Vested Interest (Section 19)
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 (Bound to Happen), such Interest is Vested, unless a Contrary Intention appears from the terms of the transfer.
A Vested Interest is Not Defeated by the Death of the Transferee Before He Obtains Possession.
Explanation : 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.
Three Main Characteristics of Vested Interest :
1. A Vested Interest does not depend upon Fulfillment of a Condition and it Creates a Present and Immediate Right.
2. A Vested Interest is not Defeated by the Death of Transferee before obtaining Possession, it will pass on to his Heirs.
3. A Vested Interest is Transferable as well as Heritable.
(Elokasee v. Darponarain, 5 Cal. 59)
Unborn Person also acquires the Vested Interest under Section 20 of The Transfer of Property Act, 1882 which states that if an interest created the benefit of an unborn person that interest he acquires upon his Birth.