Application and relevance of rule against perpetuity

this presentation gives a very basic idea about all the aspects of the rule against perpetuity.

1. APPLICATION AND RELEVANCE OF RULE AGAINST PERPETUITY SUBMITTED BY: Prof. Amira Singh

2. INTRODUCTION OF RULE AGAINST PERPETUITY Rule against perpetuity has been dealt under section 14 of Transfer of Property Act, 1882. Perpetuity simply means “indefinite Period”, so this rule is against a transfer which makes a property inalienable for an indefinite period. How Perpetuity May Arise? Perpetuity may arise in two ways – by taking away from transferee his power of alienation (such a condition has been made void under S.10 of the Act) by creating future remote interest (which has been prohibited under S.14 of the TP Act) Rule against perpetuity is the rule against such creation of future remote interest or we can say is arule against remoteness of vesting(interest). Remoteness here means “The state of being unlikely to occur”.

3. OBJECT OF SECTION 14 OF TRANSFER OF PROPERT ACT, 1882 It is important to ensure free and active circulation of property both for trade and commerce as well as for the betterment of the property. There are people who want to retain their property in their own families from generations to generations. This will be a loss to the society because it will be deprived of any benefit arising out of that property. Free and frequent circulation is important and the policy of the law is to prevent the creation of such perpetuity. Thus, the object of section 14 is to see that the property is not tied- up and to prevent creation of perpetuity. What Does The Law Say? The rule against perpetuity as dealt under section 14 makes such a transfer (of property) inoperable where condition is laid down for vesting of interest after the life of the last preceding interest holder/s and beyond the minority of the ultimate beneficiary

4. ESSENTIALS OF SECTION 14

5. EXCEPTIONS OF SECTION 14 Transfer for public benefit -  Where property is transferred for the benefit of the people in general, then it is not void under this rule. E.g. for the advancement of knowledge, religion, health, commerce or anything beneficial to mankind. Covenants of Redemption -  This rule does not offend the covenants of redemption in mortgage. Personal Agreements -  Agreements that do not create any interest in the property are not affected by this rule. This rule applies only to transfers where there is a transfer of interest. Pre-emption -  In this there is an option of purchasing a land and there’s no question of any kind of interest in the property, so this rule does not apply. · Perpetual Lease - It is not applicable to the contracts of perpetual renewal of leases. Mortgages -  because there is no creation of future interest.

6. CONCLUSION Therefore S.14 provides a rule against perpetuity i.e. a rule against remoteness of vesting, in absence of which the society shall definitely suffer a loss because of the stagnation of the properties. It would cause great hardship in the easy enforcement of law which shall be detrimental to trade, commerce, intercourse and may also result into the destruction of the property itself. So this rule against perpetuity ensures free and active circulation of property both for the betterment of the property as well as for the betterment of the society at large.

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