Meaning and Concept
The Rule Against Perpetuity is a fundamental principle of property law that prohibits the creation of future interests in property that may vest too remotely. The object of the rule is to prevent property from being tied up indefinitely and to ensure its free circulation. In India, this rule is codified under Section 14 of the Transfer of Property Act, 1882. According to this provision, a transfer creating an interest which is to take effect after the lifetime of one or more persons living at the date of transfer and the minority of a person who shall be in existence at the expiration of that period is void. The rule ensures certainty and marketability of property.
Statutory Provision and Legal Framework
The Rule Against Perpetuity is governed by Section 14 of the Transfer of Property Act, 1882, which lays down the maximum permissible period for vesting of future interests. The permissible period is the lifetime of the last living person at the time of transfer plus the minority of a person in existence at the termination of that life. Indian law adopts a statutory and simplified version of the common law rule. Courts have clarified that the rule applies only to transfers inter vivos and not to transfers by will, though similar principles are applied in testamentary dispositions. Any transfer violating this rule is void ab initio.
Essential Characteristics and Importance
The essential features of the Rule Against Perpetuity include restriction on remote vesting, fixed permissible period, application to future interests, and voidness of offending transfers. The importance of the rule lies in preventing perpetual control over property and promoting its free alienability. In examinations, students are often required to calculate the perpetuity period or analyze whether a given transfer violates Section 14. Understanding this rule helps in distinguishing valid future interests from void contingent transfers under property law.
Real-Time Example
A real-time example of the Rule Against Perpetuity is when a person transfers property to A for life, then to A’s unborn great-grandchild. Since the great-grandchild may not be in existence within the permitted period, the transfer in favor of the great-grandchild is void under Section 14 of the Transfer of Property Act, 1882. Another example is creating a trust that postpones vesting beyond the lifetime of living persons and the minority period. These examples show how the law restricts excessively delayed vesting of property rights.
Mnemonic to Remember
A simple mnemonic to remember the Rule Against Perpetuity is “L+M”.
L – Life of living persons
M – Minority period
Remembering “L+M” helps students quickly recall the permissible period during examinations.
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