Explain about a). Rule of perpetuity b).

Rule of acceleration

Rule of perpetuity
Introduction
Perpetuity is derived from the Latin word “perpetuus” meaning continuing
throughout or lasting forever i.e. indefinite period and in Hindi it means
“अनन्त काल”. The main purpose of this rule is to restrict the concentration of
any wealth or any precious thing or any important thing in the hands of very
few. This rule was made to help distribution of wealth from a few people
which they might have amassed by any method whether legal or illegal. This
article discusses the rule against perpetuity in detail highlighting the
detriments it walks with and the possible way of positively visualizing them.

The concept of rule against perpetuity

As we have an idea about the concept of ‘perpetuity’, it is ideal to note that
an alternative name that can be assigned to the rule against perpetuity is
the rule against remoteness of vesting. This is because the perpetuity role
limits a transfer of property that renders such property as inalienable (not
subject to being taken away from or given away by the possessor) for an
indefinite period of time or forever. Perpetuity arises in two ways in every
disposition case of a property, namely,

1. By taking away the power to alienate, belonging to the transferee, or

2. By means of creating future remote interest.
Section 14 of the Transfer of Property Act, 1882 embraces the rule against
perpetuity. According to this provision, transfer of property cannot be said to
operate for generating an interest that will be taking effect after the lifetime
of one or more persons living at the time of such transfer. Put simply, Section
14 states that vesting of interest cannot be delayed beyond the life of the
last preceding interest in the living person(s) and the minority of the ultimate
beneficiary in a transfer of property. Section 14 therefore provides that
postponement or delay in grant of interest can be allowed for a certain
period only. This is because, if vesting of interest is made to be carried out
beyond a certain period, such a transfer of property will be deemed void.

The primary objective behind the rule against perpetuity is that no property
should be left to be alienated for an indefinite period, for that will render the
property to be destroyed or damaged. Free and active circulation of property
for the purpose of effective trade and commerce and proper maintenance of
the property, is another necessary objection of the rule against perpetuity
that needs to be noted.

Arguments in favour of the rule against perpetuity

1. Encourages the efficient use of property: By preventing property

interests from being tied up in perpetuity, the rule allows property to
be used and enjoyed in a reasonable manner, thereby promoting
efficient use and development of the property.
2. Promotes flexibility: The rule against perpetuity provides a means
for property interests to be redefined over time, thereby promoting
flexibility and the ability of property owners to respond to changing
circumstances.
3. Protects the rights of future generations: The rule against
perpetuity ensures that property interests cannot be locked up
indefinitely, thereby protecting the rights of future generations to use
and enjoy property in a reasonable manner.
4. Supports the free market: The rule against perpetuity helps to
ensure that property is available for transfer and that the market
remains active and fluid. This, in turn, supports the free market and the
efficient allocation of resources.
5. Prevents abuses of power: The rule against perpetuity helps to
prevent abuses of power by those who hold property interests, by
ensuring that interests cannot be held indefinitely or for an
unreasonable length of time.
Generally speaking, the rule against perpetuity is considered to be one of the
relevant principles of property law that while on one hand promotes fair and
effective use of the concerne property, on the other it looks after the welfare
of the property and prevents alienation of such property, thereby protecting
the rights of both present and future generations.
Arguments against rule against perpetuity
The relevance of rule against perpetuity has been subjected to critical
analysis over the years by several scholars when put in context of the
present times. Such criticism has been laid down hereunder:

1. Inflexibility: Argument stating that the rule against perpetuity comes

with a rigid outfit thereby failing to adapt to changing needs of the
society stands as an addition to the contention that the rule should be
modified or replaced with a more flexible system that better reflects
modern realities.
2. Limited applicability: The rule against perpetuity only applies to
certain types of property interests, such as trusts and estates, and does
not apply to other forms of property ownership, such as corporations
and limited liability companies. This point reflects the lack of
consistency that the rule of perpetuity comes in with when placed in
application with codified laws of the country.
3. Economic impact: Critics argue that the rule against perpetuity can
have a negative impact on the economy by restricting the use of
property and hindering the efficient allocation of resources. This
argument favours flexibility when it comes to the application of this
rule.
4. Unclear and inconsistent application: Critics argue that the rule
against perpetuity is applied inconsistently and that its application can
be difficult to predict. This can create uncertainty and confusion for
property owners and users, and can lead to disputes and legal
challenges.
5. Unnatural perpetuities: The rule against perpetuity is often criticised
for its narrow definition of what constitutes an “unnatural” perpetuity.
Some argue that the rule should be updated to reflect modern realities
and changing societal needs, and to prevent the creation of perpetual
interests that are deemed “unnatural.”
6. Lack of clarity: Critics argue that the rule against perpetuity is not
always clear and easy to understand, which can lead to confusion and
disputes. This can make it difficult for property owners and users to
determine what types of interests are permitted under the rule and
what types are not.
 7. Unintended consequences: Critics argue that the rule against
perpetuity can have unintended consequences, such as the loss of
property rights and the restriction of property use. In some cases, the
rule can prevent the transfer of property to future generations or limit
the ability of property owners to use their property as they see fit.
8. Inefficient use of resources: Critics argue that the rule against
perpetuity can restrict the efficient use of resources and hinder
economic growth. By limiting the transfer of property interests, the rule
can prevent the development of new businesses and limit investment
in real estate and other assets.
9. Conflicts with other legal principles: Critics argue that the rule
against perpetuity can sometimes conflict with other legal principles,
such as the right to property, the right to transfer property, the right to
freely use and dispose of property. This can create legal uncertainty
and lead to disputes between property owners and users.

Rule against perpetuity in India

In India Section 14 of The Transfer of Property Act,1882 says about the Rule
against Perpetuity. This section reads as :- No transfer of property can
operate to create an interest which is to take effect after the life-time of one
or more persons living at the date of such transfer, and the minority of some
person who shall be in existence at the expiration of that period, and to
whom, if he attains full age, the interest created is to belong.

The rule against perpetuity applies to both wills and deeds, but there are
some differences in how it is applied to each.

1. Wills: The rule against perpetuity applies to the transfer of property

through a will. A will must be executed and take effect during the
lifetime of the testator (the person making the will) or, if the testator is
dead, within a specified period of time after their death. If the will
creates a perpetuity that exceeds the maximum permissible period, it
is considered void under the rule against perpetuity.
2. Deeds: The rule against perpetuity applies to the transfer of property
through a deed. A deed is a written instrument that conveys ownership
of property from one person to another. The rule against perpetuity
applies to the transfer of property through a deed in the same way as it
 applies to a will, but with some important differences. For example, a
deed may be executed at any time, and the grantor (the person
conveying the property) does not need to be alive at the time of
execution.
Both wills and deeds are subject to the rule against perpetuity, but the
manner in which the rule is applied to each can differ depending on the
specific circumstances and the jurisdiction in which the property is located.
In general, the rule against perpetuity serves to prevent the creation of
interests in property that last for an indefinite or excessive period of time,
and to ensure that property is used and transferred in an efficient and fair
manner.

Important Indian judgments on rule against perpetuity

Some important judgments of Hon’ble Supreme Court of India for the rule
against perpetuity have been discussed hereunder:

1. Rambaran Prosad vs Ram Mohit Hazra & Ors (1967): In this case, there
was a Pre-emption-Agreement between parties to give to each other
the right of preemption. The issue in this case was whether such
agreement binds successors-in-interest thereby offending the rule
against perpetuity, or not. The Apex Court had opined that the rule
against perpetuity does not apply to personal contracts which do not
create interest in property.
2. R. Kempraj vs. M/S Burton son & Co (1970): In this case the lease was
created for 10 years with a clause of renewal on the same terms .
When in 1961 the first period of ten years was about to expire the
lessee asked for a renewal of the lease. On the lesser refusing to do so,
the lessee filed a suit for specific performance. The suit came before
the Supreme Court with issue as to “whether a clause for renewal of
lease can be regarded as creating an interest in property, and thus hit
by the rule against perpetuity and thus is void”. It was held that the
rule against perpetuity contained in Section 14 of the Act of 1882
would not be applicable as no interest in property had been created of
the nature contemplated in the provision. In simple words the rule of
perpetuity does not apply to contracts for perpetual renewal of leases.
These cases demonstrate the application of the rule against perpetuity in
India and highlight the important role that the rule plays in ensuring the
efficient and fair use of property in the country.

India-specific criticisms of rule against perpetuity

1. Economic impact: Critics argue that the rule against perpetuity can
have a negative impact on the Indian economy by restricting the use of
property and hindering the efficient allocation of resources. Some
argue that the rule should be relaxed or modified to allow for greater
flexibility in the use of property.
2. Conflicts with other legal principles: Critics argue that the rule
against perpetuity can sometimes conflict with other legal principles,
such as the right to property, the right to transfer property, and the
right to freely use and dispose of property in India.
Despite these criticisms, the rule against perpetuity remains an important
legal principle in India and continues to play an important role in regulating
the use and transfer of property interests in the country. While the rule may
require modification or clarification in some cases, it remains an important
means of promoting the efficient and fair use of property and protecting the
rights of future generations in India.

Rule against perpetuity and the United States and the

United Kingdom
In the United States, the rule against perpetuity is generally governed by
state law, and the specifics of the rule can vary from state to state. However,
the basic principle is that an interest in property cannot be tied up for an
indefinite or unreasonable period of time. For example, in some states the
rule against perpetuity may limit the length of time for which an interest in
property can be granted to a life in being plus 21 years.

In the United Kingdom, the rule against perpetuities is enshrined in

the Statute of Uses (1536) and the Perpetuities and Accumulations Act 1964.
Under the rule, a property interest must vest within a specified time frame,
known as the perpetuity period. In the UK, the perpetuity period is generally
21 years after the death of the last person mentioned in the will or trust
instrument, although there are some exceptions to this. The purpose of the
rule against perpetuities in the UK is to prevent property interests from being
tied up in perpetuity, thus allowing them to be used and enjoyed in a
reasonable manner.

Suggestions to overcome the defects in rule against

perpetuity
Few possible solutions to the criticisms of the rule against perpetuity:

1. Clarification and modernization of the rule: To address the lack of

clarity and the inflexibility of the rule, some advocate for a clarification
and modernization of the rule to better reflect changing societal needs
and realities. This could involve updating the definition of what
constitutes an “unnatural” perpetuity, and providing greater flexibility
for the transfer of property interests in certain circumstances.
2. Alternative approaches: Some advocate for alternative approaches
to the rule against perpetuity, such as the creation of trusts or the use
of other legal instruments that allow for the transfer of property
interests over a longer period of time while still protecting the rights of
future generations.
3. Harmonisation of laws across jurisdictions: Critics argue that the
rule against perpetuity can be inconsistent and vary between
jurisdictions, leading to confusion and disputes. To address this issue,
some advocate for the harmonisation of laws across jurisdictions to
ensure a consistent and clear application of the rule.
4. Better education and outreach: Critics argue that the rule against
perpetuity is not well understood by property owners and users,
leading to confusion and disputes. To address this issue, some
advocate for better education and outreach efforts to increase
awareness and understanding of the rule and its implications.
5. Making online directory of each and every property and linking them to
Aadhar and Pan card and also linking to death certificate portal and
automatic transfer of property to the next person in will or deed. This
will help the rule against perpetuity to get a steroid effect.

Conclusion
Despite these criticisms, the rule against perpetuity remains an important
legal principle in India and the world and continues to play an important role
in regulating the use and transfer of property interests in the country. While
the rule may require modification or clarification in some cases, it remains an
important means of promoting the efficient and fair use of property and
protecting the rights of future generations in India and the world.

Rule of acceleration

Doctrine Of Acceleration
Acceleration basically means a shortening of time until some event takes
place . Doctrine of Acceleration basically talks about conditional transfer to
at least one person including transfer to a different person with a
condition ,as per Sec 27 of Transfer of Property Act , conditional transfer to
one person coupled with transfer to another on failure of prior disposition ,
the ulterior disposition shall become on failure of prior disposition ( Ismail
Haji v. Umar Abdulla )1

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

one person and by the same transaction an ulterior disposition of the same
interest is made in favour of another , if the prior disposition under the
transfer shall fail , the ulterior disposition shall take effect upon the failure of
prior disposition , although the failure may not have occurred within the
manner contemplated by the transferor.

But, where the intention of the parties to the transaction is that the ulterior
disposition shall become only within the event of the prior disposition failing
during a particular manner , the ulterior disposition shall not become unless
the prior disposition fails therein manner .�2

A person having the proper right to require possession of property at some

future time may have that right accelerated if this holder loses his or her
right to the property is basically what doctrine of acceleration talks about .

If a life estate fails for any reason, the remainder is accelerated as the life
interest that fails or ends earlier accelerating the interest of the remainder
beneficiaries who then take their interest at that earlier time instead of on
the death of the tenant for all times . . Also , under doctrine of acceleration
the ultimate beneficiary will get property because of mediator�s death ,
fault etc.

The effect of prior interest� is to accelerate the next which are limited to
require effect on the regular determination of that prior interest;3 the court
construes the gist of such interest as intended to require effect on the failure
or determination of prior interest in any manner4
Also it depicts a situation where if two interests are created in same
transaction and prior interest fails for some reason , not contemplated or
reasonably foreseen by transferors then , subsequent interest will take
place .

For example:

1. A agreed to transfer his property to B. If B meet certain conditions if he

did not do so then the property are going to be transferred to C.
2. A disposition favoured to C will be effective where a transfer of Rs
12000 is done by A to B on condition that the lease will be executed by
B after A's death after 3 months

Applicability Of Section 27 Of The Transfer Of Property

Act, 1882
Section 27 (doctrine of acceleration) (conditional transfer to one person
coupled with transfer to another on failure of prior disposition) and Sec
16( that if the prior transfer fails due to violation of sections 13 and 14, then
a transfer that was to take effect upon the prior transfer would also fail.) of
the same Act have contrasting viewpoint.

Similarly, if the prior interest fails under section 25, then also, the
subsequent interest fails. In this condition the failure of prior transfer should
be taken into consideration as the failure is not done here due to the
violation of section 13 or section 14. Thus , if the prior transfer fails for a
reason that was not contemplated by the transfer or could not have been
foreseen by him, then the subsequent transfer would take effect.

Therefore, it is only when the prior interest is perfectly valid to begin with
and its failure is not due to its conflict with the legal provisions but due to
some reasons that happen actually subsequent to the transfer and could not
have reasonably been foreseen by the transferor initially, that the
subsequent transfer would be valid. Therefore as per doctrine of acceleration
, subsequent interest would be accelerated as a consequence if prior transfer
fails.

Similarly, in Radha Prasad v Rani Mani 5, a Hindu man made a gift to a

boy who was intended to be adopted by his wife and provided that if the
adoption could not be completed and he died without any son, the property
was to go to his daughters. The immediate effect was given to the daughter's
gifts as the power of adoption with W was not valid

Relation With Other Legislations

There are several other legislations related to the Transfer of Property Act ,
1882 like Registration Act , 1908 , Easements Act 1882 and many other .

With respect to Doctrine of Acceleration , Transfer of Property Act , 1882 and

The Indian Succession Act 1925 , both are interlinked as under the latter
Act ,Section 129 of the Indian Succession Act, 1925, provides for the rule of
acceleration just in case of bequests.

�Bequest to A and on failure of prior bequest to B6.�Where there's a gift to

at least one person and a gift of an equivalent thing to a different , if the
prior bequest shall fail, the second bequest shall take effect upon the failure
of the prior bequest although the failure may not have occurred in the
manner contemplated by the testator."

For example:

1. A bequeaths a sum of money to his own children surviving him, and, if

they all die under 18, to B. A dies without having ever had a child. The
bequest to B takes effect.

When the prior bequest fails either because the one in whose favour it
was, dies, and is therefore unable to take it, or if it was a conditional
bequest in favour of a person who is not able to fulfil the condition .
Thus in such cases of bequest subsequent beneficiary takes effect

In Govindraju v Mangalam Pillai 7, A bequeathed his property to B

and C. The direction under the desire stipulated that his property was
to be sold and therefore the sale proceeds were to be equally divided
 between B and C. It further provided that if B or C died during A's
lifetime or before the estate could be so divided, leaving any issue, the
issue would take the property. both B and C took a vested interest
after the death of A.

The condition for divesting was: if any one of them died before the
division and distribution of the property, their respective share was to
vest in their lawful issue. C died five months after A and before the sale
and distribution of property might be materialised. It was held that he
was divested of the share and the same vested in his issue.

Case Laws Related To Doctrine Of Acceleration:

i. In the case of Ajudhia v. Rakhman Kaur 8, in this case , A wanted to

give B (his wife) a property as gift but where it was to be registed as
per the local act the property cant be transferred to his wife thus
ultimately transfer went to his children C thus here ultimate
beneficiary got the interest ,the property was accelerated to the
children as a gift and in this case the doctrine of acceleration was
upheld

ii. In lull v/s Jones, A made a bequest to B for life and then to his
children. As one of the attestors gift was being failed to B Held,
consistent with acceleration, the gift to B failed but, took effect in
favour of the youngsters.

iii. Avelyn v/s Ward: Rs 5000 was transferred by A to B with condition

that certain lease should be executed within 3 days after the death of
A .The transfer will go to C if neglected The death of B occurred while A
was alive . C got the effect of disposition.

iv. Underwood v/s Wing 9: A property was transferred to w , wife by A ,

the property will be transferred to B if she dies during lifetime. During
an air crash both W and A died . It is uncertain who died first whether
W or A. The transfer to B will not take effect. A sum of money was
bequested by A for his children for their survival . Bequest will go to B
if the death occurs before him A dies without issues. Thus the court
held that the bequest to B will take effect as per the doctrine of
acceleration.
Exceptions:

1. The first exception comes into play where the prior interest is void. The
ulterior interest dependent upon it also fails.
2. Also, doctrine of acceleration is not applicable unless the first transfer
fails in a particular specified manner only.
3. Doctrine of Acceleration not applicable if the remainder is not a vested
remainder but is contingent on an uncertain event (Devalakshmi v/s
Vishvakanth P) 10

Conclusion
Transfer of property is basically referred to as an act by which an individual
conveys the property to at least one or more persons, or himself and one or
more other persons as per the Transfer of Property Act 1882 . The act of
transfer could also be wiped out this or for the longer term. The person may
include a private, company or association or body of people and any quite
property could also be transferred, including the transfer of immovable
property.

One of the important doctrine under this act is Doctrine of Acceleration

which can be referred as an English doctrine described as a rule of
constructive based on condition and prior transfer.

When interest ,in order to require immediate effect after a premature

determination of the prior interest then an interest in remainder are
interpretated liberally with respect to limitation of property.

Doctrine of Acceleration can be referred as subset of Conditional Transfer

which talks about conditional transfer to one person coupled with transfer to
another on failure of prior disposition.