A transfers property "to B for life, then to B's eldest son." B has no son at the time of transfer. Discuss the validity.

Validity of the Transfer: "To B for Life, Then to B's Eldest Son"

Statement of the Governing Legal Principle

Where property is transferred "to B for life, then to B's eldest son," and B has no son at the time of the transfer, the disposition engages section 13 of the Transfer of Property Act, 1882, which governs transfers for the benefit of persons not in existence at the date of the transfer, subject to a prior interest.

The validity of such a transfer depends upon whether the interest created for the unborn person (B's eldest son) extends to the whole of the remaining interest of the transferor in the property. Section 13 permits a transfer for the benefit of an unborn person only if: (i) a prior life interest is created in favour of a living person at the date of the transfer, and (ii) the ultimate interest conferred upon the unborn person is absolute, not limited.

Analysis of the Present Transfer

(1) Creation of a Prior Life Interest in Favour of a Living Person

The transfer creates a life estate in favour of B, who is alive at the date of the transfer. This satisfies the first requirement of section 13.

During B's lifetime, B holds the property as a life tenant—entitled to possession and enjoyment of the property, but without the power to alienate it absolutely. The property remains inalienable during B's life, and the interest is limited to B's lifetime.

(2) Nature of the Interest Created for B's Eldest Son: Absolute or Limited?

The second limb of the transfer directs that after B's death; the property shall pass to B's eldest son. The critical question is whether this creates an absolute interest or merely a life interest in favour of the unborn son.

The language of the transfer—"then to B's eldest son"—does not expressly state that the son is to take only a life interest, nor does it impose any limitation upon his rights. In the absence of words restricting the son's interest (such as "for life" or "without power of alienation"), the natural construction is that the son is to take the whole of the remaining interest of the transferor, which is an absolute interest.

The Explanation to section 13 and the statutory illustration make clear that the interest created for the benefit of an unborn person "shall not take effect, unless it extends to the whole of the remaining interest of the transferor in the property".

In the statutory illustration to section 13:

"A transfers property of which he is the owner to B in trust for A and his intended wife successively for their lives, and, after the death of the survivor, for the eldest son of the intended marriage for life, and after his death for A's second son. The interest so created for the benefit of the eldest son does not take effect, because it does not extend to the whole of A's remaining interest in the property."

The illustration demonstrates that where only a life interest is conferred upon the unborn person (the eldest son), the transfer is void. By contrast, where the transfer is absolute—"to the eldest son" without qualification—the son takes the whole remaining interest.

(3) Construction of "Then to B's Eldest Son"

The phrase "then to B's eldest son" does not contain any words of limitation. It does not say "for life," nor does it reserve any further interest to pass to another person after the son's death. The settled rule of construction is that, in the absence of express limitation, a transfer operates to pass the entire interest remaining in the transferor.

Thus, the transfer vests the absolute estate in B's eldest son, comprising the whole of the remaining interest in the property after the life estate of B comes to an end.

Application of Section 13: Validity of the Transfer

Because the transfer satisfies both conditions mandated by section 13—

1. A prior life interest is created in favour of B, a living person at the date of transfer; and

2. The interest created for the benefit of the unborn person (B's eldest son) extends to the whole of the remaining interest of the transferor (i.e., an absolute interest) —the transfer is valid.

Vesting and Possession

Vesting upon Birth

By virtue of section 20 of the Transfer of Property Act, unless a contrary intention appears from the terms of the transfer, where an interest is created for the benefit of a person not in existence, the interest vests in that person the moment he is born.

Therefore, when B's eldest son is born, the absolute interest in the property vests in him immediately, although he will not be entitled to possession until the life estate of B terminates upon B's death.

If B's eldest son is born during B's lifetime and dies before B, the property does not revert to the transferor. Instead, it devolves upon the heirs of the son, because the interest had already vested in him at birth.

If B dies without ever having a son, the transfer in favour of the unborn son fails for want of a beneficiary, and the property reverts to the transferor (or the transferor's heirs if the transferor is dead).

Corresponding Provision under the Indian Succession Act, 1925

Section 113 of the Indian Succession Act, 1925, contains a provision parallel to section 13 of the Transfer of Property Act. Illustration (i) to section 113 provides:

"A property is bequeathed to A for life and after his death to his eldest son for life and after his death to his eldest son. At the time of testator's death, A has no son. Here the bequest to A's eldest son is a bequest to a person not in existence at the testator's death. It is not a bequest of the whole interest that remains to the testator. The bequest to A's eldest son for life is void."

The illustration confirms that a life interest to an unborn person is void. By implication, an absolute bequest—"to A's eldest son" without the words "for life"—would be valid.

Illustration (iii) to section 113 provides:

"A fund is bequeathed to A for his life and after his death to his daughters. A survives the testator. A has daughters some of whom were not in existence at the testator's death. The bequest to A's daughters is valid because the bequest to A's daughters comprises the whole interest that remains to the testator in the thing bequeathed."

This confirms the validity of a transfer creating a life interest in a living person followed by an absolute interest in favour of unborn persons.

Judicial Authority

In P. Rajamani Rurukul v. Rama (AIR 2010 Mad 197), the Madras High Court held that a transfer in favour of an unborn person is valid provided it is effected through a living person and the unborn person takes an absolute interest.

In Sridhar v. N. Revanna (AIR 2012 Kant 79), property was transferred by way of gift to the donor's grandson, and thereafter the property was to vest in the male children of the grandson absolutely. The gift deed created a life interest in favour of the grandson and an absolute right in favour of the unborn sons. The condition in the gift restraining alienation by the grandson was held valid, and alienation by the grandson after the birth of his sons was held improper. The sons were held entitled to the sale consideration.

In JV Satyanarayana v. Pyboyina Manikyan (AIR 1983 AP 139), a life estate was created in favour of S, and an absolute interest in favour of the unborn sons of S. The court held that the transfer in favour of the sons was valid and unaffected by any subsequent relinquishment by S, as validity was dependent on the terms of the original grant.

Comparison: Invalid Transfer Under Section 13

By way of contrast, consider the following scenario:

"A transfers property to B for life, then to B's eldest son for life, and then to B's eldest son's son absolutely."

Here, the interest created for B's eldest son is only a life interest. Because the eldest son (who is unborn at the date of transfer) does not take the whole of the remaining interest of the transferor, the transfer violates section 13 and is void.

The Privy Council in Girish Dutt v. Datadin (AIR 1934 Oudh 35) held that where a gift was made to B for life, then to B's male descendants absolutely, but if B had no male descendants then to B's daughters without power of alienation, the gift to the unborn daughters was void because it created only a limited interest.

Conclusion: The Transfer is Valid

The transfer "to B for life, then to B's eldest son" is valid under section 13 of the Transfer of Property Act, 1882, because:

1. A prior life interest is created in favour of B, a living person at the date of the transfer.

2. The interest created for the benefit of B's eldest son (an unborn person) extends to the whole of the remaining interest of the transferor—that is, an absolute interest.

The property vests in B's eldest son the moment he is born, but possession is postponed until B's death. If B dies without having had a son, the interest fails and the property reverts to the transferor or the transferor's heirs.