Author: Divya Kanojiya, II year of B.A.,LL.B.(Hons.) from Hidayatullah National Law University.
INTRODUCTION
When the property gets transferred it also involves the transfer of interests, by looking at the point of view of quantity the interest may be partial or absolute. Also, by looking at the point of view of the time of accruing the transfer can be contingent or vested. Here it is to be noted down that when the transferee receives the interest immediately then it is called vested interest. Where the interest is contingent in nature then the property will be received by the transferee only on the happening of that event. The title of the transferee is not complete unless the event which is specified is completed[1].
(a) The happening of the event which is going to happen and was the must or,
(b) The time in which it is to be taken is mentioned nowhere or,
(c) The specification was given to take effect immediately
For example, let’s take the example in which there are two persons Arun and jay, here Arun makes a gift of his house to jay and does not specify the date of ownership to be transferred so here, in this case, the interest of jay is the vested interest.
Clarification to section 19, which states that the right of postponement does not affect the vested interest. The vested interest also remains unaffected when the title is passed to another on the happening of the event. The following explanation provides to appear when the transferee had no vested interest nonetheless the interest is vested.
1. Postponement of enjoyment– the postponement does not mean that interest on the transferee is not vested. The primary thing in the transfer of property is that thereis the transfer of title, possession of the property is secondary in nature. The fact that the right is being postponed cannot be said that vested interest has not been given[2].
For example,ani wants to transfer his property to his son happy and she kept the condition that he will receive the property only on the day when happy will attain the age of majority which is according to the Indian contract act 18 years so it cannot be inferred that the vested interest has not been given, but it is just postponed.
2. Prior interest– where the prior interest is made in the transfer there is also the postponement on the enjoyment of property.
for example, Vinay wants to transfer his property to Yuki and created a life interest is created with Hema, in this case, also the interest created in the right of enjoyment is postponed till the life of Hema and after the death of Hama, the property will get transferred to Yuki.
3. Direction for accumulation of income – according to section 17 of the act, when the property while transferred was given certain directions of the accumulation in income which is valid for the period prescribed. Then, the interest of the transferee is never the less vested.only the right to enjoyment was postponed and not the vesting nature. In the case of kokilambai v. N. Raman kokilambal[3], there was the deed that was being made and the property can only be settled on the death of the settlor, the supreme court, in this case, held that settee cannot be said to the absolute owner of the property during the life of settlor.
4. Conditional limitation – in India as per section 28 the conditional limitation does not prevent to creation of a vested interest rather it can be said that the interest which is already been vested can be divested condition and can be vested somewhere else[4].
NATURE OF VESTED PROPERTY
1. Present fixed-right- Vested interest in the fixed right on the property. In the transfer of the property the person on whom the interest is being created gets the present fixed right in the property. But in the case where the contingent interest is being created, there will be merely chance of possible right to get the property.
2. Heritable and transferable interest – the vested interest can be said as the heritable interest when the transferee (the person on whom the property is vested) dies. Then, his interest in the property vested to his legal heirs[5].
In the case of RajesKanta Roy v. Shanti devi[6], the trust deed was executed by ramanikanta. The deed provided that the trust existed for the property belonging to the settlor of two sons.
The trust was to terminate (1) upon the death of the settlor and (2) full payment of all the debts also in the deed it was mentioned that if either of the two sons will die before payment of debts then property will be entitled to the heirs. The settlor died before the discharge of debts.
The question that came before the court is that – the trust deed was that the enjoyment was to be restricted until the debts are discharged. The court here observed that if either of the two sons died before the payment of the debt, the heirs will be entitled for getting the shares the interest of sons as heritable interest. The interest conferred upon two sons will also be vested in nature.
Time of vesting of interest –section 19 of transfer of property act states that when no time of vesting is specified or the enjoyment is postponed then it is immediately vested and is happen to be immediately vest however the enjoyment is postponed. However, if any time is specified in the transfer then the word would constitute the contingent or vested interest. However the usage of the word must be kept in mind like “to be paid”, “payable”.
Example –Arohi transfers her property to Bruno and Tokyo equally on them attaining majority and if Bruno and Tokyo die under the age of 18 years, then her property will go to nanny. Here in this case both Arohi and Tokyo will havea vested interest even though the interest is likely to be uncertain in the future.
HOW IS VESTED INTEREST DIFFERENT FROM CONTINGENT INTEREST
In the concept of contingent interest, there is a mere possibility of a person fulfilling the condition and taking the property. There is expectancy on the part of a person having contingent interest.
If the happening of the event does not happen or the condition does not get fulfilled then the person will not receive the property.
For example, Ayush promised Ciaro that if he will secure 99% marks in exam then, he will acquire the contingent interest in the property and if he will not then not get the property.
Leake v. Robinson[1],when the bequest is given attaining at ‘particar age’ ir might be after that it can be implied that it is contingent interest. The major difference can be said as vested interest depend not entirely on the condition but contingent interest is depended on condition only.
CONCLUSIONS AND FINDINGS
The transfer of property act, 1882 contains the provision of vested interest which is very important and many provisions are related with the provision. The main thing to understand here is if the condition is fulfilled then only it take the place of vested interest and if the condition is not fulfilled then, it called as contingent interest. Here the paper contains all the important provisions related to vested interest with the examples which we can relate from our day-to-day happenings.
[1]Lachman Lal Pathak vs Baldeo LallThathwari, 68 Ind Cas 944.
[1] 21 DR. R.K. SINHA, THE TRANSFER OF PROPERTY ACT111(Central Law Agency 2021). [2]Id. at 112. [3]Kokilambal&Ors vs N.Raman, [4]Megha Mahesh, A DISQUISITION ON VESTED AND CONTINGENT INTEREST UNDER THE TRANSFER OF PROPERTY ACT, 1882, volume II, Issue III, LEX RESEARCH HUB JOURNAL 10-14. [5]Dr. R.K, supra note 1, at 115. [6]RajesKanta Roy vs Santi Debi, 1957 AIR 255, 1957 SCR 77.