Answer :-
Vested interest is defined by section 19
of the Transfer of Property Act .
Section 19 says that 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 .
It is further provided by the section 19
that a vested interest is not defeated by
the death of the transferee before he
obtains possession .
It has been explained by the section 19
that 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 .
The main characteristics of vested
interest are as follows :-
i) Vested interest does not depend
upon the fulfilment of any condition . It
creates an immediate and present right
though the enjoyment may be
postponed to a future date .
ii) Vested interest is not defeated by
the death of the tranaferee before
obtaining possession . If the transferee
dies , his vested interest passes on his
heirs .
iii) Vested interest is heritable and
transferable also .
As for an instance , if X executes a deed
of gift in favour of Z and directs that Z
shall not take over possession of the
gifted property till the death of X and
his wife Y , in that event , Z acquires a
vested interest in the property but the
enjoyment of the property by Z is
postponed . And if Z dies before taking
over possession of the property , his
vested interest will not be defeated but
his heirs will inherit to his vested
interest .
Contingent interest is defined by
section 21 of the Transfer of property
Act . Section 21 says that where , on a
transfer of property , an interest therein
is created in favour of a person to take
effect only on the happening of a
specified uncertain event , or if a
specified uncertain event shall not
happen , such person thereby acquires
a contingent interest in the property .
Such interest becomes a vested
interest , in the former case , on the
happening of the event , in the latter ,
when the happening of the event
becomes impossible .
But there is one exception . Where ,
under a transfer of property, a person
becomes entitled to an interest therein
upon attaining a particular age , and the
transferor also gives to him absolutely
the income to arise from such interest
before he reaches that age , or directs
the income or so much thereof as may
be necessary to be applied for his
benefit , such interest is not
contingent .
The following are the main
characteristics of a contingent interest .
i) When the transferee dies before
obtaining possession , the contingent
interest fails , and the property reverts
to the transferor .
ii) Contingent interest is depended
entirely upon the fulfilment of a
condition . Therefore , in the event of
non-fulfilment of the condition , the
contingent interest fails .
iii) Contingent interest is transferable .
But the question whether it is heritable
or not depends on the nature of the
contingency .
As for example of contingent interest ,
if A sum of money is bequeathed to A ,
in case he shall attain the age of 18 or
when he shall attain the age of 18 . A’s
interest in the legacy is contingent until
the condition is fulfilled by his attaining
that age .
Difference between the vested and
contingent interest may be shown by
the following tabular form .
Vested Interest .
Contingent Interest.
1.
Vested interest is created without
specifying the time when it is to take
effect .
Contingent interest is created to take
effect on the happening of a specified
uncertain event .
2.
In case of vested interest, it is to take
effect forthwith or on the happening of
an event which must happen .
In case of contingent interest , the
specified event may or may not
happen . If the specified event does not
happen the contingent interest fails .
3.
Vested interest is not depended upon
the fulfilment of any condition . It
creates an immediate right in favour of
the transferee though the enjoyment of
the property by the transferee is
postponed .
Contingent interest is entirely depended
upon the fulfilment of the condition .
So , if the condition , which may or may
not happen , is not fulfilled , the interest
is lost .
4.
Vested interest is not defeated by death
of transferee before he obtains
possession . Vested interest is
heritable and transferable .
Contingent interest is also transferable
but whether the contingent interest is
heritable or not is depended on the
nature of the contingency .
5.
In case of a vested interest , if the
transferee , in whose favour the interest
is created , dies before taking
possession of the property the interest
passes on his heirs .
In case of contingent interest , if the
transferee , in whose favour the interest
is created dies before obtaining
possession , the contingent interest
fails and does not pass on his heirs .
6.
In case of vested interest a right with
respect to the property is created
immediately though the enjoyment is
postponed.
But in case of contingent interest there
is a mere promise to give such right of
enjoyment with respect to the property
if the condition is fulfilled .
*****
Vested interest is defined by section 19
of the Transfer of Property Act .
Section 19 says that 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 .
It is further provided by the section 19
that a vested interest is not defeated by
the death of the transferee before he
obtains possession .
It has been explained by the section 19
that 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 .
The main characteristics of vested
interest are as follows :-
i) Vested interest does not depend
upon the fulfilment of any condition . It
creates an immediate and present right
though the enjoyment may be
postponed to a future date .
ii) Vested interest is not defeated by
the death of the tranaferee before
obtaining possession . If the transferee
dies , his vested interest passes on his
heirs .
iii) Vested interest is heritable and
transferable also .
As for an instance , if X executes a deed
of gift in favour of Z and directs that Z
shall not take over possession of the
gifted property till the death of X and
his wife Y , in that event , Z acquires a
vested interest in the property but the
enjoyment of the property by Z is
postponed . And if Z dies before taking
over possession of the property , his
vested interest will not be defeated but
his heirs will inherit to his vested
interest .
Contingent interest is defined by
section 21 of the Transfer of property
Act . Section 21 says that where , on a
transfer of property , an interest therein
is created in favour of a person to take
effect only on the happening of a
specified uncertain event , or if a
specified uncertain event shall not
happen , such person thereby acquires
a contingent interest in the property .
Such interest becomes a vested
interest , in the former case , on the
happening of the event , in the latter ,
when the happening of the event
becomes impossible .
But there is one exception . Where ,
under a transfer of property, a person
becomes entitled to an interest therein
upon attaining a particular age , and the
transferor also gives to him absolutely
the income to arise from such interest
before he reaches that age , or directs
the income or so much thereof as may
be necessary to be applied for his
benefit , such interest is not
contingent .
The following are the main
characteristics of a contingent interest .
i) When the transferee dies before
obtaining possession , the contingent
interest fails , and the property reverts
to the transferor .
ii) Contingent interest is depended
entirely upon the fulfilment of a
condition . Therefore , in the event of
non-fulfilment of the condition , the
contingent interest fails .
iii) Contingent interest is transferable .
But the question whether it is heritable
or not depends on the nature of the
contingency .
As for example of contingent interest ,
if A sum of money is bequeathed to A ,
in case he shall attain the age of 18 or
when he shall attain the age of 18 . A’s
interest in the legacy is contingent until
the condition is fulfilled by his attaining
that age .
Difference between the vested and
contingent interest may be shown by
the following tabular form .
Vested Interest .
Contingent Interest.
1.
Vested interest is created without
specifying the time when it is to take
effect .
Contingent interest is created to take
effect on the happening of a specified
uncertain event .
2.
In case of vested interest, it is to take
effect forthwith or on the happening of
an event which must happen .
In case of contingent interest , the
specified event may or may not
happen . If the specified event does not
happen the contingent interest fails .
3.
Vested interest is not depended upon
the fulfilment of any condition . It
creates an immediate right in favour of
the transferee though the enjoyment of
the property by the transferee is
postponed .
Contingent interest is entirely depended
upon the fulfilment of the condition .
So , if the condition , which may or may
not happen , is not fulfilled , the interest
is lost .
4.
Vested interest is not defeated by death
of transferee before he obtains
possession . Vested interest is
heritable and transferable .
Contingent interest is also transferable
but whether the contingent interest is
heritable or not is depended on the
nature of the contingency .
5.
In case of a vested interest , if the
transferee , in whose favour the interest
is created , dies before taking
possession of the property the interest
passes on his heirs .
In case of contingent interest , if the
transferee , in whose favour the interest
is created dies before obtaining
possession , the contingent interest
fails and does not pass on his heirs .
6.
In case of vested interest a right with
respect to the property is created
immediately though the enjoyment is
postponed.
But in case of contingent interest there
is a mere promise to give such right of
enjoyment with respect to the property
if the condition is fulfilled .
*****
