Gourav Asati, author of this article is a fourth-year student at Institute of Law, Nirma University, Ahmedabad. His main interests lie in IPR and Criminal law.
"It is illogical to imagine a dead person below the grave controlling properties above his grave"
~Dinshah Fardunji Mulla
Origin & development of rule: - The
rule against perpetuity is a modern concept it originated in England from the
case of Duke of Norfolk, 1682 when Henry Howard intended to bring a
change in executory limitation in order to provide his tittles to the mentally
challenged eldest son thereafter to the second son and other similar attempts
down to the generations.[1] The
House of Lords intervened into matter stating that passing the title could not
exist ad infinitum it’s bad in law to behold a tittle beyond the lives of
people living at the time.[2] In
this case, J. Gray stated that “No interest is good
unless it must vest, if at all, not later than 21 years after some life in
being at the creation of the instrument”.
Later on, the rule was codified in the Perpetuities and Accumulations Act of
1964 to regulate the transfer of property even after the death of a person, it
is also known as ‘control by dead hand’.[3] Jurist
thereon used the principle to various situations and circumstances also
modified as per the need of the hour in the case of Whitby v. Mitchell it was
ruled out that a gift cannot be made to an unborn child in contrast to present. [4]
Now even gestation is recognized to ascribe rights of an unborn person.
Statutory framework:
- Section 14 of the TPA is commonly known as the rule against perpetuity it
stipulates the maximum duration after which the property cannot be transferred
by the owner to any other interested party.[5] It
becomes necessary to understand the real meaning of the perpetuity period to
obtain the idea of the rule against perpetuity which is mentioned below:
i-It initiates from the day
transferor transfers the property.
ii-Transfer of property
during the lifetime of last prior interest holder and conception of the beneficiary.
iii-It includes the gestation
period of an unborn person but the only conception of interest in the property
is permissible.
iv-The person must have
attained the age of majority i.e. 18 years as per Section 3 of the Majority
Act, 1875 in order to obtain absolute rights for the enjoyment of property,
possession, and alienation.
The rule against perpetuity is given under Section 14
of the TPA is subject to the application of other sections of the TPA likewise
transfer of property is to be done by a living person the act of transfer can
be in present or future,[6] if
the property is transferred under absolute condition or limitation so as to
restrict the transferee from disposing of his interest in the property then
such a condition or limitation is void[7].
When the specific interest is vested with the title of the property concerning
any class of persons, where one or more person fails to satisfy the rules
propounded under Section 13 and 14 of the TPA, it would be acknowledged as an individual
failure without interfering with rights of the entire class.[8] The
premise of Section 18 of TPA is considered as a constraint for Section 14 because
it states that restriction in the rule of perpetuity shall not apply in the
matters of public benefit.[9]
Judicial Scrutiny:
- While addressing the concern of minor the Privy Council in the case of Saundara
Rajan v. Natarajan was of the opinion that when the position of a guardian
is not definite for future appointment under Section 14 of the TPA then
eighteen years would be considered as the age of majority.[10] The
minority of a person is counted since the date of birth but in order to become
as transferee, a child in the womb is deliberated as a competent person. The
High Court of Bombay in Anand Rao Vinayak v. Administrator General
of Bombay, 1986[11]
observed that when the will of deceased male Hindu implicates transfer of his
ancestral or self-acquired property as a gift to his son, son’s son and the
following generation is considered as ultra vires to perpetuity probably it
seeks to vest interest in an estate after the death of the original holder. The Privy Council was of a similar opinion in Abdul
Fata Mahomed Ishak v. Rasamaya Dhur Chowdhuri, 1847 while stating that
the gift bestowed to an unborn descendant is forbidden in the Mohammedan law
except for Wakf.[12]
In the case of Ganesh Sonar v. P Narayan dispute
arose with respect the continuation of the lease agreement between the lessee
and lesser regarding possession of a piece land the court was of the view that
lease is a personal covenant which does stipulate the creation of an interest
in land hence the rule of perpetuity would not apply.[13] Referring
to the Specific Relief Act, 1963 an issue came before the Supreme Court in the
case of Ram Baran Prasad v. Ram Mohit Hazra insisting that a contract
is enforceable by and against the transferee of original parties. The Apex
court held that rights of parties to a contract are flexible enough to be
transferred the rule does not apply to contracts where no right is created, the
real motive behind the rule is to curb the uncertain future rights in the property.[14]
An agreement to allow future generations of a pujari as the sole caretaker of
the temple and its premises is valid as per the wordings of Nafar
Chandra v. Kailash the agreement would not be affected by the rule of
perpetuity.[15]
The case of Ram Newaz v. Nankoo is significant to note here the court dealt
with the execution of a sale deed here interested was created in favour of
unborn descendants, the court held that conditions in the contract were
repugnant to law.[16]
Exceptions to the rule:
- As discussed earlier Section 18 of the TPA is considered as an exception to
the rule of perpetuity because the transfer in the benefit of the public has
abstained namely advancement of religion, knowledge, commerce, health, safety
or any other object.[17] The
rule does not apply to agreements formed between individuals for mutual
deliberation it includes renewal of lease agreements of longer duration.[18]
The property introduced as security for mortgage transaction or a charge
created against the impugned title of the property is exempted from this rule
because it does result in the transfer of an interest in favour of a person.[19] The
contract of pre-emption to establish the right of refusal to sell the property
would naturally fall outside the purview the canon of perpetuity[20]. In
general, the rule is not applicable in the event of land purchased by the
entities, gifts or charity in public benefit and vested interested which cannot
be evil for remoteness.[21]
Conclusion:
- The laws concerning the transfer of property are propounded to guarantee
uninterrupted enjoyment of the property during the lifetime of a person but the
edged of law does not allow the association of property ad infinitum. The rule
of perpetuity emerged as a policy of law where interest in the property will
not remain to an indefinite period beyond the period of perpetuity property
could not be maintained. This rule applies to all forms of property as
mentioned above, nevertheless, the rule is not absolute in nature it comes with
certain exceptions. It can be conclusively said that freedom to the estrangement
of property cannot be imputed for self-destruction, in essence, the transferor
shall not be deprived of the power of alienation however at the same time
property cannot be owned forever it must be sacrificed for greater goods.[22]
[1] Duke of Norfolk's Case (1682) 3 Ch Cas 1; 22 ER 931.
[2] Barry, Herbert. "The Duke of Norfolk's Case." Virginia
Law Review 23, no. 5 (1937): 538-68. Accessed October 1, 2020. Doi: 10.2307/1067819,
www.jstor.org/stable/1067819.
[3] KRAMER, BRUCE M. "Modern Applications of the Rule Against Perpetuities
to Oil and Gas Transactions: What the Duke of Norfolk Didn't Tell You."
Natural Resources Journal 37, no. 2 (1997): 281-310. Accessed October 1, 2020. http://www.jstor.org/stable/24885971.
[4] “The Development of Whitby v. Mitchell.” Harvard Law Review, vol.
27, no. 8, 1914, pp. 752–753. JSTOR, www.jstor.org/stable/1326650.
Accessed 1 Oct. 2020.
[5] The Transfer of Property Act, 1882, Section 14.
[6] The Transfer of Property Act, 1882, Section 5.
[7] The Transfer of Property Act, 1882, Section 10.
[8] The Transfer of Property Act, 1882, Section 15.
[9] The Transfer of Property Act, 1882, Section 18.
[10] Saundara Rajan v. Natarajan, AIR 1925 PC 244.
[11] Anand Rao Vinayak v. Administrator General of Bombay (1896) ILR 20 BOM
450.
[12] Abul Fata Mahomed Ishak and Ors. vs Rasamaya Dhur Chowdhuri And
Ors., 1891, ILR 18 Cal 399.
[13] Ganesh Sonar v P Narayan, AIR 962 Pat 201.
[14] Ram Baran Prasad v. Ram Mohit Hazra, (1967) 1 SCR 2931.
[15] Nafar Chandra v. Kailash, (1921) 25 CWN 201.
[16] Ram Newaz v. Nankoo, AIR 1926 All 283.
[17] The Transfer of Property Act, 1882, Section 18.
[18] Rambaran Prosad vs Ram Mohit Hazra & Ors, AIR 744, 1967 SCR (1)
293.
[19] Rule against perpetuity and its exceptions: A sine qua non of
Property transfer, http://www.legalservicesindia.com/law/article/1030/8/Rule-against-perpetuity-and-its-exceptions-A-sine-qua-non-of-Property.
[20] Ram Baran Prasad v. Ram Mohit Hazra AIR 1967 SC 744.
[21] Rule against perpetuity and its exceptions: A sine qua non of
Property transfer, http://www.legalservicesindia.com/law/article/1030/8/Rule-against-perpetuity-and-its-exceptions-A-sine-qua-non-of-Property.
[22] Kempraj V M/S Burton Son
7& Co, (1970) 2 SCR 140.
0 Comments