A gift to unborn children is valid if it does not offend Sections 13 or 14 of the Transfer of Property Act and the subsequent interest created in the same transaction does not fail.

KODANDARAMAYYA, J.

( 1 ) THIS appeal is referred by our learned brother Ramaujulu Naidu J. , as it involves interpretation of S. 16 of the Transfer of property Act.

( 2 ) THE facts are not in dispute but only its effect in law. The plaintiff is the appellant in this second appeal. One P. Muthaiah had a son Ganga Raju and executed a settlement deed in respect of the suit property conferring life estate on his son and after his death to the sons of Ganga Raju to be borne absolutely. Ganga Raju in his turn executed a relinquishment deed of his life estate got under Ex. A-3 in favour of his father Muthaiah on 31-8-1934 under Ex. A-4. Ganga Raju died in 1971 leaving behind three sons viz. , rama Rao, lakshmanarao and Muthaiah. The first son Ramarao was born in the year 1942 the plaintiff happened to be the auction purchaser of th one-third share of Muthaiah under a sale certificate Ex. A-1 in a Court auction in execution of the decree. The plaintiff also purchased the share of lakshmanarao from his wife Raghavamma under a registered sale deed dt. 24-2-1972 as per Ex. A-2 and he filed the present suit for the recovery of this two- thirds share. The 1st defendant is the son of Muthaiah who resisted the suit. The other defendants are in possession of the property and the suit is contested by the 1st defendant contending that the relinquishment deed in favour of ganga Raju (sic) executed a relinquishment deed long before the birth of his sons and hence the gift in favour of the unborn sons has failed.

( 3 ) THE courts below held that the settlement deed is true and valid but not a nominal one and ganga raju executed a relinquishment deed before the birth of sons to him and consequently the entire estate has gone out of the original donee and hence the gift in favour of urban children has failed and the present suit is not maintainable and liable to be dismissed.

( 4 ) IT is seen that the result of the suit depends upon the correct interpretation of S. 16 of the Transfer of property Act and hence it is necessary to examine its terms which may be extracted in full. "16. Where by reason of any of the rules contained in Ss. 13 and 14, an interest created for the benefit of a person or of a class of persons fails in regard to such person or the whole of such class, any interest created in the same transaction and intended to take effect after or upon failure of such prior interest also fails". The section embodies the English law that a limitation following upon a limitation void for remoteness is itself void even though it amy not of itself transgress the rule against perpetuity. A reading of the section discloses that three conditions must be present before the said section is attracted. (1) there should be an interest created for the benefit of a person or class of persons which must fail by reason of the rules contained in Ss. 13 and 14. (2) There should be another interest created in the same transaction. (3) The other interest must intend to take effect after or upon failure of the prior interest. A gift made to an unborn person should not offend S. 13 or S. 14 S. 13 requires two conditions to be fulfilled. (1) the transfer inter vivos cannot be made directly to an unborn person but must be preceded by a prior disposition in favour of a living person. (2) the interest given to the unborn person is the whole of the interest remaining in the transferor. S. 14 embodies the rule against perpetuity. So. S. 16 embodies the rule that if any gift made in favour of unborn persons fails by reason of the rule contained in those two sections, the subsequent interest created in the same transaction also fails. So in order to attract S. 16 we must see whether the three conditions mentioned above are fulfilled or not before the principle that the gift is void for remoteness as embodied in the said section can be invoked.

( 5 ) GIRISH Datt. V. Datt Din (AIR 1934 Oudh 35) (FB) furnishes a neat illustration for the principles embodied both in Ss. 13 an

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