Understanding Section 13 of the Transfer of Property Act

Introduction

Section 13 of the transfer of property act talks about the transfer of property to a person who does not exist at the time of transferring. 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 the issues of legal consultation.

Section 5 of the Transfer of Property Act

Even in Section 5 of the Transfer of Property Act, it has been described that the Transfer of Property can happen between a living person to another living person.

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.

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 existence of trust between the parties.
• Then the Transfer of Property to the unborn person should be with some other person until that unborn person comes into existence.
• The interest of an unborn person in the property will be owned by some other person 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 the interest for 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 go into existence.
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 as yet alive at the hour of the exchange, the gift for 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; it is substantial as for the people who exist at the hour of the departed benefactor’s passing and is invalid for the rest according to section 13 of the Transfer of Property Act.
   

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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 which are taken in Civil courts in India.