Introduction
Section 13 of the Transfer of Property Act, 1882 (hereinafter referred to as "TPA") deals with the situation the transfer of property is made in the favour of a person who is not even existing at the time of such transfer. One might think that, how a property can be transferred to an unborn person because section 5 of the TPA provides, that a valid transfer of property is made between the two living persons. A transfer cannot be made directly to an unborn person, for the definition of transfer in section 5 is limited to living persons. Section 13 of TPA is an exception to section 5 of the TPA. In such cases, the transfer of property can only be made through a trust. A trust may be created in favour of an unborn person if it satisfies the condition laid down in section 13.
Essentials of Section 13 of TPA
If the person wants to transfer the property to the unborn person, then certain rights are created in favour of the unborn person. There are two conditions mentioned in section 13 of TPA for a valid transfer of property in favour of an unborn person;
1) Creation of a Prior life interest in a Person
For the valid transfer of an interest in favour of an unborn person, a prior life interest must be created in favour of a living person then only the further transfer can take place. Here the person holding the life interest in the property acts as a trustee of the property for the benefit of the unborn person. Such a person can enjoy the property for his life but has no right to dispose of the property. The unborn person has a vested interest in the property and the person holding on his behalf has only life interest. For example, if 'A' wishes to transfer his property to suppose 'C', who is not born yet then he cannot transfer it directly because of section 5, therefore he will do it through a third person, suppose 'B' and he will create a life interest in favour of 'B' and once the unborn person takes birth, it will transfer to the unborn child.
2) Transfer of the Absolute interest in favour of Unborn person
Another condition which is specified in section 13 of TPA is that there must be an absolute transfer of property in favour of an unborn person. Section 13 clearly provides that the interest created for the benefit of unborn person take effect only when it extends to whole of the remaining interest of the transferor in the property.
3) The unborn person must come into existence prior to the end of life interest
Let's suppose that before an unborn person takes birth, the transferee in whose favour a life interest is created, died. The question arises is such situation with regards to the rights of an unborn person created through that living person who is dead now. In such cases, because link connecting the transfer of that property is broken, therefore the transfer of property will also not transfer to such unborn person. In such case if the transferor is alive, the property will go to him, and if he is dead, then to the legal heirs of the transferor in accordance with the rule of intestate succession. For example, suppose 'X', is the transferor and 'Y' is a living person in which life interest is created. Here, 'Z' is the unborn person in whose favour the interest in created. Now if 'Y' and 'Z' are alive (Z took birth), then in such the property will transfer to 'Z', but if 'Y' dies prior to 'Z', then the interest created is defeated and the property will go to the legal heirs of 'X'.
Vested Interest in the Unborn Person
When an interest in created for the benefit of unborn person, then the interest which is created in the favour of the unborn person is a vested interest and when he takes birth acquires the interest therein. Section 20 of the TPA deals with the situation when the unborn person gets a vested interest in the property. It provides certain conditions also which can be made in the deed, for example, a condition can be created that the unborn person will get the interest once attain the age of majority. if such conditions are created in the deed, then such conditions are valid. The immediate enjoyment of the property may be postponed subject to the prior interest created in the deed. Now a question arises with respect to the example above, what if a person died before attaining the age of majority, in such a case also, the property will go back to the transferor or his legal heirs.
Conclusion
Section 13 of the Transfer of Property Act, 1882, plays an important role in property law by allowing the transfer of property to future generations. It permits the transfer of property to an unborn person, as long as the interest granted is absolute and comes after a life interest held by a living person. This section ensures that future interests are protected and prevents the creation of overly complex or indefinite property rights.