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PROJECT REPORT ON:

Vested
and
contingent interests

Submitted to: Submitted By:


Mrs. Rajinder Kaur Darpan Singla
B.A.LLB(Hons.)
Section A
Semester VII
Roll No.: 60/14

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ACKNOWLEDGEMENT

It gives me immense pleasure in acknowledging the valuable assistance intended to me by


various people in the successful completion of this project. The formal acknowledgement will
hardly be sufficient in expressing my heartfelt gratitude to my Property Law teacher, Mrs.
Rajinder Kaur, without whose support and guidance this project would not have been
accomplished. Also, I want to thank her for providing such a resourceful and enlightening topic
for research work.

I would also like to extend a big thanks to the authorities of UILS and its Director, Mr. Rattan
Singh for providing all facilities like a well equipped library and all other necessary resources
which proved to be very helpful in the preparation of this project.

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Table Of Contents

TABLE OF CASES ............................................................................................................................. 4


Introduction ..................................................................................................................................... 5
Bare Provision ............................................................................................................................. 5
Vested Interests: Meaning ........................................................................................................... 5
Illustrations .................................................................................................................................. 6
Explanation. .................................................................................................................................... 6
1. Postponement Of Enjoyment. .............................................................................................. 7
2. Prior Interest......................................................................................................................... 7
3. Direction For Accumulation Of Income. ............................................................................. 8
4. Conditional Limitation. ........................................................................................................ 8
Nature Of Vested Interest ............................................................................................................... 8
1. Present Fixed Right .............................................................................................................. 8
2. Transferable And Heritable Interest ..................................................................................... 9
3. Time Of Vesting Of Interest .............................................................................................. 10
Illustrations Of Vested Interest ..................................................................................................... 11
Section 20...................................................................................................................................... 11
Contingent Interests ...................................................................................................................... 12
Bare Provision ........................................................................................................................... 12
Contingent Interest: Meaning .................................................................................................... 12
Nature Of Contingent Interest ....................................................................................................... 14
1. Future Possible Interest. ..................................................................................................... 14
2. Not Heritable. ..................................................................................................................... 14
3. Transferable Interest .......................................................................................................... 15
Distinction Between Vested And Contingent Interest .................................................................. 15
Illustrations Of Contingent Interest .............................................................................................. 16
Section 22...................................................................................................................................... 17
Section 23...................................................................................................................................... 18
Section 24...................................................................................................................................... 19
Bibliography ................................................................................................................................. 20

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TABLE OF CASES

Adimoola v. Pavadai Padayachi ................................................................................................... 11


Chinna Reddy v. Pujari Keshanna ................................................................................................ 13
Kokilambal v. N Raman Kokilambal.............................................................................................. 8
Lachman v. Baldeo ......................................................................................................................... 7
Lal Bahadur Singh v. Rajendra Narain Singh ................................................................................. 9
Official Assignee Madras v. Vedavalli Thayaramma1 ................................................................. 19
Rajesh Kanta Roy v. Smt. Shanti Devi ............................................................................... 9, 10, 15
Rukhamanbai v. Shivram .............................................................................................................. 17
Sewadayal v. Official Trustee of Bengal ...................................................................................... 11
Sewdayal v. Official Trustee........................................................................................................... 7
Shashi Kantha v. Promode Chandra ............................................................................................. 14
Sopher v. Administrator-Gn. of Bengal ........................................................................................ 18

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INTRODUCTION

Bare Provision
According to Section 19 of the Transfer of Property Act, where, on a transfer of property, an
interest therein is created in favour of a person without specifying the time when it is to take
effect, or in terms specifying that it is to take effect forthwith or on the happening of an event
which must happen, such interest is vested, unless a contrary intention appears from .the terms of
the transfer is called vested interest.

A vested interest is not defeated by the death of the transferee before he obtains possession.

Explanation- An intention that an interest shall not be vested is not to be inferred merely from a
provision whereby the enjoyment thereof is postponed, or whereby a prior interest in the same
property is given or reserved to some other person, or whereby income arising from the property
is directed to be accumulated until the time of enjoyment arrives, or from a provision that if a
particular event shall happen the interest shall pass to another person.

Vested Interests: Meaning


In a transfer of property, there is transfer of interests. From the point of view of the quantum
(quantity) the interest may be either absolute or partial. From the point of view of the time of
accruing (i.e. when transferee gets the interest) the interest may either be vested or contingent. In
a transfer of property, when the interest transferred is vested, the transferee gets that interest
immediately. In other words, as soon as the transfer is complete, the interest accrues to the
transferee with immediate effect and the transferees title is complete. Where the interest is
contingent, the transferee gets the interest only upon the happening of an uncertain future event
specified in the transfer. In a transfer of property if the interest transferred is contingent the title
of the transferee is not complete unless the specified event happens. Section 19 defines vested
interest and Section 21 defines contingent interest.

In a transfer of property the interest created in favour of the transferee is vested where-

no time has been specified as to when it shall take effect, or


it is specified that it shall take effect immediately, or
it is to take effect upon the happening of an event which must happen.

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Normally, when a property is transferred the transferor simply effects it according to procedure
prescribed for the same. He may not mention the date as to when the interest shall pass on to
transferee. In such cases, the intention of the transferor is that the transferee shall get the interest
forthwith. Such intention is presumed by law if the transferor does not specify as to when the
interest shall accrue to transferee. On the other hand, in order to be more specific, the transferor
may express his intention that interest shall accrue to transferee with immediate effect. In both
the cases the interest transferred is a vested interest. Where the transferor provides that the
transfer shall take effect upon the happening of an event of 'must' nature which is bound to occur
in future, the interest of the transferee is a vested interest. For example, any future date or year,
particular age of the transferee or, death of any person are future events of 'must' nature. Where
transfer of property is to take effect upon the death of a person, the interest accrues to the
transferee immediately. It may be noted that death is as certain as birth, therefore, where it is
provided that the property is transferred upon the death of a person the interest of the
transferee is vested because although death is a future event but it is certain. There is no certainty
as to when a person dies or whether or not a person survives upto a particular age or year but, his
death, as such, is certain. Similarly, any future date or future year is also an event of 'must' nature
because they are bound to occur. Thus, in 1993, if a person makes a gift for his property to take
effect in 1995, the donee gets a vested interest because after 1993 the year 1995 is bound to
come.

Illustrations
A makes a gift of his house to B. He simply executes the gift deed but does not specify
any date on which the ownership is to be transferred. The interest of B is a vested
interest.
A makes a gift of Rs. 10,000 to B on the death of C. B has a vested interest in Rs. 10,000
even before C dies. But the money shall be paid to B only upon C's death. If B dies
before the death of C the money shall be paid to B's legal heirs.

EXPLANATION.
Explanation to Section 19 makes it clear that vested interest is not affected by the fact that right
of enjoyment has been postponed. The vested interest remains unaffected also when the title is to
pass on to another person on the happening of a particular event in future. The explanation

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provides that in the following situations, although it may appear that the transferee has no vested
interest but nevertheless the interest is vested :

1. Postponement of enjoyment.

Postponement of the enjoyment of property does not mean that the interest of the transferee is
not vested. In a transfer of property, the primary thing is the transfer of interest of title.
Possession of the property is secondary. Therefore, from the fact that right of enjoyment has
been postponed, it cannot be inferred that vested interest has not been given. Possession or
enjoyment of property, being secondary, it may be postponed for some time. Where A transfers
his properties to B to be given to B on B's attaining the age of majority, the interest of B is vested
although he shall get the possession and enjoyment of property only on attaining the age of
majority. As soon as he attains the age of majority, he shall get the possession and enjoyment.
However, if B dies before attaining the age of majority, the possession and enjoyment of the
property shall go to B's representatives or legal heirs together with title which B already had and
died having it. The postponement of enjoyment of property, therefore, does not prevent the
vesting of interest in favour of the transferee. On the contrary, a condition which postpones the
enjoyment (beyond the age of majority) is itself void after the transferee has attained majority.1
The enjoyment of the property may be postponed till any future date or a future event which is of
'must nature and is bound to happen. In Lachman v. Baldeo2, A made a gift of his property to B
and directed that B was to take possession of a portion of the property only after the death of A
and A's wife. It was held by the Court that the interest of B was a vested interest.

2. Prior interest.

Where a prior interest is created in the same transfer, there is postponement of the enjoyment of
property. The vesting of interest is not postponed. Where A transfers property to B for life and
then to C the interest of C is a vested interest. It may be noted that here, C has a vested interest
immediately when the transfer was made but this right of enjoyment is postponed till the life of
B, B's death is a future event of 'must' nature. Accordingly, although a prior life interest
intervenes yet, C gets immediate vested interest.

1
Sewdayal v. Official Trustee, AIR 1931 Cal 651.
2
48 I.C. 396.

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3. Direction for accumulation of income.

Direction for accumulation of income is valid provided it is within the period prescribed in
Section 17 of this Act. Where a property is transferred with such direction, the interest of the
transferee is nevertheless vested. In such cases too it is only the right of enjoyment which is
posponed, vesting is not postponed. However, when in a transfer of property, if the direction is
that if the right of enjoyment is to terminate only on the death of the transferor, the transfer does
not create a vested interest. In Kokilambal v. N Raman Kokilambal3, there was a deed of family
settlement in which the settlor created a limited interest (right to receive the income from rents).
The Property of the settlor was to vest in the settlee (brothers of the settlor) only on death of
settlor. The Supreme Court held that the family settlement does not create a vested interest in
favour of the settlee (i.e. brothers of the settlor) and settlee cannot be absolute owner during the
life of settlor. Therefore, the settlee (the brothers of settlor) cannot succeed the property on the
settlor's death.

4. Conditional limitation.

A condition that upon the happening of a particular event the interest vested in a person shall
pass on to another person is called a conditional limitation under English law. In India, this
provision is contained in Section 28 of the Transfer of Property Act. In transfer of property, a
conditional limitation does not prevent the vesting of the interest. Rather, it is implied that the
interest which had already been vested may be divested and may vest somewhere else. For
example, A transfers his house to B with a condition that if B does not take possession of this
house within six months from the date of the transfer, the house shall belong to C. The interest of
B is a vested interest although it is likely to be divested in case B does not fulfil
the condition within six months.

NATURE OF VESTED INTEREST


1. Present fixed right

Vested interest is a present fixed right to property. In a transfer of property where a vested
interest is created in favour of the transferee, he gets a present fixed right to property. On the

3
AIR 2005 SC 2468.

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other hand, where the interest created is contingent the transferee gets merely a future possible
right in property. Contingent interest may or may not become vested in future depending upon
the happening or not happening of future event. But where the interest is vested, it accrues to the
transferee immediately. In a vested interest the title of the transferee is complete as soon as the
transfer is completed.

An interest may be 'vested in possession' or 'vested not in possession'. Where the interest is
'vested not in possession, there is a present indefeasible right to future possession in which case
the transferee gets the possession or enjoyment not immediately but in future. Thus, a vested
interest confers a present right to property even though the right of enjoyment is postponed or
suspended.

2. Transferable and heritable interest

Vested interest is transferable and heritable. Being a present fixed right and also since the title of
the transferee is complete, a vested interest is divisible and transferable interest. A vested interest
is such a present fixed right of the transferee that it is regarded as his property. It is transferable
interest within the meaning of Section 6 of this Act even though the transferee has no possession
of right of enjoyment. Further, a vested interest can also be attached and brought to sale in
execution of a decree.4 A vested interest is a heritable interest. Where a person (transferee) dies
having vested interest in a property his interest vests in his legal heirs whether or not he has
obtained possession.

It is significant to note that heritability of the interest is a test ascertaining whether the interest is
contingent or vested. In a transfer of property if it is found that the interest of the transferee is
heritable, the interest is undoubtedly vested. But, where it is found that interest is not heritable,
the interest is a contingent interest. In Rajesh Kanta Roy v. Smt. Shanti Devi5, Ramani Kanta
Roy executed a trust-deed. The deed provided that the trust existed for the payment of debts
incurred by settlor (Ramani Kanta Roy). After termination of the trust, the property was to
belong absolutely to settlor's two sons. The trust was to terminate (1) upon the death of the
settlor and (2) full payment of all the debts. The deed further provided that if either of the sons

4
Lal Bahadur Singh v. Rajendra Narain Singh, (1934) Oudh 454.
5
AIR 1957 SC 255.

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died before the payment of all the debts, the heirs of the sons were entitled to get the shares of
the sons. The settlor died before total discharge of debts. Question before the Court was :
whether the interest of the two sons was vested or contingent? The Supreme Court held that
under the trust deed the interest conferred upon the two sons was a vested interest. The Supreme
Court observed that the scheme of the trust-deed was that the enjoyment was to be restricted until
the debts are discharged. What was postponed was not the vesting of property but the income
thereof burdened with certain monthly payments and with the obligation to discharge debts
therefrom. The Supreme Court further observed that since it was provided in the deed that if
either of the two sons died before full payment of debts, his heirs were entitled to get their shares
the interest of the sons was a heritable interest. And, since the interest conferred upon the two
sons was made heritable, their interest was vested.

3. Time of vesting of interest

On a transfer of property, ordinarily the interest created in favour of the transferee vests
immediately. Section 19 provides that the interest created is vested when no time of its vesting is
specified or it is to vest immediately or where though enjoyment is postponed but it is intended
to vest with immediate effect. However, the transferor may specify particular time of vesting of
the interest. Where the transferor specifies any particular time of vesting this would constitute his
contrary intention as contemplated under Section 19 by the words "unless a contrary intention
appears". The intention of the transferor is to be gathered from the words used by him in the
deed. In construing whether certain words mean to convey vested interest or contingent interest,
the words used must be interpreted in their plain ordinary meaning. According to the Supreme
Court, "the question is really one of intention to be gathered from a comprehensive view of all
the terms of a document and also that a Court has to approach the task of construction, in such
cases, with a bias in favour of a vested interest unless the contrary is definite and clear."6

However, where words used are "to be paid" or "payable" or "to be given" to the transferee at a
certain age, the interest is vested and only enjoyment is postponed. But, where the words used
are "when" or "if" or "provided" the transferee attains a certain age, the interest is contingent
interest.

6
Rajesh Kanta Roy v. Smt. Shanti Devi, AIR 1957 SC 255.

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Illustrations of Vested Interest
A transfers his property to B and C in equal shares to be paid (or to be given) to them on
their attaining the age of 18 years and if B and C die under the age of 18 years, the
property shall go to D. B and C have vested interest even though their interests are likely
to be divested upon the happening of an uncertain future event.
In a trust deed, the settlor directed that after the death of the tenant for life and after
making provision out of the trust fund for the payment of a monthly allowance to the
widow for life, the trustee was to hold the rest of the trust-property for the use and benefit
of his sons 'to be made over to them' on their attaining the age of 21 years. It was held
that the language of the trust-deed suggested that vested interest was conferred to the
sons.7
A makes a bequest of whole of his properties to B upon trust to pay certain debts out of
the income and then to make over the fund to C. At the death of A the gift to C becomes
his vested interest. Here, the provision for the payment of debts simply postpones the
enjoyment such a device confers immediate vested interest, the payment of debts
constituting only a charge.
A husband made settlement on his wife for her life and thereafter the sons born to them
were to take the property absolutely. The sons acquired vested remainder (interest).8

SECTION 20
According to Section 20 of the Transfer of Property Act, when unborn person acquires
vested interest, on transfer for his benefit-Where, on a transfer of property, an interest therein
is created for the benefit of a person 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.

Section 13 and 14 deal with transfer for the benefit of an unborn person. This section provides
that the interest created in favour of an unborn person becomes vested as soon as that person is
born alive. Even where the unborn person is not given possession immediately on his birth, the
interest is vested.

7
Sewadayal v. Official Trustee of Bengal, (1931) Cal. 651.
8
Adimoola v. Pavadai Padayachi, (1958) 2 Mad. L.J. 57.

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For example, if A makes a settlement on himself and his intended wife for their joint lives and
thereafter on the eldest son of their marriage, the son gets vested interest immediately upon his
birth. The fact that he is not entitled to possession till his parents are alive, shall not affect the
vesting of interest. It may be noted that this section contemplates the normal situation that a
person while he is in mother's womb (and is capable of holding property under Section 5) is born
alive. The interest created in favour of an unborn is always contingent subject to his being born
alive. Where a person dies in mother's womb and is not born alive this section does not apply.

However, the rule that the interest created in favour of an unborn person vests immediately on
his birth, is applicable in the normal situations where no particular time of vesting has been
specified by the transferor. Where the transferor expresses a contrary intention, for example,
where the interest is made contingent interest, the transferor's intention shall prevail against this
rule. Thus, where A transfers property to B for life and then to B's such son from her (B s)
intended marriage who first attains the age of 18 years, the interest of the son is contingent.

CONTINGENT INTERESTS

Bare Provision
According to Section 21, where, on a transfer of property, an interest therein is created in favour
of person to take effect only on the happening of a specified uncertain event, or if a specified
uncertain event shall not happen, such person, thereby acquires a contingent interest in the
property. Such interest becomes a vested interest, in the former case, on the happening of
the event, in the latter, when the happening of the event becomes impossible.

Exception.-Where, under a transfer of property, a person becomes entitled to an interest therein


upon attaining a particular age, and the transferor also gives to him absolutely the income to arise
from such interest before he reaches that age, or directs the income or so much thereof as may be
necessary to be applied for his benefit, such interest is not contingent.

Contingent Interest: Meaning


Contingency means uncertain future event. In a transfer of property where the vesting of interest
depends on any contingency i.e. uncertain future event, the interest is contingent. In a transfer of
property where the vesting of estate is dependent upon an event that may or may not happen the

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interest is contigent. 9 A contingent interest is an interest which is created to take effect only
when

some specified uncertain future event happens or


specified uncertain event does not happen.

Where the creation of interest is made dependent on the happening or not happening of any
uncertain future event, it does not vest in the transferee immediately. It vests only upon the
happening or not happening, as the case may be, of that event. For example, where A makes a
gift to B provided X survives (i.e. lives upto) the age of 20 years, the interest of B is contingent.
Similarly, where A makes a gift to B provided X does not survive (i.e dies before) the age of 20
years, here too the interest of B is contingent. In both the examples, the vesting of interest in
favour of B depends on an event which is uncertain. In the first, the vesting would take effect on
the happening (i.e. survival) of that event whereas in the second, it depends on 'not happening' of
that event. The happening or not happening of an uncertain future event is the condition
precedent for vesting. Until the condition precedent is fulfilled, the transfer does not take place
and the interest of the transferee remains a contingent interest. In other words, contingent interest
becomes vested only upon the fulfilment of the condition precedent i.e. upon the happening
of the contingency.

Contingency or specified uncertain event may be of two kinds. First, where the happening or not
happening of the event depends upon the will and desire of the parties e.g. marriage, payment of
a sum of money or execution of a deed etc. For example, A makes a gift to B provided C
marries within one year of the transfer. The interest of B until C marries is a contingent interest.

Secondly, where specified event does not depend on the will or desire of the parties e.g., death of
a person on or before a certain age. Thus, where A makes a transfer of his property to B provided
C dies at the age of 40 years, the interest of B is contingent. It may be noted that death of a
person is a certain event therefore where property is transferred with a condition precedent of the
death of any person, the interest of the transferee is vested. But when and at what age does a
person die, is an uncertain future event. Therefore, where a transfer is made with words: when,

9
Chinna Reddy v. Pujari Keshanna, A.I.R. (1954) Hyd. 185.

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provided or, if a person dies at a given age, or in a specified year or, dies before or after the death
of another person, the interest of the transferee is contingent.

Exception.- Exception to Section 21 provides that where a transferee is to get the interest at a
particular age but is entitled to get absolutely the income of that interest before attaining at age,
the interest given to him is a vested interest. Where an interest is created in favour of a person on
attaining a particular age, his interest is contingent. But if the transferor gives to t e transferee
also an absolute right in the income arising out of that interest (property) or directs that so much
of such income as is necessary for his benefit be applied with immediate effect, the interest of the
transferee is a vested interest.

NATURE OF CONTINGENT INTEREST


1. Future possible interest.

Contingent interest is a future possible interest. In a transfer of property where the transferee's
interest is contingent, he has only a future possible right in respect of property transferred to him.
It is neither a present right nor a certain right. Since the happening or not happening of the event,
is uncertain, the interest dependent on it is also uncertain. In a contingent interest, the right of
enjoyment is also dependent on some event or condition which may or may not happen or be
performed.10

2. Not heritable.

A contingent interest is not a heritable interest.Where a person having contingent interest dies
(i.e. dies before vesting) his legal heirs do not get anything, not even the contingent interest.
After the death of person his legal heirs are entitled to inherit only those properties in which he
had a vested interest at the time of his death. In Rajesh Kanta Roy v. Smt. Shanti Devi11 the
Supreme Court observed thus :

"In the case a contingent interest, one of the features is that if a person dies before the
contingency disappears and before the vesting occurs, the heirs of such person do not get the
benefit of the gift (transfer)."

10
Shashi Kantha v. Promode Chandra, (1932) Cal. 600.
11
AIR 1957 SCC 255.

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3. Transferable interest

Contingent interest is a transferable interest. However, since a contingent interest is itself


an uncertain interest in the property and transferor's own title is not perfect, the transferee too
gets an imperfect title. If the contingent interest subsequently becomes vested, the transferee's
interest also becomes vested. But, if the contingency could not happen the transferee does not get
any title in the property. In other words, although a contingent interest is transferable but the
transferee's title is subject to the same contingency as it was before the transfer was made.

DISTINCTION BETWEEN VESTED AND CONTINGENT INTEREST


Vested interest Contingent interest.
Definition
Section 19 defines Vested interest Section 21 defines Contingent interest
Where, on a transfer of property, an interest Where, on a transfer of property, an interest
therein is created in favour of a person without therein is created in favour of a person to take
specifying the time when it is to take effect, or effect only on the happening of a specified
in terms specifying that it is to take effect uncertain event, or if a specified uncertain
forthwith or on the happening of an event event shall not happen, such person thereby
which must happen, such interest is vested, acquires a contingent interest in the property.
unless a contrary intention appears from the Such interest becomes a vested interest, in the
terms of the transfer. former case, on the happening of the event, in
the latter, when the happening of the event
becomes impossible.

Fulfillment of conditions
Vested interest does not depend upon Contingent interest is solely depend upon the
fulfillment of any condition. It creates an fulfillment of any condition. If the condition is
immediate right though the enjoyment is not fulfilled the interest fails
postponed to a future date.

Effects of transferee's death


Vested interest is not defeated by the death of Contingent interest is defeated by the death of
transferee before he obtains possession. transferee before he obtains possession.

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Whether transferable and heritable ?
It is both Transferable and heritable. If the It is Transferable but whether it is heritable ,
transferee of the vested interest dies before depends upon nature of condition.
actual possession or enjoyment it passes to his It passes not on heir on the death of the
heirs. transferee received to transfer.

Present right of enjoyment.


There is present, immediate right even when its There is no present right of enjoyment, there is
enjoyment is postponed. mere a promise for giving such a right.

Illustrations of Contingent Interest


A makes a gift of his property to B when he attains the age of 18 years or, marries under
that age with the consent of C with a condition that if B neither attains that age nor
marries with the consent of C the property shall go to D. B and D both take a contingent
interest in the property.
A transfers his farm of Sultanpur Khurd to B if B shall convey his own farm of Sultanpur
Buzurg to C . Interest of B in the farm Sultanpur Khurd is contingent. It may become
vested if B conveys his farm Sultanpur Buzurg to C.
A bequeaths to B Rs. 500 when 8 shall attain the age of 18 years and directs that a certain
sum, out of another fund shall be applied for his maintenance until B arrives at that age.
The legacy in favour of B is contingent. But, in this illustration if A directs that the
interest of Rs. 500 or a component part thereof shall be applied for B's benefit until he
reaches that age, the legacy in favour of B would be vested under the exception to
Section 21.
A deed of settlement gave life-estate to X with remainder to his children not in existence
at the time of the settlement. The interest of the children before the death of the holder of
life-estate is contingent. The interest of the children would become vested after the death
of the holder of life estate.12

12
Rukhamanbai v. Shivram, AIR 1981 SC 1881.

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SECTION 22
According to Section 22, transfer to members of a class who attain a particular age.-Where,
on a transfer of property, an interest therein is created in favour of such members only of a class
as shall attain a particular age, such interest does not vest in any member of the class who has not
attained that age.

Contingent class.

This section deals with transfer to a contingent class. Where the transferee constitutes a class but
who are to be included in this class is not certain, the transferee is a contingent class. For
example, where a transfer is made to such of the children of A who shall attain the age of 18
years, the transfer is in favour of a known class of persons i.e. the children of A. But, it is not
certain as to who among the children of A shall survive to attain the age of 18 years. Therefore,
the transfer is in favour of an uncertain or contingent class.

Section 22 provides that where an interest is created in favour of only such members of a class
who shall attain a given age, such interest does not vest in any member of the class who does not
attain that age. In the above example, no child of A who has not attained 18 years may get any
interest because until he attains the prescribed age (here 18 years) he is uncertain transferee.

However, where the class of transferee is certain and known but vesting of interest in favour of
this class is uncertain, this section is not applicable. Thus, where a gift is made to the children of
A provided an uncertain event happens, the transfer is to a certain class of transferee but vesting
of interest is uncertain or contingent. Section 22 does not apply to such situations.

Exception to Section 21 not applicable.

The exception to Section 21 is applicable only in cases where a property is given to a person on
attaining a particular age; it has no relation to any other contingency e.g. on his surviving a
specified person etc. Where a person made a will of his property to such of his grandsons as
survive him and attain the age of 18 years, and gave also the income of property till they attain

17
the age of 18 years, the Privy Council held that the interest of the grandsons was not vested
under the Exception to Section 21.13

Illustration

A fund is bequeathed to such of the children of A as shall attain the age of 18, with a direction
that, while any child of A shall be under the age of 18, the income of the share, to which it may
be presumed he will be eventually entitled, shall be applied to his maintenance and education.
No child of A who is under the age of 18 has a vested interest in the bequest.

SECTION 23
According to Section 23. Transfer contingent on happening of specified uncertain event.-
Where, on a transfer of property, an interest therein is to accrue to a specified person if a
specified uncertain event shall happen, and no time is mentioned for the occurrence of that event,
the interest fails unless such event happens before, or at the same times as, the intermediate or
precedent interest ceases to exist.

Subsequent Contingent Interest-The rule enacted in this section is based on the principle that
property cannot remain without an owner even for a moment. This section contemplates a
transfer of property in which there is creation of a prior interest followed by a subsequent
contingent interest. In such transfers, after the termination of prior interest the property is made
to vest subsequently in another person upon the happening of an uncertain event. If the
subsequent contingency does not happen before termination of the prior interest, the interest
would have to remain in abeyance(void). In other words, there would be an interval between
termination of the prior interest and its subsequent vesting. Section 23 provides that the
contingent interest will fail and cannot vest unless the event occurs before or at the time of
termination of prior interest. Thus, where a property is transferred to A for life and then to B
provided B gets first division in Law-examinations, B must get first division before the death of
A. If B fulfils the condition after say, one month, of the death of A the property cannot vest in
him.
In Official Assignee Madras v. Vedavalli Thayaramma114, a testator bequeathed his properties

13
Sopher v. Administrator-Gn. of Bengal, AIR 1944 P.C. 67.
14
AIR 1926 Mad. 936.

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to his grandson or grandsons who might be born within ten years after his death. It was held that
the disposition through this will was void and cannot take effect because there would be an
interval of ten years after the termination of last interest (death of testator) during which the
estate is not vested in any person.

SECTION 24
According to Section 24. Transfer to such of certain persons as survive at some period not
specified.-Where, on a transfer of property, an interest therein is to accrue to such of certain
persons as shall be surviving at some period, but the exact period is not specified, the interest
shall go to such of them as shall be alive when the intermediate or precedent interest ceases to
exist, unless a contrary intention appears from the terms of the transfer.

Illustration

A transfers property to B for life, and after his death to C and D, equally to be divided between
them or to the survivor of them. C dies during the life of B, D survives B. At Bs death the
property passes to D.

This section contemplates a transfer in which an interest is created in favour of a contingent class
which is to be ascertained at the time of vesting of interest in favour of the transferee or
transferees. It is provided that where an estate is limited to two persons jointly subject to a
condition that interest therein shall vest to such of certain persons who would be surviving at
some period but, the exact period is not specified then, the property shall go to that transferee (or
transferees) who shall survive at the time of termination of prior interest. In other words, where
property is transferred to certain persons jointly subject to a condition that they survive the
termination of a prior interest then, the person who does not survive, shall get nothing and the
surviving person shall take the whole. For instance, A transfers his property to B for life and then
to C and D equally or, to the survivor. C. dies during the life of 8 whereas D survives B. Here, D
shall take the whole property after the death of B.

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BIBLIOGRAPHY
Books Referred

Dr. R. K. Sinha, The Transfer of Property Act, Central Law Agency, 2010
Dr. Avtar Singh, Textbook on The Transfer of Property Act, Universal Law Publishing
Co. Pvt. Ltd., 2006
Prof. G. P. Tripathi, The Transfer of Property Act, 1882, Central Law Publications, 2005
Dr. S. N. Shukla, The Transfer of Property Act, Allahabad Law Agency, 2008
A. K. Ray, The Transfer of Property Act, Law Publishers, 1962
Dr. Hari Singh Gour, The Transfer of Property Act, Delhi Law House, 2004

Online Sources

http://dheerajtyagiclasses.com/dtcadmin/uploads/1492066084Transfer%20of%20propert
y%20Act%20-%20DS.pdf
https://www.daytonestateplanninglaw.com/wp-
content/uploads/sites/2/2013/09/ch7.classification_of_property_interests.pdf
https://indiankanoon.org/search/?formInput=Vested%20and%20contingent%20interest

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