Transfer of Property Act_Vested Interest and Contingent Interest

Vested Interest and Contingent Interest

1. The Transfer of Property Act, 1882 deals with the following two categories of interests - [a] Vested Interest, and [b] Contingent Interest
2. Section 19 of the Transfer of Property Act, 1882 deals with a Vested Interest.
3. Vested Interest is not depend upon the fulfilment of a condition.
4. It creates present and immediate right through enjoyment.
5. It may be postponed to a future date.
6. A vested interest is not come to an end by the death of the transferee before obtaining possession. It will pass on to his/her heirs.
7. In short, vested interest is transferable and heritable.
8. For Example - ‘M’ gift to ‘P’ on the death of D creates a vested interest in M even during D's lifetime for the condition is bound to happen. But a gift to M on the marriage of D creates only a contingent interest because D may never marry, but that contingent interest becomes vested if and when D gets married.
9. Section 21 of the Transfer of Property Act, 1882 deals with a Contingent Interest.
10. Contingent Interest refers to a future interest which is an uncertain and it largely depends upon the happening of an event.
11. In this type of interest, an interest can only arise on the occurrence of a specified event.
12. In a contingent interest, the person who will enjoy the property or the occurrence of the event may be unknown and uncertain
13. When the interest is contingent, the transfer depends upon a condition precedent.
14. When the condition is fulfilled the transfer takes effect and that the interest becomes vested.