TRANSFER TO CLASS

Explain the law relating to Transfer to Class.

Property may be transferred for the benefit of single unborn person or for the benefit of a class of such persons. In both the situations, the transfer must be made according to the provisions of section 13 and 14. Where the transfer is for the benefit of a single unborn and fails under sec. 13 and 14, then the transferee who is the ultimate beneficiary gets no property. But under section 15 it is provided where a property is transferred for the benefit of a class or unborn persons and the transfer fails with regard to only some of them under section 13 and 14 then the whole transfer is not void. It fails in regard to those transferees who are unable to take either because of remoteness under section 13 and because of rule against perpetuity under section 14. The transfer in regards to other transferees is valid and takes effect.

The principle underlying the section is that as far as possible the transfer should be given effect to. Prior to 1929, the rule was that if by the same transfer an interest was created in favour of a class of persons, with respect to some of which it was void, and for some valid, the interest failed with respect to all of them. The law presently makes the transfer valid and effective for those, for whom it is capable of taking effect.

For instance, X transfers his property to his son S, for his life and then to his grandsons, when they attain the age of 18 years and to his daughters when they reach the age of 21 years. S had no child at the time of the transfer. This transfer created a life interest in favour of a living person (son), which is permissible in law, but with respect to the children of son, who were not in existence at the time of transfer, the transfer for the benefit of the unborn sons of S was valid but for unborn daughters, it is void as violative of rule against perpetuity. As it stood before 1929, section 15 would have made the transfer in favour of both the unborn sons and daughters’ void. However, after the amendment, and under the present law, the transfer in favour of only the granddaughters will fail, but the same in favour of grandsons would be valid and will be given effect to.

In the case of Raji Bajrang Bahadur Singh v. Thakurian Bakhtraj Kaur (AIR 1953 SC 7), a property bequeathed to A for life, then to A’s heirs successively for life, then to B and his heirs. After A’s death, his widow as well as B claimed the property. B contended that as the Will created a life interest in favour of A’s widow and his unborn heirs, this not being permitted under sec. 13 Transfer of Property Act, the Will was void.

The court observed it is true that no interest could be created in favour of an unborn person, but when the gift if made to 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’ death and is invalid as to rest.

The court held that the widow was entitled to claim the life interest as she was in existence when the testator dies though some of heirs of A may be unborn. B could claim property only after her death.