Transfer to Take Effect on Failure of Prior Interest

Introduction

Section 16 of the Transfer of Property Act, 1882 deals with situations where a transfer is followed by another transfer that depends on the failure of the first.

It explains that if the prior transfer fails due to violation of legal rules, the subsequent transfer also fails.

Meaning / Definition

This section applies when:

• A prior interest (earlier transfer) is created, and
• A later interest is intended to take effect after failure of the prior interest

Rule:

• If the prior interest fails due to violation of Section 13 (unborn person) or Section 14 (rule against perpetuity),
• Then the subsequent interest also fails.

Modes or Types

Failure Due to Section 13

• Prior interest created in favour of an unborn person in violation of rules.
• Such interest is void.
• Any further interest depending on it also becomes void.

Failure Due to Section 14

• Prior interest violates rule against perpetuity.
• Such interest is void.
• Subsequent dependent interest also fails.

Dependent Nature of Transfer

• The later transfer depends on the validity of the earlier one.
• If the earlier fails, the later cannot exist independently.

Distinction / Comparison

Practical Example

• A transfers property to B for life, then to C (unborn) for life, then to D.
• Interest in favour of C is void under Section 13.
• Since D’s interest depends on C’s interest, D also cannot take the property.
• Both transfers fail after B’s life interest.

Summary

• Section 16 deals with dependent transfers.
• If prior interest fails, subsequent interest also fails.
• Applies when prior transfer violates Sections 13 or 14.
• Later transfer cannot survive independently.
• Ensures consistency in application of legal rules.