Where, on a transfer of property, an interest therein is created in favour of a person to take effect only on the happening of a specified uncertain event, or if a specified uncertain event shall not happen, such person thereby acquires a contingent interest in the property.
Such interest becomes a vested interest, in the former case, on the happening of the event, in the latter, when the happening of the event becomes impossible:
Exception.— —Where, under a transfer of property, a person becomes entitled to an interest therein upon attaining a particular age, and the transferor also gives to him absolutely the income to arise from such interest before he reaches that age, or directs the income or so much thereof as may be necessary to be applied for his benefit, such interest is not contingent.
Legal Commentary & Landmark Judgments: Section 21
Uncertainty of vesting distinguishes a contingent interest, where proprietary title does not attach immediately but remains dependent upon the occurrence of a specified future event which may or may not happen.
The statutory exception confirms that an interest is not contingent merely because a bequest is made upon attaining a particular age, provided the income generated by the fund prior to that age is directed to be paid to the beneficiary for their maintenance or education.
Contingent interests are transferable under property law, but the transferee takes the property subject to the exact same hazard: if the contingency never happens, the transferee acquires nothing. Furthermore, unlike vested interests, a contingent interest cannot be attached in execution under Section 60 CPC.