TRANSFER TO UNBORN

Explain the process behind transfer in favour of an Unborn person.

Thus the general rule in the Transfer of Property Act is transfer as between living persons but there are some certain section in the Act which provides rules regarding transfers for the benefit of unborn person.
The law relating to transfer for the benefit of unborn persons is provided under section 13 of Transfer of Property Act.

1.No direct transfer: Section 13 gives effect to the general rule that a transfer can be effected only between living persons. There cannot be a direct transfer to a person who is not in existence or is unborn. Such transfer can only be made by the creation of trust. If a transfer was made directly to an unborn person, there would be an abeyance of ownership from the date of transfer till the coming into existence of the unborn person.

2. Prior life interest : The transfer for the benefit of an unborn person must be preceded by a life interest in favour of a living person in existence at the date of the transfer. Where a person intends to transfer certain properties for the benefit of an unborn person, such unborn is the ultimate beneficiary. But since this unborn person is not in existence at the date of the transfer, property cannot be given to him directly. There must be a prior life interest in favour of a living person so that such living person holds the property till the time the unborn child come into existence.
For instance, A would hold the possession of the property and enjoy it. If the unborn person is born during A’s lifetime, the title of the property would immediately vest in the born person who will get the possession of the property only on the death of the life holder.
Similarly if unborn person was never born and A dies, the property would revert back to the transferor, if he is alive or if he is dead, it would go to the heirs of the transferor.

3. Only absolute interest can transfer : The entire property must be transferred to the unborn person. It is not permissible to confer a life interest or limited interest on an unborn person. It means that the transferor must convey to the unborn person, whatever interest they had in the property, without retaining anything with them. Thus, no limited estate can be conferred for the benefit of the unborn person. If a limited interest in the property is settled for him or her, the same would be void.

4. No limit to the number of successive interest in favour of living persons : So long as the person intended to be benefitted are living at the date of the transfer, there is no limit to the number of successive interests which may be created in their favour.
For instance, A transfer his property to X for life and then to Y for life and then to Z for life and thereafter to the unborn child of Z. Here X, Y, and Z are living persons in existence at the date of the transfer. This disposition of property is valid. The property may be given to more than one living persons successively for life before it ultimately vests in the unborn.

The term ‘unborn’ under section 13 of the Act refers to not only those who might have been conceived but are not yet born i.e., child in womb but also includes those who are not even conceived. Whether they will be born or not is also a possibility, but a transfer of property is permissible to be effected for their benefit

In the case of Girish Dutt v. Data Din, AIR 1934 Oudh 35, A made a gift of her properties to her nephew’s daughter B for life and then absolutely to B’s male descendants. But in the absence of any male child of B, to B’s daughter without power of alienation and if B has no descendants male or female then to A’s nephew. B dies issueless. The court held that the gift for life to B was valid as B was living person at the date of the transfer. But gift in favour of B’s daughter was void under section 13 of the Act because it was a gift of only limited interest. She had not been given the absolute interest. The Court also held that since the prior interest was invalid, the subsequent transfer depending on it also failed.