Ram Baran Prasad v Ram Mohit Hazra (1967)

Transfer of Property · Unborn & Perpetuity

Facts.

A partition deed contained a covenant of pre-emption — a mutual right that if any co-sharer wished to sell his share he must first offer it to the others. Later, when a share was to pass to an outsider, the covenant’s validity was challenged as offending the rule against perpetuity.

Issue.

Does the rule against perpetuity (s.14) strike down a covenant of pre-emption?

Held.

The Supreme Court held that s.14 applies only to transfers that create an interest in property. A covenant of pre-emption is a purely personal, contractual obligation that creates no interest in land, so it is not hit by the rule against perpetuity.

Why it matters.

It draws the line the perpetuity topic turns on — the rule bites on interests in property, not on mere personal contracts (pre-emption, options, covenants to renew) — one of the recognised exceptions to s.14.

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