VESTED INTEREST U/S 19 AND CONTIGENT INTEREST U/S 21
OF TRANSFER OF PROPERTY ACT, 1882
-BY SURYAVRAT DUBEY
Vested means to ‘invest in’ and contigent means ‘ unconfirmed’ also interest means ‘curiosity’
Now What Is Vested And Contigent Interest?
According to Sec. 19 of Transfer of Property Act 1882 Vested Interest Is , 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. A vested interest is not defeated by the death of the transferee before he obtains possession. Explanation.—An intention that an interest shall not be vested is not to be inferred merely from a provision whereby the enjoyment thereof is postponed, or whereby a prior interest in the same property is given or reserved to some other person, or whereby income arising from the property is directed to be accumulated until the time of enjoyment arrives, or from a provision that if a particular event shall happen the interest shall pass to another person.
But According To Me , Vested Interest is that type of interest where tranferre get his property imidietly or in future or if death caused , ther property will get their Heirs.
Illustration : X, the father of Y agrees to transfer an ancestral property in favour of Y after his death. The interest in the ancestral property in favour of Y is dependent on the condition of the death of his father X, which is certain. Hence on the death of X, Y will have vested interest in the ancestral property..
Characteristics of Vested Interest
The three main characteristics of vested interest is as follows-
1. Vested interest does not depend on an uncertain event. It depends on a certain event which must happen. It creates a present or immediate right though the right to enjoyment is postponed.
2. Vested interest is not defeated by death. On the death of the transferee, the interest is passed to the heir of such transferee.
3. Vested interest is a transferable right as well as a heritable right.
Sunder Bibi v. Rajendra The court held that A would hold the property till his death and subsequently after his death the property would pass to B. The interest acquired by B in the said property is a vested interest. B would acquire vested interest because the death of A is a condition which is a certain event and is bound to take place.
NOW , Coming On Contigent Interest Defined U/S 21 of Transfer of Property Act 1882 , when interest is created in a property in favour of a person to whom such property is transferred, such interest is dependent on the happening of a specified uncertain event which may or may not take place. Hence the transfer of an interest in a property is dependent on a contingent event. This interest in the property can become vested interest in favour of the person to whom it is transferred on the happening of the event or when the happening of the specified event fails or becomes impossible. The creation of interest of the person’s right to enjoyment, possession or ownership in the property is dependent on happening of a condition which may or may not take place.
A agrees to transfer his house in favour of B on the condition that B should marry his daughter ‘X’. Hence such a transfer of property in favour of B is dependent on the condition of B marrying A’s daughter ‘X’. B may or may not get married to ‘X’. If B gets married to X, the interest in A’s house gets transferred to B immediately on happening of the specified event.
But there is an Exception too : However when a person who has a chance of becoming the owner of a specific property and before the uncertain event takes place, if such a person receives any income arising from such a property, this interest in the property is not a contingent interest. Hence such an interest is an exception under section 21.
Characteristics of Contingent Interest
There are three main characteristics of contingent interest which are as follow-
1. The interest in a specific property transferred will be subject to a condition which is uncertain i.e., it may or may not take place. Only on fulfilment of such a condition will the contingent interest in the property become vested interest in the transferee.
2. If the transferee dies before acquiring the interest in the property, the contingent interest will lapse and the transferor will remain the owner of the property.
3. The contingent interest can be transferred i.e. it is a transferable right. However, if the contingent interest is heritable or not depends on the contingent event and nature of the transaction.
Hence section 19 to 24 of the Transfer of Property Act 1882 explain the provisions related to vested interest and contingent interest. Such interests are acquired in immovable property in favour of the transferee on the transfer of such property to him. Such transfer of interest might take place immediately or on the occurrence of a specified event.