TITLE OF PROJECT

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----------Rule Against Perpetuity---------------

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Submitted by

Shashank Diwakar
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B.COM L.L.B(Hons.) 5th Semester

Roll No…48

Faculty of Law

Dr. Shakuntala Misra National Rehabilitation University, Lucknow

In
October, 2017

Under the guidance of

Mrs. Vijeta Dua Ma’am
(Faculty Of Law)

Designation Of Guide
Assistant Professor In Law
 CERTIFICATE

The project entitled “ Rule Against Perpetuity” submitted to the Faculty

of Law, Dr. Shakuntala Misra National Rehabilitation University, Lucknow
for Property Law, as part of Internal assessment, is based on my original
work carried out under the guidance of Mrs. Vijeta Dua Ma’am.

The research work has not been submitted elsewhere for award of
any degree. The material borrowed from other sources and incorporated in
the thesis has been duly acknowledged. I understand that I myself could be
held responsible and accountable for plagiarism, if any, detected later on.

Date:- October 28, 2017 Signature of the candidate

Shashank Diwakar
 ACKNOWLEDGEMENTS

I would like to express my special thanks of gratitude to my teacher Mrs.

Vijeta Dua Ma’am who gave me the golden opportunity to do this
wonderful project on the topic “Rule Against Perpetuity”, which also
helped me in doing a lot of Research and i came to know about so many new
things I am really thankful to them.
Secondly I would also like to thank my parents and friends who helped me a l
ot in finalizing this project within the limited time frame.
 Introduction
Perpetuity means indefinite period. A perpetuity, as defined by Lewis in his well known book,
‘‘Lewis on Perpetuities’’, is ‘a future limitation, whether executory or by way of remainder, and
of either real or personal property which is not to vest until after the expiration of , or will not
necessarily vest within, the period fixed and prescribed by law for the creation of future estates
and interests.’ Rule against perpetuity is the rule which is against a transfer making the property
inalienable for an indefinite period or for ever.

Sec.14 - Rule against perpetuity

No transfer of property can operate to create an interest which is to take effect after the life
time of one or more persons living at the date of such transfer, and the minority of some
person who shall be in existence at the expiration of that period, and to whom, if he attains
full age, the interest created is to belong.

In India section-14 of The Transfer of Property Act of 1882 provides that vesting can be
postponed up to the life or lives of the last person plus the minority of the ultimate beneficiary.
Minority in India terminates at the age of 18 years.

The rule against perpetuity in short - ' vesting cannot be postponed beyond the life of living
person and minority of Unborn person'. This provision permits perpetuity up to certain period,
beyond that period law does not allow perpetuity.

The head note is wrongly worded or Framed, because Section 14 allows to certain extent the
postponement of vesting and therefore the title should have been 'rule of perpetuity'.

The rule against perpetuities (also known as the rule against remoteness of vesting) requires that
future trust interests (that is, interests that do not take effect immediately) must be certain to vest
within a defined period of time known as the perpetuity period.

For example, Catherine creates a trust to pay income to her husband, Colin, for life, then to hold
the capital for her son, Charles, if he survives Colin. Charles' contingent interest must be certain
to vest within the perpetuity period that applies to the trust. If it is not certain to do so, it is void
at common law.

Following conditions must be satisfied to attract Section 14:

1. There must be transfer of property.

2. The transfer should be to create an interest in favour of an unborn person.

3. Interest created must take effect after the lifetime of one or more persons living at the

date of such a transfer and during the minority of the unborn person.

4. The unborn person must be in existence at the expiration of the interest of the living

persons.

5. The vesting of the interest in favour of the ultimate beneficiary may be postponed only

up to the life or lives of living persons plus the minority of the ultimate beneficiary but not
beyond that.

Illustrations :

1) If an estate is given to a living person, A for life, then to a living person, B for life and
then to Unborn son of B. Here the son of B must be in existence on or before the date of
expiry of the life estate in favour of B.
2) The vesting of absolute interest in favour of an Unborn person maybe postponed until he
attains full age. for example an estate may be transferred to A, living person, and after his
death To His unborn son when he attains the age of 18. Such a transfer would not be
violative of the rule against perpetuity.
Origin: Duke Norfolk’s Case

The rule has its origin in the Duke of Norfolk’s case of 1682. That case concerned Henry, 22nd
Earl of Arundel who had tried to create a shifting executory limitation so that one his titles would
pass to his eldest som (who was mentally deficient) and then to his second son, and another title
would pass to his second son , but then to his fourth son. The estate plan also included provisions
for shifting the title many generation later, if certain conditions should occur.

When his second son, Henry, succeeded to one title, he did not want to pass the other to his
younger brother, Charles. Charles sued to enforce his interest, and the court held that such a
shifting condition could not exist indefinitely. The judges believed that trying up property too
long beyond the lives of living at the time was wrong, although the exact period was not
determined until another case. Cadell v. Palmer. 150 year later.

EXTENT OF PERPETUITY PERIOD

Position in India – Life or any number of lives in being + period of gestation + minority period
of the unborn beneficiary.

English Law – Life or lives in being +period of gestation +minority period.

Difference between Indian and English Law:

1. The minority period in India is 18 years whereas it is 21 years under English law.

2. The period of gestation should be an actual period under Indian Law but it is a gross

period under English law.

3. Under Indian law, property should be given absolutely to the unborn person whereas in

English law, need not be absolutely given.

4. The unborn person must come into existence before the death of the last life estate
holder as per Indian law whereas he must come into existence within 21 years of the death

of the last life estate holder in case of English law.

Rule against perpetuity under Hindu and Muslim law:

Under Muslim Law: This Section does not apply to Mohammedans. A gift to an unborn
person is void except in case of Wakf (ABDUL KHADUR V. TURNER, ILR 9B 158).

Under Hindu Law: A gift or bequest in favour of an unborn person is void but now under
T.P.Act it is valid (Section l3 of the T.P.Act).

Philosophy underlying the principle -

The general rule is that disfavour perpetuity and it is based on the following Grounds..

Jurisprudential aspect:

Sir D. Mulla "Liberty of alienation shall not be exercised or used for its own destruction. This is
because if the owner having inherent power to transfer the property uses the right to the extreme
and he thereby destructs the further right of alienation of future transferee.

Social aspect:

If perpetuities are allowed the property which is the subject matter of the transfer will become
ex-commercial, for example put out of Commerce. Though the transferee receives the property,
he has no power to alienate it .

logical aspect:

Sir D. Mulla , " It is illogical to imagine at dead person below his Grave controlling properties
above his grave."
Illustration:

1) Property to be transferred to A for life then to B for life then to such of B's son as shall
First attain the age of 18 years and one day. Transfer is void.
2) property transferred to A for life then B for life both A and B are leaving at the date of
the transfer. The transfer is valid.

Exception to the ‘Rule against Perpetuity’

Following are the nine exception to the rule against perpetuity:

1) Vested interest is not affected by the rule because once the interest are vested it cannot be
bad for remoteness.
2) The rule is not applicable to land purchased or held by Corporation.
3) Gift to charities, the rule does not apply to transfer for the benefit of public for religious,
pious, or charitable purposes.
4) Properties settled upon individuals for memorable Public Service.
5) The rule against perpetuity does not apply to Personal agreement. For example -
agreement which do not create any interest in the property.
6) A covenant of redemption in mortgage does not effect by the rules the rule.
7) The does not apply to contacts for Perpetual renewal of lease.
8) The rule also does not apply where only charges is created which does not amount to a
transfer of an interest.
9) Contract of preemption also not affected by rule against perpetuity.
Case Law –

1) Anand Rao Vinayak Vs Administrator general of Bombay, 1896 .

In this case Bombay High Court declared that the gift void as offering against
perpetuity when a gift was made of movable property to a son with gift of
shares in the property to son's sons son when they should attend the age of 21.

2) Abdul fata Mahomed VS Rasamaya ,1894.

The privy Council held thar a gift to an Unborn generations is Forbidden by

Mohammedan law except in the case of Wakf.

3) Rambaran vs Ram Mohit AIR 1967 S.C. 744 .

Supreme Court held that the rule against perpetuity does not apply to Personal
agreements, for example....

agreements which do not create an interest in the property.