and bot h of t hem ar et o be r ead t og e t her ,as opi ned by t he Apex Cour ti nRaj Baj r ang Bahadur Si ngh vs. Thakur ai n Bakht r aj Kuer( AI R 1953 Supr eme Cour t 7) .I t was f ur t her obse r v ed by t he Cour tt hat : " I ti sq ui t et r uet hatnoi nt e r e s tc o ul dbec r e at e di nf av ouro fanunbo r n per sonbutwhent hegi f ti smadet oac l assorser i esofper sons,some ofwhom ar ei n exi st ence and some ar e not ,i tdoes notf ai li ni t s e nt i r e t y;i ti sval i dwi t hr e gar dt ot hepe r s onswhoar ei ne xi s t enc eatt he t i meo ft het es t at o r ' sde at handi si nv al i dast ot her es t . "
Rul esSi mpl i fied •
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Theeffectoft heseRul esi st hata t r ansf er / gi f tcan bemadet o an unbor n per son subj ec tt o t he f ol l owi ng condi t i ons: ( i )t hat t he t r ansf er / gi f tshal lbe oft he whol e oft he r emai ni ng i nt er estoft he t r ansf er or/t est at ori nt het hi ngt r ansf err ed/bequeat hedandnotofa l i mi t e di nt e r e s t ;and ( i i )t hatt hev e s t i ngi sno tpos t pone d be y o nd t he l i f ei nbei ngandt hemi nori t yoft heunbornper son. I n si mpl et er ms,whi l esec t i on 13 ofTOPA l aysdown t hemec hani sm what f ort r ansf erofpr oper t yf ort he benefitofunborn per son and" sr equi r ed t o be ul t i mat el yt r ansf er r ed i nf avour ofan pr oper t y"i unborn per son i n or dert oval i dat esuch t r ansf er ,sect i on 14 ofTOPA
pr ovi des t he" uc h pr ope r t y can be max i mum pe r i od as t o when"s v es t eduponsuc hunbor nper son. •
Sec t i on 14 ofTOPA suppl ement ssec t i on 13 ofTOPA and t hus,i ti s pert i nentt onot et hatwhen an i nt er esti n anypr opert yi si nt endedt o bet r ansf er r ed i nf av ourofan unbor n per son,sect i ons13 and 14 of TOPA ar er equi r ed t o ber ead t oge t herand t hepr ovi si onscont ai ned t her eunderar er equi r ed t o be dul y compl i ed wi t h,i n or dert o gi ve effectt ot hei nt endedt r ansf eri nf avourofsuchunbornper son.
