Understanding Section 13 of the Transfer of Property Act

Introduction to Section 13 of the Transfer of Property Act

Section 13 of the Transfer of Property Act discusses the transfer of property to a person who does not exist at the time of transfer. The transfer of property or gift deed to an unborn beneficiary is valid or invalid, as described in Section 13 of the Transfer of Property Act. All these are issues that require legal consultation.

Section 5 of the Transfer of Property Act in India

Even Section 5 of the Transfer of Property Act describes how Property can be transferred between living people.

There is only one case in which the Transfer of Property happens after the death of the person; it is when a will has been created by the deceased for the Transfer of Property to his beneficiaries. However, section 13 of the Transfer of Property Act talks about the issue of transfer to an unborn.

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What does Section 13 of the Transfer of Property Act say?

Section 13 of the Transfer of Property Act says, “Transfer for benefit of an unborn person—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.“

What are the main elements of section 13 of the Transfer of Property Act?

There are three major elements of section 13 of the Transfer of Property Act, which are as follows-

No direct Transfer

• A person who has not been born cannot get a direct transfer of the rights of the property.
• This type of transaction can only happen with the help of trust.
• The main important principle of the Transfer of Property Act is that every property has its owner.
• Properties transfer to a person who has not been born, then the property will have no existing owner.
• Contrary to the principle of Transfer of Property.

Prior Interest

• In situations where there is no trust between the parties,
• Then, the transfer of property to the unborn person should be done by some other person until that unborn person comes into existence.
• Another person will own an unborn person’s interest in the property until he is born.
• This is called prior interest under section 13 of the Transfer of Property Act.

Absolute interest

• As per section 13 of Transfer of Property, the transfer to the unborn should be complete, which means the entire property has to be transferred.
• The Transfer of Property two and one person cannot be transferred to another person.
• The further transfer of the property is invalid.
• The property transfer to an unborn will have an interest in his life period.
• However, there is a rule of double possibilities.
• The first possibility is for the unborn person to whom the property has to be Transferred.
• The second is the existence of that unborn person.

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Illustration of section 13 of the Transfer of Property Act

1. A is a property owner. He gives it to “B” in trust for the duration of his and his intended wife’s lives. The oldest child of the wedding planning for his life will receive it after the survivor’s demise, and the second child of A will receive it after his death.
2. Because it does not cover A’s full residual ownership of the property, the interest thereby constituted for the profit of the eldest child does not become effective.
3. In the facts of the famous case Girish Datta versus Data Din- “The truth of the matter is that A gave her property to her nephew’s girl B as a gift forever, and in this way solely to B’s male posterity, if any. Yet, if B has no male youngsters, her little girl will not have the option to distance her, and if B has no male or female relatives, B will ignore issueless with her nephew.”
4. It was accepted that since B was not yet alive at the time of the exchange, the gift of life to B was genuine. Since it was an endowment of just a restricted interest, the gift for B’s little girl was invalid under Section 13 of the Transfer of Property Act.
5. It was held that section 13 of the Transfer of Property Act makes it void.
6. In one of the famous cases, the Supreme Court had seen that no interest could be made for an unborn individual; however, when the gift is made to a class or series of people, some of whom are present, and some are nonexistent.
7. It doesn’t flop totally; according to section 13 of the Transfer of Property Act, it is substantial for the people who exist at the time of the departed benefactor’s passing and invalid for the rest.

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Conclusion

Section 13 of the Transfer of Property Act talks about the transfer of property to a person who has not taken birth or is not in existence. A matter such as this should be taken under proper legal consultation. Transfer of property or gift deeds are civil matters that are taken in Civil courts in India.

Frequently Asked Questions (FAQs)

Q1. What is Section 13 of the Transfer of Property Act?

Ans1. Section 13 of the Transfer of Property Act deals with property transfers made for the benefit of a person who does not exist at the time of the transfer, such as an unborn child. It lays out the conditions under which such a transfer can be valid.

Q2. Can property be transferred directly to an unborn child under Section 13?

Ans2. No, direct transfer of property to an unborn person is not valid. It must be made through a trust or by creating a prior interest in favor of another person until the unborn comes into existence.

Q3. What are the essential elements of Section 13 of the Transfer of Property Act?

Ans3. The key elements are: (1) no direct transfer to an unborn, (2) prior interest must be created, and (3) absolute interest must be granted once the unborn person comes into existence.

Q4. What does ‘prior interest’ mean under Section 13?

Ans4. ‘Prior interest’ refers to assigning the property to another person to manage or hold it until the unborn beneficiary is born and can claim the property legally.

Q5. What does ‘absolute interest’ imply in Section 13?

Ans5. Absolute interest means that the entire remaining interest in the property must be transferred to the unborn person once they come into existence. Partial transfers are not valid.

Q6. Is a gift deed to an unborn person valid?

Ans6. A gift deed to an unborn person is only valid if it meets the conditions under Section 13, including the creation of a prior interest and a complete transfer upon birth.

Q7. What happens if Section 13 conditions are not fulfilled?

Ans7. If the legal conditions under Section 13 are not satisfied, the transfer is considered void and has no legal standing in court.

Q8. What was the Supreme Court’s view on transfers to unborn persons?

Ans8. The Supreme Court ruled that when a gift is made to a group of people including both existing and unborn members, it remains valid for those who are alive at the time of the donor’s death and invalid for the rest.

Q9. What legal document can facilitate a transfer to an unborn person?

Ans9. A trust deed is the most appropriate legal document to facilitate such transfers under Section 13, ensuring compliance with the law.

Q10. Should legal advice be taken for transfers involving unborn beneficiaries?

Ans10. Yes, legal consultation is highly recommended, as such matters involve nuanced civil law principles and must comply with Section 13 to be valid in court.