RAP- Rule against Perpetuity under TPA—Important for Upcoming Exams

RAP- Rule against Perpetuity under TPA, 1882

• Perpetuity means indefinite period.
• Section 14 of the Transfer of Property Act, 1882 (TPA) deals with the RAP. (UKJ-2008/ 11/ MPAPP-08).
• RAP restricts imposing conditions for non-alienation of property for indefinite period. Imposition of such conditions will be (MPJ-1989).
• Object: Section 14 is based upon the rule of public policy. (UKJ-2005) The frequent circulation of property is necessary for trade and commerce as well as for the betterment of the property itself.
• Perpetuity may arise in two ways—

1. By taking away power of alienation from the owner.
2. By creation of future remote interest.

• Perpetuity period—

1. Section 14 provides for maximum limit of perpetuity. Accordingly, it is life interest plus minority of the ultimate beneficiary. For the purpose of Section 14, the normal period of minority would be 18 years (whether there is a guardian appointed by the Court or not).
2. Under English law the minority period is 21 years.

• Exception: Thus RAP is not applicable in the following cases—(BJS-2009/ MPAPP-2010)

1. Transfer for the benefit of the public.
2. Personal agreement (such as, a lease with a covenant for renewal).
3. Covenant running with land.
4. Charge
5. Mortgage
6. Vested interest.

• Stanley vs. Leigh (1732 All ER 917) is related to rule against property.
• RAP on Muslim—Although Section 14 is not applicable to Muslim a gift to remote and unborn generations is void under Muslim personal law except gifts made in cases of Waqf.

Section 15—Transfer to a class of persons—

• Section 15 deals with transfer to a class of persons.
• Transfer may be made to the class of person but the same shall be subject to Sections 13 and 14.
• Section 15 provides that where property is transferred for the benefit of a class of unborn persons and transfer fails with regard to only some of them due to provisions under Section 13 and 14, then the whole transfer is not void. It fails in regards to only those persons who are unable to take the property due to Sections 13 and 14. Such transfer regarding other transferees shall be valid and effective.

Section 16—Subsequent interest subject to prior interest

• Section 16 provides that if the transfer of property is failed under Sections 13 and 14, the subsequent interest created in the ‘same transaction’ also automatically fails and become void.
• The leading case on the matter is Girijesh Dutta vs. Data Din (AIR 1934 Oudh 35)
• Alternative limitation—Alternative limitations are two independent limitations. Section 16 is not applicable to alternative limitations.

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