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Rule against perpetuity

Published : Thursday, 27 September, 2018 at 12:00 AM  Count : 1285
Mahjubah Marzan

Rule against perpetuity

Rule against perpetuity

Ruth Deech, a British academic and lawyer, explained rule against perpetuity as a function for maintaining a balance between the living and the dead. The thinking behind this was that,since the dead cannot respond to changes in circumstances as they arise, wealth should be controlled by the living persons. The rule against perpetuity contained in section 14 of the Transfer of Property Act, 1882 states that no transfer of property can create an interest which will take effect after the lifetime of one or more persons living at the date of such transfer. From the aforesaid section, we can extract two rules. Firstly, the vesting of the property cannot be delayed beyond the lifetime of any one or more persons living at the time of the transfer.

Secondly, the vesting of an absolute interest in favour of an unborn person maybe postponed until he attains full age of majority which is according to the Majority Act, 1875, 18 years and according to the Guardian and Wards Act, 1920, 21 years of age. For example, a living person may transfer some of the property to another person provided that after his death the property will go to his unborn son when he attains the age of 18 years. Such a transfer is in accordance with the rule against perpetuity. It can be pointed out here that, under Bangladeshi law, the property should be given absolutely to the unborn person which means; to fulfil the criteria of the rule against perpetuity, partial vesting of the interest given to the unborn person is not allowed.

Section 10 of the Transfer of Property Act also states that, where the property is transferred subject to a condition or limitation absolutely restraining the transferee or any person claiming under him, the condition or limitation is void. Except in the case of a lease, vested interests, charities, creation of charge, personal agreements. There may be two ways in which the property can be tied up for too long, one is either by imposing a condition absolutely restraining the transferee from parting, disposing his interest in the property or by creating a succession of partial future interests until a remote period when the property will vest in somebody absolutely. Thus, section 10 first creates the stepping stone by invalidating conditions against alienation by restraining powers of creating future interest.

Before the Amending Act of 1929, the rule was not applicable to Hindus rather enactments such as- Hindu Disposition of Property Act 1916 & Madras Act, 1914 were applicable. Even though an exception has been made in favour of waqfs, chapter II of the Transfer Property Act is not applicable to Muslims.

When we talk about the rule against perpetuity, there are mainly two periods on the question. One is the lifetime of one or more living persons living at the date transfer & to whom the prior life interest is vested. The complexity lies here in the sense that, the rule against perpetuity would be much simpler and easier to apply if there were provision for only one period of time, not two. According to the researchers, Morris and Wade- the complexity behind calculating the perpetuity has been described as "formidable complexity". As a result, there is ample scope of arising uncertainty during the lifetime period or during the minority period of the vested persons. One of the main purposes of the rule was to prevent the owner from holding the property for too long but by creating trust or fund for charitable purposes, the family estate can be used for a longer period of time.

Another of the main purpose of the rule was to promote the land's inalienability. But this seems old-fashioned compared to the twenty-first century's modern outlook of law. Now, there are so many provisions and enactments with a view to ensuring the owners' rights & freedom. With a contrasting view, this rule lacks enough adaptability to pace with the rapid changes in law. Land cannot, therefore, be said to be inalienable merely because it is held in trust until the beneficiaries' interests vest.

Mahjubah Marzan is a student of law at University of Chittagong

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