Modern Rule Against Perpetuity and Its Application in Bangladesh

Repoter : News Room
Published: 18 May, 2022 11:53 am

Introduction

The rule against perpetuity is a function for maintaining a balance between the living and the dead. The law favors alienation rather accumulation. So, the rule concerns with certain interest created in prosenti which are sought to be made inalienable for an indefinite period. As the Transfer of Property Act, 1882 only deals with the conveyance between the livings, section-13 & 14 gives an opportunity to convey property to the unborn and the limitation of it. The rule contains some conditions regarding the alienation of the property to the unborn. In this article, the rule against perpetuity and its application on distinct circumstances is discussed with special reference to Bangladeshi law and its inconsistencies with English law.

History of Rule against perpetuity

The law favors alienation of property. Therefore, it is the aim of property law that the property convey one person to another which will eventually prosper the society as a whole. The liberty of alienation shall not be exercised to its own distraction.[1] All contrivances shall be void which tend to create perpetuity or place property for ever out of the reach of the exercise of the power of alienation.[2] According to Jekyll, MR., if the perpetuity was allowed “the mischief that would arise to the public from estates remaining forever, or for a long time unalienable or untransferable from one hand to another, being a damp to industry, and prejudice to trade, to which may be added the inconvenience and distress that would be brought on families whose estates are so fettered”.[3] Perpetuity has also been described as “odious in law, destructive, to the commonwealth, and an impediment to commerce, by preventing the wholesome circulation of property”.[4]

Rule against perpetuity

Perpetuity in primary sense refers to a disposition which makes property unalienable for indefinite period. In present sense this transfer is concerned with the interest arising in future not in present. Section-14 of the Transfer of Property Act,1882 deals with the modern rule against perpetuity. The section mainly says that in time of transfer of property the vesting of property cannot be postponed beyond the lifetime of any one or more persons living at the date of transfer and only in case of an unborn person, the vesting of an interest may be postponed until he attains majority.[5] It can be pointed out that under Bangladeshi law, the property should be given absolutely to the unborn person.[6] Partial vesting is not allowed fulfilling the criteria.[7] As long as the transferees are living persons, any number of successive estates can be created but if the ultimate beneficiary is an unborn person, section-13 of the Act demands that the interest created must be vested and if he has not came into existence before the termination of the last prior estates, the transfer to him fails. The rule, however, does not demand that the vesting shall take place at the birth of the ultimate beneficiary.[8] What it demands is that vesting cannot be delayed in any case beyond his minority.[9] The object of the rule is to stop the inalienability of property for unlimited period. The exception to the rule is stated in section-18 of the Act i.e. charities & public welfare which includes advancement of the religion, education, health, commerce, safety etc. The minority in Bangladesh terminates at the end of 18 years and if any guardian is appointed by court then end of 21 years under the Majority Act, 1875.

Application of the rule against perpetuity

The rule against perpetuity applies to immoveable and moveable both.[10] The rule against perpetuity is applicable only to future interest in land which may possibly vest beyond the legal limit of perpetuity.[11] Even if the covenant is not regarded as a personal covenant it is hit by rule against perpetuity in as much as no specified time has been mentioned within which the repayment of the consideration is to be made to the transferee.[12] The rule against perpetuity does not apply to personal agreements.[13]

This section directly applies to Hindus.[14] Before the Amending Act of 1929, the rule was not applicable to Hindus. Irrespective of statute, a perpetuity is repugnant to Hindu Law except in the case of religious and charitable endowments.[15] A disposition of shebaitship by creating successive life interests is invalid.[16] A gift to remote and unborn generation is forbidden by Muslim Law except in the case of wakf and that wakf is invalid if the gift is illusory.[17] However, the law is altered later by the Mussalman Wakf Validating Act 6 of 1913 and now a wakf is valid even if the gift to charity is unsubstantial and illusory, provided that there is an ultimate gift to charity.[18]

The test whether a covenant violates the rule against perpetuity, one must look to all possible contingencies.[19] An agreement to sell or re-convey land is an agreement merely personal not creating an interest in land and such an agreement doesn’t offend the rule.[20] The rule embodied in section-14 of the Act is intended to prevent the creation of an ‘interest’ in property, and as a contract to sell does not by itself create interest in immoveable property, the rule is not applicable to such cases.[21] A clause entitling the lessor to terminate the lease at any time contained in a lease which is described as permanent, does not offend against the rule.[22] A charge does not amount to a transfer of an interest in land and is therefore not affected by the rule against perpetuity.[23]

Rule against perpetuity in English Law

The rule against perpetuity in England is a later development. It was soon perceived that when increased facilities were given to the alienation of the property, and modes unknown to the common law arose, it was necessary to confine the power of creating these interests within such limits as would be adequate to the exigencies of families without transgressing the bounds prescribed by a sound public policy.[24] The minority period on England is 21 years. Furthermore, the gestation period is gross in English Law. The property need not to absolutely given in English law. Also, the unborn person needs to come into existence within 21 years of the termination of the last estate.

Conclusion

As we discussed the rule against perpetuity, we can see the existence inconsistencies regarding the application of the rule. The application of the rule in Bangladesh differs from that of in England in many ways. However, sometimes the rule may seem old fashioned seeing the modern outlook of law in 21^st century where lots of legal provisions are there protecting the owner’s power of alienation and freedom. Furthermore, the rule lacks enough adaptability to pace with the rapid changes of law time to time in this modern era. Therefore, Maxim Gorky said “Every new time will give its law”.

Writer: Tariq Monawer, Student, Department of law, University of Chittagong.