Annotation
It is basic rule ofTransfer of Propertythat one must enjoy the property absolutely during his lifetime. One cannot be deprivedof his right of enjoyment in respect of the property as he like in his lifetime. The policy of the law has been to prevent property from being tied up forever. Perpetuity is an interest, which will not vest tilla remote period. One cannot postpone the vesting of the property in the transferee beyond a certain limit. The period for which vesting may be lawfully postponed is called : "perpetuity period".

Abstract
The rule against perpetuities limits the duration of certain restrictions on the use and transfer of property. The Rule is to the effect that no legal interest in property is valid unless it is certain, at the time when the disposition (e.g., a trust) takes effect, that the interest must vest within a life or lives in being plus twenty-one years. In other words, property may not be tied up in trust, subject to restricted use, or otherwise held subject to any contingency, for longer than twenty-one years after the death of a person who is alive at the time of the disposition and identifiable by the terms of the instrument of disposition. The Rule applies to all sorts of property interests - e.g., options to purchase, conditional easements, remainder estates, etc. - but today arises most commonly in connection with trusts.

The Rule is generally understood to serve the purpose of balancing the rights of property owners to impose conditions on the use and exchange of their property with the importance of having property under the control of living persons, so that it may be put to its best contemporary use. The common complaint is that the Rule is simply too complex and abstract in its application, resulting in a substantial risk that beneficiaries or grantees will be deprived of their interests through inadvertent errors in drafting. In the estate planning context, a great number of vesting conditions may offend the Rule, most often unintentionally, and often only hypothetically in any event. The consequence of a breach is very real, however; the intended gift or transfer will generally be entirely invalid.

This report firmly evaluates an established general examination of the Rule against perpetuity as it currently correlates to the law of property and attempts to make considerable recommendations that consider policy issues underlying this rule.

The rule against perpetuities is a legal rule which limits the duration of certain restrictions on the transfer of property. By various means of estate planning - particularly trusts - and other forms of property disposition, a settler or testator or grantor may postpone the time when property may be possessed and used freely by a beneficiary or grantee. The Rule insists that such inheritances - and indeed, many other sorts of postponed, restricted or contingent transfers of property - can only be postponed for so long. At some definite point the property must be fully transferred to its beneficial owner, free of restrictions. A transfer of property subject to a delay, restriction or contingency that might result in the full transfer occurring later than the allowable perpetuities period is void from the beginning. The postponed, restricted or contingent transfer simply fails at the outset, and the property will be received by someone other than the intended recipient, as though the offending transfer had not been made at all.

The common law rule against perpetuities is to the effect that no legal interest in property is valid unless it is certain, at the time when the disposition (e.g., a trust) takes effect, that the interest must vest within a life or lives in being plus twenty-one years.

In other words, property may not be tied up in trust, subject to restricted use, or otherwise held subject to any contingency, for longer than twenty-one years after the death of a person who is alive at the time of the disposition and identifiable by the terms of the instrument of disposition. If there is no such identifiable life or lives in being, the period is twenty-one years from the disposition.

The Rule applies to all sorts of contingent future interest in property, real or personal, whether by trust, power, estate, option to purchase, easement or otherwise. In the typical scenario of a will, which may gift certain property to be held in trust until the happening of a certain event, it must be certain that the property will absolutely vest in the entitled person or persons before twenty-one years has passed since the death of a person who is identifiable by the terms of the will, and who was alive at the time of the testator's death. If not, with limited exceptions, the entire gift is declared invalid.

2.1 Definition of Rule against perpetuity
The classic statement of the Rule iterates that - "No interest is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest." 1
The Rule operates against remoteness of vesting of interests, i.e., against contingent interests where the removal of the contingency could occur beyond the period set forth in the Rule. Such interests are void from the outset. Central to the application of the Rule is its focus on whether it is possible the interest could fail to vest within the stated time. The Rule is not stated in terms of either probabilities or actualities. That it is probable, but not certain, the interest will vest in time, is irrelevant. Nor does it matter that at the time an interest is challenged it has in fact vested, if at the time the instrument takes effect it is possible that it could have remained contingent longer than the "twenty-one years after some life in being at the creation of the interest."

Interests Subject to the Rule
The Rule against Perpetuities is the most important restriction on the power of a present holder of property to create future interests in that property. The range of the Rule is wide: It applies to both real and personal property, to both legal and equitable. The interests to which the Rule is most commonly applied are contingent remainders and executory interests.

The Rule also applies to interests which are not normally regarded as "future interests." For example, in most states it applies to options to purchase property when the optionee has no other interest in the land, a fact that a number of recent draftsmen seem to have forgotten.

The Period of the Rule –
"Lives in Being"
The Rule requires proof that an interest must vest within 21 years after some "life in being," i.e., a natural person living when the interest is created. Corporations, for obvious reasons, may not be used. You must then be able to point to a living person about whom you can say that the interest must vest within 21 years of that person's death. This is the so-called "measuring life" (sometimes referred to as the "validating life"). If no such person can be identified, the interest is invalid.2

"Plus Twenty-one Years"
It is settled that the twenty-one year period is a period in gross and need not be the minority of any actual person, much less of a beneficiary.3

Periods of Gestation
The gestation of an actual child (as opposed to a nine-month term in gross) may extend the period of the Rule at the beginning of "lives in being," at the end of "lives in being" and at the end of the twenty-one year period.

"Vesting" Under the Rule
An interest is vested under the Rule when any conditions precedent (including ascertaining the taker or takers) are satisfied. Thus a remainder which is vested at the outset always satisfies the Rule (and is therefore often said to be "not subject" to it).

A remainder may become vested even though it has not become a present possessory interest. On the other hand, when does an executory interest is vested? Since executory interests were indestructible, and thus the contingent-vested distinction was not made with respect to such interests. It was eventually decided that executory interests would not be considered to have "vested" for the purposes of the Rule until they became present possessory interests.

2.2 Rule against perpetuity in the transfer of property act
Section 13 of TOPA provides that:
"Where, on a transfer of property, an interest therein is created for the benefit of a person not in existence at the date of the transfer, subject to a prior interest created by the same transfer, the interest created for the benefit of such person shall not take effect, unless it extends to the whole of the remaining interest of the transferor in the property."
Section 14 of TOPA provides that:

"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."

Analysis of the provisions
# Section 13 and 14 of the TOPA go hand in hand, in as much as, section 13 and 14 are to be read together in order to understand the provisions governing the Rules.
# The TOPA does not permit transfer of property directlyin favour ofan unborn person. Thus, in order to transfer a property for the benefit of a person unbornon the date of the transfer, it is imperative that the property must first be transferred in favour of some other personliving on the date of transfer. In other words, the property must vest in some person between the date of the transfer and the coming into existence of the unborn person since property cannot be transferred directly in favour of an unborn person. In other words, the interest of the unborn person must, in every case, be preceded by a prior interest.
# Further, where an interest is created in favour of an unborn person on a transfer of property, such interest in favour of the unborn person shall take effect only if it extends to the whole of the remaining interest of the transferor in the property, thereby making it impossible to confer an estate for life on an unborn person. In other words, the interest in favour of the unborn person shall constitute the entire remaining interest. The underlying principle in section 13 is that a person disposing of property to another shall not fetter the free disposition of that property in the hands of more than one generation.

# Section 13 doesnotprohibit successive interests (limited by time or otherwise) being created in favour of several personslivingat the time of the transfer. What is prohibited under section 13 is the grant of interest, limited by time or otherwise, to an unborn person.

# Further, Section 14 of TOPA provides that where an interest is created for the benefit of an unborn person (in accordance with the provisions of section 13), such interest shall not take effect if the interest is to vest in such unborn personafterthe life time of one or more persons living on the date of the transfer (i.e. the person in whose favour the prior interest is created as required under section 13)and the minority of such unborn person. In otherwords, the interest created for the benefit of an unborn person shall take effect only if the interest is to vest in such unborn person before he attains the age of eighteen years.

# Section 14 further provides that the unborn person, in whose favour the interest is created, must have come into existence on or before the expiry of the life or lives of the person(s) in whose favour the prior interest is created as required under section 13.

# The effect of these Rules is that a transfer/ gift can be made to an unborn person subject to the following conditions:
1. that the transfer/ gift shall be of the whole of the remaining interest of the transferor/ testator in the thing transferred/ bequeathed and not of a limited interest; and
2. that the vesting is not postponed beyond the life in being and the minority of the unborn person.

In simple terms, while section 13 of TOPA lays down the mechanism for transfer of property for the benefit of unborn person and"what property"is required to be ultimately transferred in favour of an unborn person in order to validate such transfer, section 14 of TOPA provides the" maximum period as to when"such property can be vested upon such unborn person.

Section 14 of TOPA supplements section 13 of TOPA and thus, it is pertinent to note that when an interest in any property is intended to be transferred in favour of an unborn person, sections 13 and 14 of TOPA are required to be read together and the provisions contained there under are required to be duly complied with, in order to give effect to the intended transfer in favour of such unborn person.

2.4 Rationale behind the imposition of such rule
The general rule is that disfavour perpetuity and it is based on the following grounds:
Jurisprudential aspect - Sir D. Mulla "Liberty of alienation shall not be exercised or used for its own destruction. This is because if the owner having inherent power to transfer the property uses the right to the extreme and he thereby destructs the further right of alienation of future transferee.

Social aspect - If perpetuities are allowed the property which is the subject matter of the transfer will become ex-commercial, for example put out of Commerce. Though the transferee receives the property, he has no power to alienate it .

Logical aspect - Sir D. Mulla , "It is illogical to imagine at dead person below his Grave controlling properties above his grave".
If the property is taken away from the free and active circulation for the purposes of commerce and improvement, it will fall to decay and the property becomes inalienable (non- transferable). Therefore, to save the property from decay, non use, being looked up, this rule is enacted in the larger interest and on public policy.

Origin of Rule Against Perpetuity
The rule as regards the transfer of property for the benefit of unborn person and the rule against perpetuity (collectively, the "Rules"), which are mainly governed by sections 13 and 14, respectively, of the Transfer of Property Act, 1882 ("TOPA"), have, since decades, troubled lawyers of all ages across the country. These Rules are often described as one of the most complicated legal rules ever.

Where property is desired to be transferred/ bequeathed by any person, to more generations than one, it is imperative that these Rules are conformed to.

Though the courts have long had an interest in limiting the restrictions that may be imposed on the free use and exchange of property, the Rule in its modern form derives from the late seventeenth century, in the Duke of Norfolk's case4. The classic statement of the rule in that case is Gray's: "No interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of the instrument."

An older version of the Rule, which came to be known as the rule in Whitby v Mitchell5 that no gift may be made to the unborn child of an unborn person - may be considered a variation on the general theme and is now generally subsumed within the Rule as stated in Duke of Norfolk's case.

Indeed, the Rule arose in its present, general form largely because of the continuing efforts of wealthy landowners to control the future use of their land - in effect to create or continue so-called ‘family estates' against the potential imprudence of future offspring. As a succession of specific legal and equitable strategies were undone by legislation and the courts, new ones arose.

The origin of rule against perpetuity stems from the days of feudal England as far back as in 1682 from the case of Duke of Norfolk's, wherein, Henry (the 22nd Earl of Arundel), tried to create a shifting executory limitation in a way that one of his titles would pass to his eldest son (who was mentally deficient) and thereafter to his second son, and another title would pass to his second son and thereafter, to his fourth son. The estate plan also included provisions for shifting the titles many generations later, if certain conditions were to occur. It was held by the House of Lords that such a shifting condition could not exist indefinitely and that the tying up of property too long beyond the lives of people living at the time was wrong. The concept of trying to control the use and disposition of property beyond the grave was often referred to as control by the "dead hand". The rule against perpetuity, in England, was later codified in the form of the Perpetuities and Accumulations Act, 1964.

Ingredients constitutingRule against perpetuity
Following conditions must be satisfied to attract Section 14:
1. There must be a transfer of property.
2. The transfer should be to create an interest in favour of an unborn person.
3. Interest created must take effect after the lifetime of one or more persons living at the date of such a transfer and during the minority of the unborn person.
4. The unborn person must be in existence at the expiration of the interest of the living persons.
5. The vesting of the interest in favour of the ultimate beneficiary may be postponed only up to the life or lives of living persons plus the minority of the ultimate beneficiary but not beyond that.

Section 14 can be summarized thus:
1. You cannot perpetually create life interests OR there cannot be life interest after life interest perpetually.
2. After the last life interest property must rest in someone and it (resting) cannot be perpetually delayed.
3. Ultimate legatee must come in existence (either by birth, conception or adoption) when the life interest comes to an end.
4. On attaining "full age", the ultimate legatee must become the full owner vesting of property in him and it should be no more delayed, otherwise it will become void.
5. The Bequest will not be valid, if vesting of property is delayed beyond the use time of one or more persons living at the time of Testator's death and the minority of same person.
6. Perpetuity is a device tending to take the property out of commerce, for a longer period than a life (lives) (18 years and beyond).
7. Its distribution is made between charitable and non charitable objects (property). Although, it is true that charitable or religious trusts are made in perpetuity but they are not within the scope of Section 114 provided that vesting is not beyond the statutory period.
8. Section 114 of the Indian Succession Act corresponds to section 14 of the Transfer of Property Act, 1882 and it differs from the English law on the subject.
9. It is the settlement of an interest descendible from heir to heir so that it shall not be in the power of him in whom it is vested to dispose if off.

Purpose of the Rule against perpetuity
The purpose of the Rule has shifted somewhat, and cannot simply be attributed to the need to limit the duration of restrictions on the free use and exchange of property. The purpose of the Rule as it is now understood is to balance the law's general concern to respect the intentions of property owners, on one hand, with the competing concern to ensure that living persons may freely use and enjoy the property they possess. The rule has two central purposes.

The first is to bring about the availability of land, and possibly some forms of personality, within regular and sufficiently frequent periods of time.

The second is to strike a fair balance between the desires of present absolute owners to regulate beyond their own mortality the enjoyment of their property in the years to come, and the wishes of those living tomorrow to have the same, or at least effective control over the enjoyment of property which they have inherited. It is the second of these two purposes which has probably the widest acceptance in terms of why we have, and need, the rule today, though both are forcefully argued to be relevant to today's scene.

"The liberty to make fresh rearrangements of assets is necessary not only in order to be rid of irksome conditions attached by earlier donors to the enjoyment of income but also in order to be able to manoeuvre in the light of new tax laws, changes in the nature of the property and in the personal circumstances of the beneficiaries, unforeseeable by the best intentioned and most perspicacious of donors."

Concluding, it is important to ensure free and active circulation of property both for trade and commerce as well as for the betterment of the property that ultimately is good for the society. Thus, the object of section 14 of TOPA is to see that the property is not tied- up and to prevent creation of perpetuity.

Exceptions to the Rule against perpetuity
The Rule is also marked by a series of exceptions that depend in many cases on very subtle distinctions in language; e.g., the distinction between conditions subsequent (bound by the Rule) and determinable fees (not bound). These aspects of the Rule lead to a series of traps for the drafter of a postponed, restricted or conditional property transfer. Only with a complete grasp of the Rule, including all of its exceptions and partial exceptions, and a thorough canvasing of all remote and unlikely possibilities of lifespan and life events of all possible ‘lives in being' and their offspring, can the drafter have confidence that perpetuities problems have been avoided.

Following are the nine exceptions to the rule against perpetuity:
1) Vested interest is not affected by the rule because once the interest are vested it cannot be bad for remoteness.
2) The rule is not applicable to land purchased or held by Corporation.
3) Gift to charities, the rule does not apply to transfer for the benefit of public for religious, pious, or charitable purposes.
4) Properties settled upon individuals for memorable Public Service.
5) The rule against perpetuity does not apply to Personal agreement, for example, agreement which do not create any interest in the property.
6) A covenant of redemption in mortgage does not affect by the rules the rule.
7) The does not apply to contacts for Perpetual renewal of lease.
8) The rule also does not apply where only charges is created which does not amount to a transfer of an interest.
9) Contract ofpre-emption also not affected by rule against perpetuity.

Pattern of application of this rule
The common complaint is that the Rule is simply too complex and abstract in its application, resulting in a substantial risk that beneficiaries or grantees will be deprived of their interests through inadvertent errors in drafting. In the estate planning context, a great number of vesting conditions may offend the Rule, most often unintentionally, and often only hypothetically in any event. The consequence of a breach is very real, however; the intended gift or transfer will generally be entirely invalid.

Perpetuity may arise in two ways-
(a) By taking away the power of alienation from the transferor
(b) By creating a remote interest in the future property.

Acondition restraining the transferee's power of alienation is void as per S.1O of the Act. And a disposition to create a future remote interest is prohibited under S.14 of the Act.

The Rule applies to all sorts of contingent future interest in property, real or personal, whether by trust, power, estate, option to purchase, easement or otherwise. In the typical scenario of a will, which may gift certain property to be held in trust until the happening of a certain event, it must be certain that the property will absolutely vest in the entitled person or persons before twenty-one years has passed since the death of a person who is identifiable by the terms of the will, and who was alive at the time of the testator's death.

In practice, the difficulty arises largely from the Rule's preoccupation with remote hypotheticals. The question of whether a disposition offends the rule is decided at the time that the disposition takes effect (e.g., in the case of a will, upon the death of the testator). At that point, it must be certain that there is no possible contingency upon which the legal interest in the property may not vest within the perpetuity period. Even if it can be anticipated that later events will likely foreclose the possibility of the interest failing to vest, the gift will nonetheless be invalid at the outset. In order to be certain, at the time when the disposition is effective, that the interests it creates are valid, all contingencies possible as of that time must be canvassed. If one of them results in an interest vesting beyond the perpetuity period, or not at all, the disposition is void at the outset.

Given these difficulties, the Rule has been subject to significant reform in most jurisdictions. The most common sort of reform - referred to generally as ‘wait and see' - maintains the substance of the Rule, but allows the disposition to run its course for the perpetuity period, rather than declaring it to be invalid at the outset.

Some important case laws which explain the application of this rule are as follows:
1) Anand Rao Vinayak Vs Administrator general of Bombay, 1896 6
In this case Bombay High Court declared that thegiftvoid as offering against perpetuity when a gift was made of movable property to a son with gift of shares in the property to son's sons son when they should attend the age of 21.

2) Abdul fata Mahomed VS Rasamaya, 18947
The privy Council held thar agiftto an Unborn generations is Forbidden by Mohammedan law except in the case of Wakf.

3) Rambaran vs Ram Mohit AIR 1967 S.C. 744 8
Supreme Court held that the rule against perpetuity does not apply to Personal agreements, for example....agreements which do not create an interest in the property.

Retrospectivity of this rule
It is a well established fact that one gains and another loses whenever rules change. But we take the starting point to be that property owners should have the right to dispose of their property as they see fit, subject only to such limits as are justified by public policy reasons. With that as a given, it is fair to say that rather than confiscating a pre-existing entitlement, retrospective abolition in this case only preserves an entitlement which would otherwise be wiped out by operation of law.

To the question of whether prospective application would be a better solution than retrospectively with a saving clause, the Irish Commission answered succinctly:
"It seems to us that the greater justice lies in applying the change of law retrospectively. The choice seems to be between, on the one hand, honouring the settler's intention and allowing the beneficiary (on whom s/he was intended to bestow the gift; and on the other hand, fulfilling, at most, the expectation of a windfall, which, on the basis of a law which to most lay people and many lawyers would seem antiquated and irrational) entertained. We prefer the first alternative."

If the unvested interest is objectionable or working some hardship let it be dealt with as such, under the variation powers we have proposed, or the other rules the courts have developed to deal with such circumstances. If a party has taken an interest, or acted to her detriment in reliance on invalidity under the Rule, then the invalidity must stand. Otherwise, there ought not to be a magic date upon which the saving of a transferor's manifest intention from an obscure, complex and arbitrary rule ought to be effective. For discussion purposes we therefore propose retrospective abolition, subject to saving provisions for interests vested in possession as of the effective date of the legislation, as well as judicial decisions and acts taken in reliance on the Rule - such as a purchase for value in reliance on a solicitor's opinion as to the invalidity of some interest or other - prior to the coming into force of the legislation.

Concluding remarks
The rule against perpetuities limits the duration of certain restrictions on the use and transfer of property. The Rule is to the effect that no legal interest in property is valid unless it is certain, at the time when the disposition (e.g., a trust) takes effect, that the interest must vest within a life or lives in being plus twenty-one years.

In other words, property may not be tied up in trust, subject to restricted use, or otherwise held subject to any contingency, for longer than twenty-one years after the death of a person who is alive at the time of the disposition and identifiable by the terms of the instrument of disposition. The Rule applies to all sorts of property interests - e.g., options to purchase, conditional easements, remainder estates, etc. - but today arises most commonly in connection with trusts.

In short... the rule against perpetuity provides that vesting cannot be postponed beyond the lifetime of anyone or more persons living at thedate of transfer. The basis of the rule against perpetuity is that Liberty of alienation shall not be exercised to its own destruction. The rule of perpetuity is not absolute but it has certain exceptions.

End Notes
# Cadell v. Palmer (1833) 7 Bli. N.S. 202
# Fitchie v. Brown (1908) [211 U.S. 321, 322]
# Kolb v. Landes 277 Ill. 440
# Duke of Norfolk's case (1682) 3 Ch. Cas. 1, 22 Eng. Rep. 93
# Whitby v Mitchell 607 F2d 1003
# Anand Rao Vinayak Vs Administrator general of Bombay (1896) ILR 20 BOM 450
# Abdul fata Mahomed VS Rasamaya (1895) ILR 22 CAL 619
# Rambaran vs Ram Mohit AIR 1967 SC 744

TABLE OF CASES
# Abdul fata Mahomed VS Rasamaya (1895) ILR 22 CAL 619
# Anand Rao Vinayak Vs Administrator general of Bombay (1896) ILR 20 BOM 450
# Cadell v. Palmer (1833) 7 Bli. N.S. 202
# Duke of Norfolk's case (1682) 3 Ch. Cas. 1, 22 Eng. Rep. 93
# Fitchie v. Brown (1908) [211 U.S. 321, 322]
# Kolb v. Landes 277 Ill. 440
# Rambaran vs Ram Mohit AIR 1967 SC 744
# Whitby v Mitchell 607 F2d 1003

Bibliography
# Dr. Avtar Singh, "The Transfer of Property Act", Universal Law Publishing, 2009 [2nd Edn.]
# Law Reform Commission of Nova Scotia, "The Rule against Perpetuities – A Discussion paper", July 2010, pg. 9 – 15.
# Rich Klarman, "The Rule Against Perpetuities – Demystified", 2007
# Professor Marcilynn A. Burke, "The Rule Against Perpetuities: A Rule of Proof", University Of Houston, 2013