RULE AGAINST ACCUMULATION SECTION 17- IT IS EXCEPTION

OF S11
ACCUMMULATION= PROFITS OR
PROPERTY, it can be whole or in part

INCOME

ARISING

OUT

OF

THE

Section 11 says conditions which restrains the enjoyment of property

which is absolutely transferred is void, Section 17 is the exception of
this rule , the application of S11 applies only absolute transferred,
but section 17 applies all kinds of transferred.
it means S17 postpone the beneficial enjoyment of a property, such
postponement is discouraged by law just as postponement of vesting of
interest has been that discouraged under the rule against perpetuities .
Under section 17 direction for the accumulation of income is allowed but
not beyond a certain period. The maximum permissible lime /period upto
which income of the property may be accumulated is:
a) Life of the transferee or,
b) A period of 18 years, whichever is a longer period
So a direction of postponement of beneficiary enjoyment or in other word
which makes accumulation of income beyond this period of maximum
permissible limit is void.
Illustration
A transfer his properties to B for life with a direction that the income of the
said properties shall accumulated during As life and shall be given also to
C. The direction for the accumulation of income is valid , upto life of B
A transfers a property to B for life and thereafter to Bs such son who first
attains the age of 25 years with a direction for accumulation of income till
Bs first son attains 25 years . The direction of the accumulation of such
income is void, reason it is beyond the permissible limit ( life or 18 years).
A transfers property to B in 1960 with a direction for the accumulation of
its benefits upto 1990. A dies in 1985 thus the transferor lives for 25 years
which is more than 18 years . The direction for accumulation is valid upto
1985 ( for 25 years) because it is the longer period.
Exception
1. Payment of Debts- the period of accumulation can be exceed in
case of payment of bebts. For example A makes a gift of his house
to B with a direction that form the rents of the house B shall pay Rs

500 per months towards the satisfaction of a debt of Rs on Lac

incurred by A. The direction of the accumulation of income is valid
even it continues after the life of A or expiry of period of 18 years.
2. Raising portions- Portion ordinarily means a part or share which
points to the arising of something our of something less for the
benefit of some children or class of children.
3. Preservation of Property- for the maintenance of property/
preservation of property, it is allowed.