Synopsis on

RULE AGAINST PERPETUITY

INRODUCTION
Rule against perpetuity has been defined under section-14 of Transfer of Property Act and read
as no transfer of property can operate to create an interest which is to take effect after the
lifetime 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.
The rule against the perpetuity simply means that all devices shall be void which tends to create
a perpetuity or place property, forever, out of the reach of exercise of the power of alienation. So
long as transferees are living persons, any number of successive estates can be created.
Ingredients of rule against perpetuity

There must be a transfer of property.

The vesting of interest in favour of ultimate beneficiary is preceded by life or limited

interest of living person.

The ultimate beneficiary must come into existence before the death of the last preceding

living person.
Vesting of interest in favour of ultimate beneficiary may be postponed only up to the life
or lives of living person pus minority of ultimate beneficiary, but not beyond that.

Rule against perpetuity is applicable to both movable as well as immovable property.

Minority, in India, terminates at the attainment of 18 years. However, the term minority in
sec.14 of Transfer of Property Act is to be understood as only 18 years and not any other age that
is legal minority, where the age of minority was extended to 21 years.
There is certain exception to sec.14 of Transfer of Property Act on which this rule does not
apply. They are personal agreements, covenants for pre-emption, covenants running with land,
charge and rule against perpetuities e.t.c.

TENTATIVE CHAPTERISATION
Definition/Meaning of Perpetuity
Perpetuity literally means eternity, infinite, or forever. The term is not explained anywhere with
reference to specific number of years, it is understood under Section 14 of Transfer of Property
Act as equivalent to the life time of one or more living persons plus the minority of unborn
person, who would take the absolute interest in the property.
Object
The true object of the rule against perpetuity is to restrain the creation of future conditional
interest in property. To protect this situation section 14 of the Transfer of Property Act has
embodied the rule against perpetuity.
Rule against Perpetuity
The rule against the perpetuity simply means that all devices shall be void which tends to create
a perpetuity or place property, forever, out of the reach of exercise of the power of alienation. So
long as transferees are living persons, any number of successive estates can be created.
Exceptions
Rule against perpetuity does not apply to certain thing such as personal agreement, a covenant of
pre-emption, charge, mortgages, gifts to charities such as transfer for the benefit of public, for
the advancement of religion, knowledge, health, commerce, safety, or any other object beneficial
to the mankind.
Situation under Hindu and Muslim Law
Section 14 of Transfer of Property Act or this rule against perpetuity is made applicable on Hindu
after 1929, but this provision is not applicable to Muslim Law but a gift to remote and unborn
generations was held void although exception has been made in case of wakfs.

Difference between Indian law And English law

According to the English law, the vesting of property can be postponed for any number of lives
in being and an additional term of 21 years afterwards, and for as many months in addition as are
equal to the ordinary period of gestation, should gestation exist . The additional term of 21 years
is irrespective of the fact whether such person is a minor or not.
But according to the Indian law, the vesting can be delayed beyond the lifetime of persons in
being for the period only of the minority of some person born in their lifetime, and the addition
of an absolute period of 21 years has not been adopted by section 14 of Transfer of Property Act.

CASE LAWS
Ram Newaz v. Nankoo1
The plaintiff sold his entire share in a village reserving two bighas of land for himself. There was
condition that the sale remains in his possession for life and after his death in the possession of
his descendants. With this deed he had created a life estate in favour of himself and his son and
also their unborn descendants. Court held, that sale of two bigas of land was void.
Veerattalingam v. Ramesh2
A executed a will giving the possession of her properties to her sons without any power of
alienation, and after that a life interest was created in favour of her sons sons, who were alive at
time of executing the bequest testament further provided that after the death of such grandsons,
the property was to vest in great grandsons. Held this bequest was not hit by section 14 of

1 AIR 1926 All 283

2( 1991) 1 SCC 489

Transfer of Property Act because both grandson and great grand sons were living on date the
bequest was created.

Nafar Chandra v. Kailash3

In this case the Shebaits of temple agreed to appoint the family of one person as pujaris from
generation to generations to perform the services of temple and make provision for their
expenses and remunerations of office; it was held that agreement is valid and not affected by rule
against perpetuity.
Ram Baran Prasad v. Ram Mohit Hazra4
Main contention in this case was whether pre-emption clause executed by the parties would be
hit by rule against perpetuities. Held that the covenant of pre-emption was not hit by the rules
against perpetuity.
R Kempraj v. Burton Son and Co.5
In this case issue was that whether an option given to tenant to get lease, which is initially for
period of 10 years, renewed after every 10 yr is hit by section 14 of Transfer of Property Act.
Held that all contrivances which tend to create perpetuity or place property for ever out of reach
of exercise of the power of alienations shall be void.
Trustees of Sahebzadi Olia Kuslum Trust v. Controllerof Estate Duty6

3 AIR 1921 Cal 328

4 AIR 1967 SC 744
5 AIR 1970 SC 1872
6 AIR 1998 SC 2986

A trust wakf-alal-aulad was created by a Muslim. Settlor executed trust by selling properties for
benefit of family, children or descendants from generation to generation, and thereafter for
maintenance of holy shrine. Held that it is valid creation of trust and not hit by rule against
perpetuity.

BIBLIOGRAPHY
BOOKS

Law of Property, 2nd Edition by Dr. Poonam Pradhan Saxena

The Transfer of Property Act, 4th Edition by Avtar Singh
The Transfer of Property Act, 3rd Edition by Dr.T.P. Tripathi

WEB SOURCES

www.scconline
www.manupatra.com