Rule against Perpetuity
5 years ago
Kindly tell me about Sec 13 and 14 of Transfer of Property Act and Sec 113 of Indian Succession Act on the Rule against Perpetuity and how it affects the rights of an unborn person where no absolute rights were vested in the Settlement Deed to the unborn person?.. Thank you
ARPIT BATRA
Responded 5 years ago
A.Kindly engage a local experienced lawyer for the same.
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Deepak Yashwantrao Bade
Responded 5 years ago
A.Dear client kindly consult with experienced property lawyer for better resolution
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A.Dear Client,
Rule against perpetuity has been dealt under section 14 of Transfer of Property Act, 1882
Perpetuity simply means “indefinite Period”, so this rule is against a transfer which makes a property
inalienable for an indefinite period.
What is the perpetuity period?
An optional statutory period of up to 80 years, under the Perpetuities and Accumulations Act 1964. The common law period, which is the lifetime of the last to die of certain individuals alive when the interest is created (known as "lives in being" or "measuring lives") plus 21 years.
What is the Rule against perpetuity in India?
Rule against perpetuity has been dealt under section 14 of Transfer of Property Act, 1882. Perpetuity simply means “indefinite Period”, so this rule is against a transfer which makes a property inalienable for an indefinite period.
Can a gift be made in favour of an unborn person?
"It is quite true that no interest could 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 not, it does not fail in its entirety; it is valid with regard to the persons who are in existence at the time of the testator's death ...Oct 28, 2015
The following ingredients must be present to attract the provisions of Section. 14 –
There must be a transfer of property
The transfer should be to create an interest in favour of an unborn person (i.e. ultimate beneficiary).
The vesting of interest in favour of the unborn must be preceded by life or limited interest of living person/s (i.e. prior interest holder).
•The unborn person must be in existence (either in the mother’s womb or born) at the expiration of the interest of the living person/s.
Conclusion
Therefore S.14 provides a rule against perpetuity i.e. a rule against remoteness of vesting, in absence of which the society shall definitely suffer a loss because of the stagnation of the properties. So this rule against perpetuity ensures free and active circulation of property both for the betterment of the property as well as for the betterment of the society at large.
Section 113 in The Indian Succession Act, 1925. (i) Property is bequeathed to A for his life, and after his death to his eldest son for life, and after the death of the latter to his eldest son.
Shanti Ranjan Behera,Advocate
Rule against perpetuity has been dealt under section 14 of Transfer of Property Act, 1882
Perpetuity simply means “indefinite Period”, so this rule is against a transfer which makes a property
inalienable for an indefinite period.
What is the perpetuity period?
An optional statutory period of up to 80 years, under the Perpetuities and Accumulations Act 1964. The common law period, which is the lifetime of the last to die of certain individuals alive when the interest is created (known as "lives in being" or "measuring lives") plus 21 years.
What is the Rule against perpetuity in India?
Rule against perpetuity has been dealt under section 14 of Transfer of Property Act, 1882. Perpetuity simply means “indefinite Period”, so this rule is against a transfer which makes a property inalienable for an indefinite period.
Can a gift be made in favour of an unborn person?
"It is quite true that no interest could 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 not, it does not fail in its entirety; it is valid with regard to the persons who are in existence at the time of the testator's death ...Oct 28, 2015
The following ingredients must be present to attract the provisions of Section. 14 –
There must be a transfer of property
The transfer should be to create an interest in favour of an unborn person (i.e. ultimate beneficiary).
The vesting of interest in favour of the unborn must be preceded by life or limited interest of living person/s (i.e. prior interest holder).
•The unborn person must be in existence (either in the mother’s womb or born) at the expiration of the interest of the living person/s.
Conclusion
Therefore S.14 provides a rule against perpetuity i.e. a rule against remoteness of vesting, in absence of which the society shall definitely suffer a loss because of the stagnation of the properties. So this rule against perpetuity ensures free and active circulation of property both for the betterment of the property as well as for the betterment of the society at large.
Section 113 in The Indian Succession Act, 1925. (i) Property is bequeathed to A for his life, and after his death to his eldest son for life, and after the death of the latter to his eldest son.
Shanti Ranjan Behera,Advocate
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