What do you understand by Intrest? So, in simple words we can say that when property is transferred but possession is not in such cases what is basically transferred is “Intrest”. For example, mortgage is simply the “transfer of intrest”, which we are going to discuss in this article.

Why we needed to study Vested and contingent intrest?

Sometimes, during transfer of property, some conditions and clauses are given which creates confusion about the possession of the property.

Examples of such condition:

  1. Suppose “A” have transferred his property to “B” but he put a clause or we can say condition in the contract that “B” cannot enjoy that property until he attains 18 year of age. And “A” and “B” both died with the possession of property with “A” and their legal heir started claming for that property. In this case the property belongs to the legal heir of “B”. In this case vested intrest is transferred to “B”.
  2. In this example “A” transfers his property to “B” putting a clause or condition in it that it will be transferred to you only when you attain 18 year of age. In this case if “B” died then his heirs have no right in that property. In this case contingent intrest is transferred.


Section 19 of Transfer of Property Act 1882 defines vested intrest. It can take place in 2 stages:

  1. When the transfer is immediate and in present possession of the transferer
  2. When the transferee has acquired an intrest in the property but the possession or we can say right to enjoyment is postponed for some future date.

Vested intrest is when the intrest is transferred in favour of a person without specifying time or specific condition. Such event is bound to happen or we can is certain. In this case the intrest in the property is vest in the person even though his right to enjoyment is postponed.


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 intrest:

  1. It depends on the certain events which must happen. It creates immediate right postponing the right to enjoyment.
  2. It is not defeated by death. On the death of the transferee the possession passed to his heir.
  3. It is a transferable right as well as a heritable right.

Section 20 defines the transfer of property to an unborn child: In this case when transfer of property takes place in the favour of an unborn child, the intrest in such case vest to the child at the time of birth and that child may not be able to enjoy the property immediately but the intrest in the property is transferred immediately.


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.


Section 21 of the Transfer of Property Act 1882, contingent interest is 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.

characteristic of contingent intrest:

  1. It depends on an uncertain event or condition. And the fulfillment of such event or condition it becomes vested intrest.
  2. If transferee dies before fulfillment of such condition it will lapse.
  3. It is transferable but if its heritable or not it depends on the contingent event.


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.

Section 22 states that a contingent interest in a property is transferred to a group or class of persons on the condition that persons who have attained a particular age on a specified date will acquire an interest in the property. Such interest will only be transferred in favour of the people who satisfy the required condition.

For example, an interest in a property is transferred in favour of a group of 10 people. Such a transfer is dependent on the condition that only people who are above the age of 18years as on the date of transfer will have vested interest in the property. Hence all people above the age of 18 years will get an interest in the property and the others will not get an interest in the property.

Section 23 states that when a transfer of an interest in a property is dependent on happening of an uncertain event and the time within which such an event is to take place is not specified. Such a contingent interest fails unless such an event takes place before or at the same time as the intermediate or previous interest ceases to exist.

For example, a property is transferred to X for life as a gift and then to Y if, Y returns from the U.S.A. Whether Y returns from the U.S.A. is a contingency as it may or may not happen and no time is mentioned for his return. Hence if Y returns from the U.S.A. during X’s lifetime then Y must get the property.

Section 24 lays down the transfer of an interest in a property to such persons who are alive at the specified time. For example: “X” transfers property to “Y “for life and after his Y’s death transfer to A, B, C equally between them. “A” dies, during Y’s lifetime. On Y’s death, the interest in the property shall pass to B and C equally.


Therefore, concluding that intrest either invested or contingent is a very important concept in transfer of property. It takes place immediately or on the occurrence of a specified event.


Law student

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