Judgment :- 1. This appeal is by defendants 2 and 3. Short facts Plaintiff is the only daughter of one Ramadas. Ramadas is the son of Velu. Velu gifted the suit properties by executing Ext. A1 gift deed. Plainly the gift was intended to benefit the son, Ramadas and his children to be born. Ramadas executed a sale deed Ext. A2 in favour of his sister. She was the first defendant in the suit. Pending the suit, the first defendant died. Her legal representatives are defendants 2 and 3. Plaintiff filed the suit for setting aside Ext. A2 sale deed and recovery of one half of the plaint schedule property. 2. The defendants contend that the sale deed is valid even though it has been executed by Ramadas alone. Their case is that the gift in favour of children to be born to Ramadas has not taken effect since it was inoperative and invalid in view of the prohibitions contained in S.13 of the Transfer of Property Act. 3. The trial court after evaluating the evidence in the case held that the plaintiff is not entitled to the reliefs claimed in the suit. The court construed the gift deed Ext. A1 and came to the conclusion that Ramadas alone in law constituted the beneficiary under Ext. A1 gift and that the gift enured to the benefit of Ramadas only and that the provision, in the gift deed in respect of unborn children of Ramadas is inoperative and invalid. Finding that Ramadas got the entire interest in the property under Ext. Al, the court said that the transfer Ext. A2 by Ramadas in favour of his sister is perfectly valid and legal. In this view, the court held that the challenge against Ext. A2 is devoid of any merit and unsustainable. The obvious result was the dismissal of the suit. 4. Plaintiff filed an appeal before the District Court, Quilon. The learned District Judge found that Ext. A1 is a valid gift to a living person and to unborn persons. Holding that the gift is valid in its entirety, the court further held that the children of Ramadas arc entitled to half share in the suit property.
4. Plaintiff filed an appeal before the District Court, Quilon. The learned District Judge found that Ext. A1 is a valid gift to a living person and to unborn persons. Holding that the gift is valid in its entirety, the court further held that the children of Ramadas arc entitled to half share in the suit property. Since Ramadas had only one child, who is the plaintiff in this case, the appellate court found that the sale deed Ext, A2 in respect of plaintiff's half share in the property is invalid and granted the relief claimed in the suit. The appellate court decreed the suit. Now defendants 2 and 3 appeal to this court. 5. An important and interesting question of law relating to the true scope ambit and the area of application of S.13 and 20 of the Transfer of Property Act arises for consideration in this case. I should like to say at once that the case was extremely well argued by counsel on both sides and I am very much obliged for their help. 6. The learned counsel for the appellants submitted that in view of S.13 of the Transfer of Property Act, the provisions made in the gift deed in favour of unborn persons are invalid and cannot be given effect to. The learned counsel for the respondent submitted that a true construction of the gift deed in the light of S.13 and 20 of the T. P. Act would not militate against the rights of the plaintiff. 7. Before dealing with the content and scope of S.13 and 20 of the T. P. Act, I shall quote the dispositive words in Ext. Al. To my mind, the only clear intention that can be discerned from the above quoted dispositive words in the document is that Velu never intended to gift the property in its entirety to Ramadas. The clear intention of the donor was to gift the property to Ramadas and to the children of Ramadas to be born. If this court in law can give effect to this desire of the donor, it will be only in accordance with justice and equity. S.13 of the T.P. Act reads thus: "Transfer for benefit of unborn person.
The clear intention of the donor was to gift the property to Ramadas and to the children of Ramadas to be born. If this court in law can give effect to this desire of the donor, it will be only in accordance with justice and equity. S.13 of the T.P. Act reads thus: "Transfer for benefit of 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." 8. This section in a large measure is the true application of that principle, what was known in England as the rule against "a possibility on a possibility" or in other words, double possibilities the rule in Whitby v. Mitchell (1890) 44 Ch. D. 85. "The old rule against "a possibility on a possibility", applicable to legal limitations of real estate, namely, that although an estate may be limited to an unborn person for bis life, yet a remainder cannot be limited to the children of that unborn person, as purchasers, is still existing, and has not been abrogated by the more modern rule against perpetuities, which prohibits property being tied up for a longer period than a life or lives in being and twenty-one years afterwards, with the addition of the period of an actually existing gestation the two rules being in fact independent and co-existing." In English Law, the rule against perpetuities has its genesis in the law of shifting uses and executory devises. When shifting uses and executory devises were invented it became necessary to impose some limit upon them, and the doctrine of perpetuities has arisen from that necessity. The rule against double possibilities is a rule founded on very good sense; because it was thought that it was not desirable that land should be tied up to a greater extent than that allowed by the rule. Megarry in the Law of Real Property traces the history of the rule in Whitby v. Mitchell.
The rule against double possibilities is a rule founded on very good sense; because it was thought that it was not desirable that land should be tied up to a greater extent than that allowed by the rule. Megarry in the Law of Real Property traces the history of the rule in Whitby v. Mitchell. He says that although this rule is now known by the name of a case decided in 1890 (Whitby v. Mitchell) in which it was thoroughly discussed, it seems to be considerable but uncertain age. He quotes Re Nash (1910) 1 Ch.1 at 7. The rule according to him appears in Perrot's Case (1594) Moo K. B 368, but was not clearly laid down until Duke of Marlborough v. Earl Godolphin (1759) 1 Eden 404 at 415,416. Megarry has stated the rule in the simplest form: "if an interest in reality is given to an unborn person any remainder to his issue is void together with all subsequent limitations". S.13 T. P. Act also interdicts that a transfer of a lesser interest other than the full remainder and absolute interest in the property in favour of an unborn person. If the transfer to the unborn person is the absolute and full interest of the remainder, the transfer is not hit by S.13 of the T. P. Act. 9. To me the principle is clear enough, however difficult its application in particular cases. What I understand is, that a person disposing of the property to another shall not fetter the free disposition of that property in the hands of more generations than one. The rule is clean and clear and distinct from the rule against perpetuities, though their effects may sometimes overlap. 10. Normally a person not in existence can neither be a transferee nor a beneficiary, until he comes into existence. Therefore, no immediate vesting of property in favour of an unborn person is possible. This is discernible from the provisions of T. P. Act as well as from the provisions of Indian Trusts Act.
10. Normally a person not in existence can neither be a transferee nor a beneficiary, until he comes into existence. Therefore, no immediate vesting of property in favour of an unborn person is possible. This is discernible from the provisions of T. P. Act as well as from the provisions of Indian Trusts Act. S.5 of the T. P. Act defines transfer of property, as follows: " In the following sections "transfer of property" means an act by which a living person conveys property, in presenter in future, to one or more other living persons, or to himself, or to himself or one or more other living persons; and "to transfer property" is to perform such act." The word used in S.5 is "living person" and it is doubtful whether a living person would include a person not in existence. S.9 of the Indian Trusts Act, 1882, provides that every person capable of holding property may be a beneficiary which expression again will exclude a person not in existence. S.9 of the Indian Trusts Act runs thus: Who may be beneficiary. Every person capable of holding property may be a beneficiary." But it has to be noted that where a transfer is made or a trust is created to take immediate effect in favour of a living person and thereafter that interest is to vest for the benefit of a person not in existence at the date of transfer or trust is valid in law. The reason is that the subsequent interest takes effect only when the prior interest ceases and at that time, the unborn person for whose benefit it was created, would have born to receive the benefit. The purpose of S.13 is to effect to this principle. 11. The phraseology employed in the section is intended to make the idea clear that the transfer is not to a person not in existence, but for the benefit of a person not in existence. The learned counsel for the appellants referred me to Sankara Pillai v. Chandran Pillai (1967 KLT.101). In 1967 KLT.101. T. C. Raghavan, J. as he then was, said that S.13 contemplates the creation of a trust. The learned judge finds the reason from the words used in the section, namely, "for the benefit of" a person not in existence.
The learned counsel for the appellants referred me to Sankara Pillai v. Chandran Pillai (1967 KLT.101). In 1967 KLT.101. T. C. Raghavan, J. as he then was, said that S.13 contemplates the creation of a trust. The learned judge finds the reason from the words used in the section, namely, "for the benefit of" a person not in existence. One of the necessary inseparables of the section is the creation of a prior interest which must be in the name of a living person. If this requirement is satisfied, it is possible to create a subsequent interest in the name of an unborn person, of course subject to the prior interest. The further condition is, such subsequent interest should run to the whole of the remaining interest of the transferor in the property. This section rests on that hypostasis that the power of alienation shall not be exercised to its own destruction and that all devices shall be void which tend to create a perpetuity or tend to place the property for even out of reach of the power of alienation. Raghavan, J. considered the effect of S.20, T. P. Act. He said: "S 20 does not deal with the creation of any interest in favour of an unborn person." The learned judge is of the view that the content and purpose of S.20 is to indicate or to fix the time when the property would vest with the unborn person, when it is made the subject matter of a gift or other transfer to an unborn person. The learned judge observed: "The validity or otherwise of a transfer to an unborn person has to be tested under S.13, and the time of vesting alone has to be decided under S.20." His Lordship made it clear that if the transfer is invalid under S.13, it is not possible to make it valid under S.20. In other words, Raghavan, J. is of opinion that S.20 has no independent existence. It is inseparably yoked with S.13 T. P. Act. In this view, the learned judge disagrees with the decision reported in K. Vasanthappa v. K Channabasappa (AIR. 1962 Mysore 98). 12. In AIR. 1962 Mysore 98, Somnath Iyer J. observed: "The interest created in favour of an unborn person such as referred to in S.13 is dissimilar to the interest envisaged by S.20.
In this view, the learned judge disagrees with the decision reported in K. Vasanthappa v. K Channabasappa (AIR. 1962 Mysore 98). 12. In AIR. 1962 Mysore 98, Somnath Iyer J. observed: "The interest created in favour of an unborn person such as referred to in S.13 is dissimilar to the interest envisaged by S.20. S.20 refers to the creation of a limited interest by the transferor in favour of someone in the first instance and the creation of a successive interest in someone else thereafter. In a case like that, what S.13 forbids is the creation of an interest in favour of the second person unless that interest is the entire interest possessed by the transferor after the creation of the interest on the first occasion. S.13, therefore, has application only to cases where the interest created on the first occasion is a limited interest and such transfer is followed up by the creation of another interest." I think there is no real conflict with the ratio of the decision reported in AIR. 1962 Mysore 98, with 1967 KLT.101. The cases presented different sets of facts. 13. S.20 declares that where the interest is validly created for the benefit of a person not then living, he acquires upon his birth, unless a contrary intention appears from the terms of the transfer, a vested interest although he may not be entitled to the enjoyment thereof, immediately on his birth. The interest created for the benefit of an unborn person vests as soon as that person is born. A clear illustration is that if A settles property on himself and his intended wife for their lives, and then on the eldest son of their marriage, the son takes a vested interest as soon as he is born. It has to be remembered that the settlement has been made even before the son is born, nay even before the marriage. 14. Admittedly, by the gift deed Ext. Al, the donor gifted the properties to a living person, viz Ramadas and to unborn persons, viz children of Ramadas to be born. It cannot be said that the intention of the donor in executing the gift deed is to benefit the living person, Ramadas alone. Ramadas cannot hold the property in its entirety absolutely for himself.
Al, the donor gifted the properties to a living person, viz Ramadas and to unborn persons, viz children of Ramadas to be born. It cannot be said that the intention of the donor in executing the gift deed is to benefit the living person, Ramadas alone. Ramadas cannot hold the property in its entirety absolutely for himself. The living person as well as the unborn persons were given absolute interest in the property by the gift deed. What is the quantum of their respective rights is the only question. Together they hold the absolute right in the entirety of the properties. There is no indication in the document of gift that the living person should hold the property only for his life. The result is that the living person takes one part of the property absolutely and the rest he is holding in trust for the unborn persons and as soon as the unborn persons come into existence, the property vests with them. At this point, I should note I he argument of the counsel for the appellants that there is no defini¬teness of the shares to be taken by the living and the unborn and so the gift to unborn persons is rendered ineffective and invalid. The counsel invites my attention to Para.11 of the decision reported in 1967 KLT. 101. It is observed thus: "Applying the principles discussed above to the facts of the present case the position resolves itself to this. It is not the case of the appellants that the living persons, the second defendant and the first plaintiff, did not get any absolute interest in the properties. If they got absolute interest in the properties on the date of the gift, what was the quantum of their right at that moment? It had necessarily to be the absolute right in the entirety of the properties, because there is no indication in the document of gift that they were to hold only a definite share like a half or a third in the absolute interest and regarding the rest they were to hold as trustees for the unborn person. There is also no indication that what the living persons, the second defendant and the first plaintiff, got was only a life interest or a smaller interest than the absolute interest and regarding the absolute remainder they were trustees for the unborn persons.
There is also no indication that what the living persons, the second defendant and the first plaintiff, got was only a life interest or a smaller interest than the absolute interest and regarding the absolute remainder they were trustees for the unborn persons. Therefore, the only conclusion possible from the provisions of the gift deed is that the properties were given in absolute right to two living persons along with other unborn persons. I may, at this stage, remind that the second defendant, the first plaintiff and the unborn persons do not constitute a tavazhi under the Nayar Act, so that the gift could not have been to a tavazhi either. The result is that the gift enured for the benefit of the living persons and it failed regarding the unborn persons. In other words, the entire properties vested in the second defendant and the first plaintiff as tenants-in-common each of them obtaining a moiety thereof." 15. It is possible to construe the gift deed as creating a trust by vesting the property in a living person as a trustee and giving the beneficial interest to the unborn persons when they come into existence. The only limitation in S.13 is that the remainder interest to be given to the unborn person should be the entirety of the interest. In every case property is given validly in law to an unborn person and a living person, the living person is constituted a trustee of the unborn person. A specific share in the property transferred, say a moiety, a one third or a one fourth can be given absolutely to the living person and in regard to the rest of the property he may be constituted a trustee and the unborn persons the beneficial owners when they come into existence. In such cases in regard to the share given to the unborn persons the living person acts only as a trustee and the unborn persons take the beneficial interest as soon as the unborn persons come into existence. In that view, in respect of the share of the property of the unborn persons is concerned, the living person has got only a limited interest, an interest that can be exercised only till the unborn persons come into existence.
In that view, in respect of the share of the property of the unborn persons is concerned, the living person has got only a limited interest, an interest that can be exercised only till the unborn persons come into existence. So there is absolutely no difficulty in giving effect to the terms of such a transfer without least offending the provisions contained in S.13 of the T. P. Act. The counsel submits that to apply this principle, the share to be given to the living person and the unborn person should be definite and that in this case there is no definiteness about the share. True the donor has not stated specifically the shares of the living and the unborn. I quote the observations of Raman Nair, J. in Mathen Mathew v. Kunjika Bharathi (1967 KLT.133). "In this case the gift was to the wife-there were no children then, at least none born-but the deed expressly stated that the gift was for the benefit of the wife and the issue that might be born to her and the donor. Now, if full effect is to be given to this provision-and full effect must, if possible, be given instead of the provision in favour of the issue being ignored as a void provision making a gift to unborn persons-it can only be by construing the gift as a gift to the thavazhce of the wife, or as a transfer to the wife in trust for herself and the children to be born to her and the donor." (emphasis added by me) 16. I should say that the gift Ext. A1 is a gift to Ramadas and for his children to be born in future. There is absolutely no justification for holding the provision in favour of the unborn person as an inoperative and void provision and holding that it will enure to the benefit of Ramadas alone. 'General propositions do not decide concrete cases' and 'the life of the law has not been logic; it has been experience'. Certainly I am bound to follow the precedents of the Supreme Court and the decisions of this court on the subject. I should not speculate upon improvements in those precedents. Lord Eldone has said that it is better that the law should be certain than that every judge should speculate upon improvements in it.
Certainly I am bound to follow the precedents of the Supreme Court and the decisions of this court on the subject. I should not speculate upon improvements in those precedents. Lord Eldone has said that it is better that the law should be certain than that every judge should speculate upon improvements in it. A just solution for the particular case is the crucial factor in the decision process. I try to remember that equitable rule of decision that considerations of justice are directly relevant to the justification of any decision. 17. There is no doubt that there can beat least two situations possible under S.13 of the T.P.Act. One is to transfer the property to a living person in trust as a trustee and giving the beneficial interest to the unborn person. The second possibility which is the common case, is the creation of a limited interest or a smaller prior estate in favour of a living person and the creation of an absolute remainder in favour of the unborn person. In this case also, it is possible to give a particular share in the property absolutely to the living person and in regard to the remaining share in the property a limited interest, and in such a case, the living person will take the share given absolutely to him with full rights and regarding the balance a limited estate like a life estate over the property which should vest absolutely to the unborn person. 18. There is nothing wrong in presuming that when a transfer is made in favour of more persons than one, normally the transferees take as tenants in common in equal shares unless otherwise stated in the document of transfer Can I apply this principle in regard to Ext. A1 transfer. 19. S.45 of the T. P. Act applies only to transfers for consideration and not to gifts or bequests. In the latter class of transfers, the interest of the transferee, it can be argued, cannot be determined by reference to any consideration for the transfers in as much as they are not transfers for value at all. So such cases have to be determined by reference to general principles of equity and law. What is the equity that can be applied. Where the deed of gift or will specifies the shares of the donees, there is of course no difficulty.
So such cases have to be determined by reference to general principles of equity and law. What is the equity that can be applied. Where the deed of gift or will specifies the shares of the donees, there is of course no difficulty. They can take and they will take only the interest so specified in the deed of gift But the difficulty arises when there is no such specification or delineation in the deed of gift Then the matter must rest on the general principles of law and on presumption of law. Almost all the High Courts in India have accepted that a gift to two or more persons will make them tenants in common in regard to such property. I quote the observations of Vithayathil, J. in Geevarghese v. Krishnan (AIR. 1953 TC. 98). "Under the general law of transfer when a transfer is made in favour of more persons than one the transferees take as tenants-in-common in equal shares unless a contrary intention is expressed in the deed of transfer. This is clear from S.45, TP. Act" 20. I consider it necessary to discuss in a little more detail the decision reported in K. Vasanthappa v. K. Channabasappa (AIR. 1962 Mysore 98). The facts of the present case are almost identical with the facts of K. Vasanthappa's Case By a gift deed, the donor purported to transfer his property in favour of A, a then living son of donor's daughter. By another part of the deed he directed that the property which was the subject matter of the gift, was to be enjoyed not only by A but also other sons who might be born to the donor's daughter before A attained majority. B was born before A attained majority. A alienated the entire property by a sale deed. In a suit by B for recovery of his half share of property and meane profits, the court held that the gift deed was a valid disposition, in favour of unborn persons permissible under the provisions of S.20 of the T. P. Act and the plaintiff, the moment he was born, became entitled to the moiety of the property of his grandfather. The court made a straight forward approach and directed itself only to an examination whether all the requirements and ingredients of S.20 of the T. P. Act were present in that case.
The court made a straight forward approach and directed itself only to an examination whether all the requirements and ingredients of S.20 of the T. P. Act were present in that case. The court found: "all the ingredients envisaged by this section are established. There was a transfer of property by the maternal grand-father of plaintiff 1 and that transfer was in favour of defendant 2. That maternal grand-father also created an interest for the benefit of a person who was not then living and that person is plaintiff 1. Upon his birth, plaintiff I did, as provided by S.20 of the Transfer of Property Act. acquire a vested interest, since from Ext. B2 no contrary intention appears." It is also possible to say that S.13 has no relevance and the controversy has to be resolved by applying the provisions of S.20 T. P. Act to the facts of this case. What S.13 provides is that when an interest is created in favour of an unborn person, the creation of such interest must be preceded by a prior interest and that the interest created in favour of the unborn person should be the whole remainder making it impossible to confer a lesser interest on an unborn person. Therefore, the core of the prohibition in S.13 is that S.13 T. P. Act interdicts that no lesser interest be created in favour of the unborn person, it must be the entirety of the remainder interest. A straight forward method is to say that the interests created in favour of the unborn person and the living person in Ext. A1 are absolute interest, interests in its entirety, in respect of their respective shares in the property. In this view, perhaps S.13 as such may not have application to the facts of the case since it applies to cases where the interest created on the first occasion is a limited interest and such transfer is followed up by the creation of another interest to the unborn persons and that such interest should be entire remainder interest. 21. Now the learned counsel for the appellants submits that Ext. A1 is a gift and that a gift requires acceptance under S.122 T. P. Act. Unborn persons cannot accept the gift, so there cannot be any gift in favour of an unborn person. He has cited a decision reported in 1965 KLT. 639 (Kashi Mathai V. Mathai).
21. Now the learned counsel for the appellants submits that Ext. A1 is a gift and that a gift requires acceptance under S.122 T. P. Act. Unborn persons cannot accept the gift, so there cannot be any gift in favour of an unborn person. He has cited a decision reported in 1965 KLT. 639 (Kashi Mathai V. Mathai). Velu Pillai, J. observed thus: "S. 122 provides that a gift to be valid has to be accepted by the donee or on his behalf. Where there are more than one donee, the acceptance must be by all of them or on their behalf. This condition is impossible of compliance in the case of unborn persons. If a donee dies before acceptance, the gift is void." S.13 T.P. Act itself contemplates a transfer of property for the benefit of unborn persons. With due respect, I feel that this decision does not take note of the fact that as far as a transfer to an unborn person is concerned, the transfer is effected by employing the principles of trust. A Full Bench of this court in the decision reported in 1967 KLT. 133 (Mathew v. Kunjika Bharathi) has held that a valid gift can be made to named donees as representing the group of persons composed of the wife and children including children to be born. Such gifts are made by employing the machinery of a trust where the named donees would hold the property as trustees for themselves and the other beneficiaries. The learned judge has relied on an earlier decision reported in 5 T.L.R 116 where it has been held that the named donees take as trustees for the "entire body of the wife and children". 22. In Mulla T. P. Act, at page 786, the learned author says a gift may be made by the equitable machinery of a trust, and the interposition of the trustees enables a gift to be made to a person not yet in existence and therefore incapable of being the donee of a direct gift. It has to be remembered that the rule of pure Hindu Law that a gift in favour of an unborn person is wholly void so that it cannot be made even through the medium of a trust was altered by the Hindu Disposition of Property Act, 1916 (Act XV of 1916).
It has to be remembered that the rule of pure Hindu Law that a gift in favour of an unborn person is wholly void so that it cannot be made even through the medium of a trust was altered by the Hindu Disposition of Property Act, 1916 (Act XV of 1916). S.2 of that Act provides: "Dispositions for the benefit of person not in existence.- Subject to the limitations and provisions specified in this Act, no disposition of property by a Hindu, whether by transfer inter vivos or by will, shall be invalid by reason only that any person for whose benefit it may have been made was not in existence at the date of such disposition." Subject to the limitations, S.3 provides certain limitations and conditions. After the amendment of the Act by Act XX[ of 1929, the limitations and conditions in S.3 read as follows: "3. Limitations and Conditions. The limitations and provisions referred to in S.2 shall be the following, namely: (a) in respect of dispositions by transfer inter vivos, those contained in (Chapter II) of the Transfer of Property Act, 1882 and (b) in respect of dispositions by will, those contained in (Ss.113, 114, 115 and 116.of the Indian Succession Act, 1925)." I wish to quote the statement of objects and reasons of this Act (The Hindu Disposition of Property Act, 1916) "According to the Hindu Law as now administered in British India, a gift in favour of a person not in existence at the date of the gift is void; and so also a bequest in favour of a person not in existence at the time of the testator's death. The same is the rule of Mahomedan Law. Every lawyer familiar with the Indian Courts must have come across a large number of settlements and wills made by Hindus and Muhammadans for the benefit of their children and grand-children The paramount object of the settlor in all these cases has been to provide not only for his children and grand-children then in existence, but also for those to be born hereafter. Instead, however, of giving effect to the settlor's intention, the law as now administered completely defeats it.
Instead, however, of giving effect to the settlor's intention, the law as now administered completely defeats it. It is to remedy these evils, and to give effect to the settlor's or testator's intention, that the present Bill is proposed." The result of the discussions made above is; that I should hold that the gift to the unborn persons under Ext. A1 is a valid gift and by virtue of Ext A1 the plaintiff is entitled to half share in the property scheduled in the plaint. The appellate court has also held so. I confirm the judgment and decree of the appellate court and dismiss the appeal. No order as to costs. Dismissed.