Free alienation of property is necessary for the progress of humanity and the nation. It is also necessary to make the best use of that property in the present moment. It is in the public interest that properties need to be freely alienated as and when required. However, by his natural selfish tendency, a man wants to tie- up (or to make inalienable) property for the use of his coming generations. He does not want the property to be alienated from some outsider. In quest of that, by will, etc., he wants to restrict free flow or alienation of property. The rule against perpetuity restricts such persons from restricting the free transfer of property in perpetuity.

II. Rule against perpetuity:-

1) According to Jerman, “Perpetuity is the disposition which makes property inalienable for an indefinite period.”

2) According to S. 14 of the T.P. Act:-

“No transfer of property can operate to create interest-

(i) which is to take effect after the lifetime of one or more persons living at the date of such transfer, and

(ii) the minority of some person who shall be in existence at the expiration of that period and to whom, if he attains full age, the interest created is to belong[2].

In other words, the property can only be tied up during the life or lives of any existing person or persons, and the minority of the person to whom the interest created is to belong.[3]. The prohibition operates to tie up property beyond the above-mentioned limit.

There are two ways by which perpetuity may be created: first, by taking away from the owner of the property the power of alienation thereof, and second, by the creation of future remote interests. S. 10 prohibits the first kind of perpetuity; it provides that where the property is transferred subject to a condition or limitation absolutely restraining the transferee or any person claiming under him from parting with or disposing of his interest in the property, the condition or limitation is void. The second type of creation of perpetuity is prohibited under the present section, i.e. S. 14. The prohibition in England is technically known as the “rule against perpetuities”.

114 of the Indian Succession Act of 1925 has an analogous provision. It lays down that no bequest is valid whereby the vesting of the thing bequeathed may be delayed beyond the lifetime of one or more persons living at the testator’s death and the minority of some person who shall be in existence at the expiration of that period, and to whom, if he attains full age, the thing bequeathed is to belong.

The illustrations given under S. 114 are also useful under S. 14 of this Act, viz.

(i) A fund is bequeathed to A for his life and after his death to B for his life, and after B’s death to such of the sons of B as shall first attain the age of 25 years. A and B survive the testator. Here, the son of B who shall first attain the age of 25 years may be a son born after the death of the testator; such son may not attain 25 years of age until more than 18 years have elapsed from the death of the longer live of A and B, and the vesting of the fund may thus be delayed beyond the lifetime of A and B and the minority of the sons of B. the bequest after B’s death is void.

(ii) A fund is bequeathed to A for his life, and after his death, to B for his life, and after B’s death to such of B’s sons as shall first attain the age of 25. B dies in the lifetime of the testator, leaving one or more sons. In this case, the sons of B are persons living at the time of the testator’s decease, and the time when either of them will attain 25 necessarily falls within his own life time. The bequest is valid.

(iii) A fund is bequeathed to A for his life, and after his death to B for his life, with a direction that after B’s death, it shall be divided amongst such of B’s children as shall attain the age of 18, but that, if no child of B shall attain that age, the fund shall go to C. here the time for the division of the fund must arrive at the latest at the expiration of 18 years from the death of B, a person living at the testator’s decease. All the bequests are valid.

(iv) A fund is bequeathed to trustees for the benefit of the testator’s daughters, with a direction that, if any of them marry under age, her share of the fund shall be settled so as to devolve after her death upon such of her children as shall attain the age of 18. Any daughter of the testator to whom the direction applies must be in existence at this decease, and any portion of the fund which may eventually be settled as directed must vest not later than 18 years from the death of the daughter whose share it was. All these provisions are valid.

III. Ingredients of S. 14:-

The following ingredients of S. 14, viz.

1) Property:-

The rule against perpetuity operates against both movable and immovable properties.

2) “Which is to take effect”:-

These words show that the rule of perpetuity applies only to the creation of future interests. In other words, the rule of perpetuity applies to interests intended to vest or to come into existence in the future, and the rules prescribe a time limit beyond which such interest shall not vest.

3) “One or more persons living”:-

A transferor can create as many interests as he desires, provided the transferee must be living at the time of the transfer. There, it cannot be transferred if a person is not in existence or has not yet conceived. However, a child in the mother’s womb is considered to be a ‘person living’ provided he is born alive.

4) “Who shall be in existence at the expiration of that period”:-

These words show that when the interest is to be transferred in the future from the person having a life interest to the minor, the minor must be in existence at that time. If he is not in existence.

The age of majority prescribed in India by the Indian Majority Act of 1875 is 18 years in normal circumstances when natural guardians are in existence; however, if for any minor, a guardian for his person and property is appointed by the court, the age of majority is 21 years.

In Anandrao Vinayak v. Administrator General of Bombay[4]

Facts– The testator made a gift of movable property to a son with a gift of shares in the property to the son’s sons when they attain the age of 21.

Held– The Bombay High Court held the gift void as against the rule of perpetuity.

(a) Transfer for the benefit of an unborn person (S. 13):-

The section prescribes that where, on a transfer of property, an interest therein is created for the benefit of a person not in existence at the date of the transfer, subject to a prior interest created by the same transfer, the interest created for the benefit of such person shall not take effect, unless it extends to the whole of the remaining interest of the transferor in the property.

In other words, the minor must be the last holder of all interests and become the absolute owner. He gets all interest in the property as soon as he becomes a major. During the period, even during the minority, property absolutely vests in him, but the guardian manages it.

Illustration

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 created for the eldest son’s benefit does not take effect because it does not extend to the whole of A’s remaining interest in the property.

(b) When interest vests in an unborn person (S. 20):-

Where, on a transfer of property, an interest therein is created for the benefit of a person not living, he acquires a vested interest upon his birth (unless a contrary intention appears from the terms of the transfer). However, he may not be entitled to the enjoyment thereof immediately upon his birth. However, per the rule of perpetuity, such vesting should not differ for more periods than his attaining majority.

IV. Rule of perpetuity in English law:-

English law allows 21 years after the life or lives of the person or persons living at the time of the death of the testator. After 21 years, the transfer becomes void due to the prohibition of the rule against perpetuity.

In Topham, New Law of Property mentioned that “Every attempted disposition of land or goods is void, unless, at the time when instrument creating it takes effect, one can say, that it must take effect (if it takes effect at all) within a life or lives of the persons then in being and 21 years after the termination of such life or lives, with the possible addition of the period of gestation[5].” In other words, one cannot tie up property for large them the lives of persons now living and 21 years after their deaths.

However, in India, the property is valid until the life or lives of existing persons (at the time of the testator’s death) and the majority of a person existing at the time of transfer from the life holder. The prohibition operates if the property is to vest even after becoming major (refer to illustration (i) under S. 114 of the Indian Succession Act).

IV. Some other characteristics of the rule of perpetuity:-

1) Transfer to class some of whom come under S. 13 and 14 (S. 15):-

If, on a transfer of a property, an interest therein is created for the benefit of a class of persons with regard to some of whose interests fail by reason of any of the rules contained in sections 13 and 14. Such interest fails in regard to those persons only and not in regard to the whole class.

2) Transfer to take effect on failure of prior interest also fails (S.16):-

Where, by reason of any of the rules contained in S. 13 and 14, an interest created for the benefit of a person or of a class of persons fails in regard to such person or the whole of such class, any interest created in the same transaction and intended to take effect after or upon failure of such prior interest also fails.

3) Prior disposition not affected by the invalidity of ulterior disposition (S. 30):-

If the ulterior disposition is not valid, its prior disposition is unaffected.

V. Exceptions to the rule of perpetuity:-

1) Transfer in perpetuity for the benefit of the public (S. 18):-

The restrictions in S.14, 16 and 17 shall not apply in the case of a transfer of property for the benefit of the public in the advancement of religion, knowledge, commerce, health, safety or any other object beneficial to mankind.

2) Personal agreements:-

The rule against perpetuity does not apply to personal agreements, i.e., agreements that do not create an interest in the property.

Illustration

The shebaits of a temple agree to appoint the family of C as pujaris from generation to generation to perform the temple’s services and provide for the expenses and remuneration of the office. The agreement is valid and not affected by the rule against perpetuity[6].

3) The rule does not affect provisions for payment of debits of settlers (S. 17 (2)).

4) Gift in wakf by Mohammedan[7].

5) A charge does not amount to a transfer of an interest in land and is, therefore, not affected by the rule against perpetuity[8].

6) The rule does not affect the mortgagor’s right of redemption.

7) The rule does not apply to vested interests.

8) The rule does not affect the right of the Government.

*****

[1] कायमपने, अखंडपने, पिढयानपिढय मिळकत अहस्तांतरीत करू न देण्या विरूध्द नियम [“शाश्वतता के विरुद्ध नियम” व्यक्तियों को स्थायी रूप से संपत्ती के मुक्त हस्तांतरण को प्रतिबंधित करने से रोकता है|]

[2] मिळकत हस्तांतरनांने कोनताही हक्क निर्मान होनार नाही, जर असा हक्क हा-

हस्तांतरनाचे वेळी हयत असना-या एक किंवा अनेक व्यक्तींच्या हयाती नंतर, व
त्यावेळी अज्ञान असना-या व्यक्तीच्या सज्ञान होन्यानंतर सुघ्दा हस्तांतरीत होत नाही.

थोडक्यात, हस्तांतरना वेळी हयात असना-या एक किंवा अनेक व्यक्ती वष्षेवटच्या हस्तांतरनावेळी अज्ञान असना-या व्यकतीच्या सज्ञान होन्या पलीकडे हक्क हस्तांतरन लांवविल्यास त्यास पिढयानपिढया मिळकत अहस्तांतरीत करन्या विरूध्द नियमा’ ची बाधा येते.

[संपत्ति का हस्तांतरण कोई हक्क पैदा नहीं करेगा अगर ऐसा हक्क-

(i) हस्तांतरण की तारीख पे जीवित एक या अधिक व्यक्तियों के जीवनकाल के बाद प्रभावी होनेवाला है, और

(ii) जो हस्तांतरण के वक्त अल्पवयस्क था उसके वयस्क होनेपर भी हस्तांतरित ना होता हो|

[2] (1896) ILR 20 Bom

[3] दूसरे शब्दों में, सम्पत्ती को हमेशा के लिए अहास्तान्तार्नीय नहीं किया जा सकता है|

[4] (1896) ILR 20 Bom

[5] निर्णय घेनेसाठीचा योग्य ती वेळ, [कोई व्यक्ति अब जीवित व्यक्तियों और उनकी मृत्यु के 21 वर्ष बाद के जीवन के लिए संपत्ति को बांध नहीं सकता है]

[6] Nafar Chandra v. Kailash (1921) 25 Cal. W. N. 201

[7] Abul Fata Mahomed v. Rasamaya (1884) 22 Cal 71

[8] Mutllub Hasan v. Mt. Kalwati (1933) 147 I.C. 302