INTRODUCTION

Section 5 of the Transfer of Property Act, 1882 defines that, the property will
be delivered by a living person to one or more other people in the present date
or in future times or to himself only. The expression mentioned above “in
present or in future” is deriving the meaning of the word ‘deliver’. There will
be no transfer of future property. The transferee needn’t be a competent
person like a transferor. A transferee can also be a minor, insane or child in a
mother’s womb.

In this section “living person” includes “companies, private associations, which

are registered or not, but nothing in this section affects the law while doing the
transfer of property to any company or association or individual body”.

Kinds of transfer

Subsequent forms of transfer under the Act are:

Sale– It’s an out-and-out transfer of property And also the consideration is

money.

Mortgage– It’s a transfer of a limited interest during a property.

Lease– A lease may be a transfer of a right to enjoy the immovable property

for a particular time.

Exchange– It’s the same as sale, but differ in consideration. Here the
consideration is another thing not money.

Gift– Here, there’s no consideration.

Section 7 of the Act provides that, “the person who is allowed to sign a
contract is also allowed to transfer a property and then he will be allowed to
enjoy the property wholly after it takes place. Legally permitted and
determined for the time being in force.”

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 CONTINGENT INTEREST

Definition

Contingent interest

Where, on a transfer of property, an interest therein is created in favour of a

person to take effect only on the happening of a specified uncertain event, or if
a specified uncertain event shall not happen, such person thereby acquires a
contingent interest in the property. Such interest becomes a vested interest, in
the former case, on the happening of the event, in the latter, when the
happening of the event becomes impossible.

Exception : Where, under a transfer of property, a person becomes entitled to

an interest therein upon attaining a particular age, and the transferor also
gives to him absolutely the income to arise from such interest before he
reaches that age, or directs the income or so much thereof as may be
necessary to be applied for his benefit, such interest is not contingent.

Illustration

'X' bequeathed his property i.e. estate to 'Y' until he shall marry to 'Z'. 'Y's
interest in the bequeath is contingent because it depends upon a condition
precedent i.e. a marriage of 'Y' with 'Z'. An event has no proprietary interest in
the estate and cannot alienate it.

https://definitions.uslegal.com/c/contingent-interest/

https://www.advocatekhoj.com/library/bareacts/transferofproperty
/21.php?Title=Transfer%20of%20Property%20Act,
%201882&STitle=Contingent%20interest

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 Characteristics of contingent interest

A) A contingent interest is solely depending upon the fulfilment of a

condition.

B) If the transferee dies before obtaining possession the continent

interest fails and property revert to transferor .

C) Contingent interest is Transferable, whether it is heritable or not

depend upon the nature of such contingency.

CASE LAW -

1) Sundar Bibi vs Rajendra Narayan AIR1925 All.389.

In this case the Allahabad High Court held that in a vested interest
the title passes absolutely from the transferor to the transferee at
the date of the transfer, though the enjoyment may be postponed.

2) Rajesh Kanta Roy vs Shrimati Sunita Debi AIR1957, S.C.255 -

Fact -

One Ramani Kanta Roy executed a registered trust deed in respect of

his properties. The eldest son Rajesh was appointed the sole Trustee
to hold the properties under the trust subject to certain power and
obligation. After his death his two son Rajesh And Ramendra got
interest in the property. There was a clause in the trust deed that
both of them was to get interest in the properties allotted to each
other happening of the two events -

1) Discharge of all the debts specified in the schedule and death of

the settler himself.

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2) The trust was to come to an end on the death of settler and the
son were to get properties allotted to them there after.

A Supreme Court held that the interest taken by the two brothers
under the trust deed was vested and not contingent because it was
certain event.

A contingent interest depend solely upon the fulfilment of the

condition. In contingent interest there is no present right, there is a
promise to give right upon the fulfilment of a condition. A contingent
Interest is inalienable and not transferable.

Sundar Bibi vs Rajendra Narayan AIR1925 All.389.

Rajesh Kanta Roy vs Shrimati Sunita Debi AIR1957, S.C.255

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DIFFERENCE BETWEEN CONTINGENT INTEREST AND VESTED
INTEREST
CONTINGENT INTEREST
DEFINITION
Section 21 defines Contingent interest
Where, on a transfer of property, an
interest therein is created in favour of
a person to take effect only on the
happening of a specified uncertain
event, or if a specified uncertain event
shall not happen, such person thereby
acquires a contingent interest in the
property. Such interest becomes a
vested interest, in the former case, on
the happening of the event, in the
latter, when the happening of the
event becomes impossible.
FULFILLMENTS OF CONDITIONS
Contingent interest is solely depend
upon the fulfillments of any condition.
If the condition is not fulfilled the
interest fails
EFFECTS OF TRANSFEREE'S DEATH
Contingent interest is defeated by the
death of transferee before he obtains
possession.
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VESTED INTEREST
Section 19 defines Vested interest
Where, on a transfer of property, an
interest therein is created in favour of
a person without specifying the time
when it is to take effect, or in terms
specifying that it is to take effect
forthwith or on the happening of an
event which must happen, such
interest is vested, unless a contrary
intention appears from the terms of
the transfer.
Vested interest does not depend upon
fulfilment of any condition. It creates
an immediate right though the
enjoyment is postponed to a future
date.
Vested interest is not defeated by the
death of transferee before he obtains
possession.
WHETHER TRANSFERABLE AND
HERITABLE ?
It is both Transferable and heritable. If
It is Transferable but whether it is
the transferee of the vested interest
heritable , depends upon nature of
dies before actual possession or
condition.
enjoyment it passes to his heirs.
It passes not on heir on the death of
the transferee received to transfer.

PRESENT RIGHT OF ENJOYMENT

There is no present right of enjoyment, There is present, immediate right even

there is mere a promise for giving such when its enjoyment is postponed.
a right.

CHARACTERISTICS

A) This interest is entirely 1) Vested interest creates a present

dependent upon the condition.
It only happens when the
condition is fulfilled.
B) Death of the transferee before
getting the possession of the
property will result in the failure
of continent interest and the
property will remain with the
transferor.
right that is in effect immediately,
although the enjoyment is postponed
to the time prescribed in the transfer.
It does not entirely depend on the
condition as the condition involves a
certain event.
2) Death of transferee will not render
the transfer invalid as the interest will
pass on to his legal heirs.

C) Contingent interest is a 3) Vested interest is a Transferable and

Transferable right, but whether it is heritable right.
heritable or not, it depends upon
the nature of such any transfer and
the condition.

http://lawtimesjournal.in/contingent-and-vested-interest/