This document discusses the rule against accumulation in Section 17 of Indian law. Section 17 establishes exceptions to Section 11, which voids conditions that unreasonably restrain the enjoyment of transferred property. Section 17 allows for the accumulation of income from transferred property for a maximum period of either the transferee's life or 18 years, whichever is longer. Directions to accumulate income beyond this period are void. The document provides illustrations of valid and invalid directions for accumulation, and notes exceptions for accumulation to pay debts, raise portions for children, or preserve transferred property.
This document discusses the rule against accumulation in Section 17 of Indian law. Section 17 establishes exceptions to Section 11, which voids conditions that unreasonably restrain the enjoyment of transferred property. Section 17 allows for the accumulation of income from transferred property for a maximum period of either the transferee's life or 18 years, whichever is longer. Directions to accumulate income beyond this period are void. The document provides illustrations of valid and invalid directions for accumulation, and notes exceptions for accumulation to pay debts, raise portions for children, or preserve transferred property.
This document discusses the rule against accumulation in Section 17 of Indian law. Section 17 establishes exceptions to Section 11, which voids conditions that unreasonably restrain the enjoyment of transferred property. Section 17 allows for the accumulation of income from transferred property for a maximum period of either the transferee's life or 18 years, whichever is longer. Directions to accumulate income beyond this period are void. The document provides illustrations of valid and invalid directions for accumulation, and notes exceptions for accumulation to pay debts, raise portions for children, or preserve transferred property.
RULE AGAINST ACCUMULATION SECTION 17- IT IS EXCEPTION
OF S11 ACCUMMULATION= PROFITS OR PROPERTY, it can be whole or in part
INCOME
ARISING
OUT
OF
THE
Section 11 says conditions which restrains the enjoyment of property
which is absolutely transferred is void, Section 17 is the exception of this rule , the application of S11 applies only absolute transferred, but section 17 applies all kinds of transferred. it means S17 postpone the beneficial enjoyment of a property, such postponement is discouraged by law just as postponement of vesting of interest has been that discouraged under the rule against perpetuities . Under section 17 direction for the accumulation of income is allowed but not beyond a certain period. The maximum permissible lime /period upto which income of the property may be accumulated is: a) Life of the transferee or, b) A period of 18 years, whichever is a longer period So a direction of postponement of beneficiary enjoyment or in other word which makes accumulation of income beyond this period of maximum permissible limit is void. Illustration A transfer his properties to B for life with a direction that the income of the said properties shall accumulated during As life and shall be given also to C. The direction for the accumulation of income is valid , upto life of B A transfers a property to B for life and thereafter to Bs such son who first attains the age of 25 years with a direction for accumulation of income till Bs first son attains 25 years . The direction of the accumulation of such income is void, reason it is beyond the permissible limit ( life or 18 years). A transfers property to B in 1960 with a direction for the accumulation of its benefits upto 1990. A dies in 1985 thus the transferor lives for 25 years which is more than 18 years . The direction for accumulation is valid upto 1985 ( for 25 years) because it is the longer period. Exception 1. Payment of Debts- the period of accumulation can be exceed in case of payment of bebts. For example A makes a gift of his house to B with a direction that form the rents of the house B shall pay Rs
500 per months towards the satisfaction of a debt of Rs on Lac
incurred by A. The direction of the accumulation of income is valid even it continues after the life of A or expiry of period of 18 years. 2. Raising portions- Portion ordinarily means a part or share which points to the arising of something our of something less for the benefit of some children or class of children. 3. Preservation of Property- for the maintenance of property/ preservation of property, it is allowed.