Section 21 of TPA : Section 21: Contingent Interest

Explanation using Example

Imagine a situation where Mr. Sharma owns a piece of land and decides to transfer it to his niece, Priya, but the transfer is conditional. The condition is that Priya will only become the owner of the land if she graduates from college by the age of 25. This creates a contingent interest in the property for Priya because her ownership is dependent on a specified uncertain event - her graduation by a certain age.

If Priya graduates before she turns 25, the contingent interest becomes a vested interest, and she becomes the owner of the land. However, if Priya does not graduate by the age of 25, the interest never vests, and she does not become the owner.

However, if Mr. Sharma had also stated that the income from the land (for example, rent from tenants) should be given to Priya while she is still studying, regardless of whether she graduates by 25, then her interest in the property would not be considered contingent but vested, as she has an absolute entitlement to the income from the property before the condition of graduation is met.