A recent judgment passed by the Supreme Court in Civil Appeal No. 7764 of 2014 Ravinder Kumar Grewal & Ors. (Appellants) v. Manjit Kaur & Ors. (Respondents), reiterates that registration of a Family Settlement which is prepared after the family arrangement had already been made and acted upon, is not necessary.
Harbans Singh (Plaintiff) filed a suit against his real brothers Mohan Singh and Sohan Singh for a declaration that he was the exclusive owner of land admeasuring 11 kanals 17 marlas comprising khasra Nos.935/1 and 935/2 situated at Mohalla Road (‘suit land’) by virtue of a Settlement Agreement entered into between the brothers in 1970 and acted upon and documented as a Memorandum of Settlement Agreement on 10th March 1988 (‘Ex. P-6’). An alternate plea of adverse possession was also taken by him. During the pendency of the suit, Harbans Singh passed away and the Appellants were brought on record.
The trial court vides judgment decree dated 19th January 2000 partly decreed the suit by declaring Harbans Singh to be an owner in possession of khasra no. 935/1/1/2 (518) and to the extent of half share in khasra No.935/1/1/1 (519) with construction thereon. Aggrieved by this Order, the Appellants filed the first appeal before the District Judge, Sangrur. The first Appellate Court declared Harbans Singh as the owner of the suit land along with constructions including 16 shops, a service station, and a boundary wall with samadhi in the land.
The Respondent Nos. 1 to 3 (being legal representatives of Mohan Singh) preferred a Second Appeal before the High Court being R.S.A. No.946 of 2004. The High Court opined that the document, which, for the first time, creates a right in favour of the plaintiff in an immovable property in which he has no pre-existing right would require registration, is the mandate of law. Thus, the High Court set aside the conclusion recorded by the first Appellate Court and restored the judgment and decree dated 19th January 2000 passed by the trial court.
The Appellants by the above Appeal questioned the correctness of the view taken by the High Court and in particular, reversing the conclusion reached by the first Appellate Court on the Query below, thus, praying for the restoration of the decree passed by the First Appellate court and setting aside the Impugned Judgment.
Whether the document Ex. P-6 required registration as by way of the said document the interest in immovable property worth more than Rs.100/- was transferred in favour of the plaintiff?
The Hon’ble Court affirmed the conclusion reached by the first Appellate Court that the document Ex.P-6 was nothing but a memorandum of a family settlement. The facts and circumstances clearly establish that a family settlement was arrived in 1970 and also acted upon by the concerned parties. The finding of the fact recorded by the first Appellate Court being unexceptional, it must follow that the document Ex.P-6 was merely a memorandum of the family so arrived at.
Resultantly, it was not required to be registered and in any case, keeping in mind the settled legal position, the Respondents were estopped from resiling from the stated agreement in the subject memorandum, which had recorded the settlement terms arrived at in the past and even acted upon relating to all the existing or future disputes qua the subject property amongst the (signatories) family members despite the absence of antecedent title to the concerned property.
Kale & Ors. vs. Deputy Director of Consolidation & Ors
The Court referred to the judgment passed in Kale & Ors. vs. Deputy Director of Consolidation & Ors, whereby, the Court had delineated the contours of essentials of a family settlement as follows:
- “The family settlement must be a bona fide one as to resolve family disputes and rival claims by a fair and equitable division or allotment of properties between the various members of the family;
- The said settlement must be voluntary and should not be induced by fraud, coercion or undue influence;
- The family arrangement maybe even oral in which case no registration is necessary;
- It is well settled that registration would be necessary only if the terms of the family arrangement are reduced into writing. Here also, a distinction should be made between a document containing the terms and recitals of a family arrangement made under the document and mere memorandum prepared after the family arrangement had already been made either for the purpose of the record or for the information of the record or for the information of the court for making necessary mutation. In such a case the memorandum itself does not create or extinguish any rights in immovable properties and therefore does not fall within the mischief of section 17(2) of the Registration Act and is, therefore, not compulsorily registrable;
- The members who may be parties to the family arrangement must have some antecedent title, claim or interest even a possible claim in the property which is acknowledged by the parties to the settlement. Even if one of the parties to the settlement has no title but under the arrangement, the other party relinquishes all its claims or titles in favour of such a person and acknowledges him to be the sole owner, then the antecedent title must be assumed and the family arrangement will be upheld and the courts will find no difficulty in giving assent to the same;
- Even if bona fide disputes, present or possible, which may not involve legal claims are settled by a bona fide family arrangement which is fair and equitable the family arrangement is final and binding on the parties to the settlement.”
The Court, therefore, held that a Family Arrangement/ Settlement which is prepared after the family arrangement had already been made either for the purpose of the record or for the information of the record or for the information of the court, does not require registration.
Analysis of the Judgment:
The Court reiterated the position observed in Kale (supra) and, thus, set aside the Order passed by the High Court. The order passed by the High Court did not deal with the factual aspects averted to by the first Appellate Court to conclude that the document Ex. P-6 was only a Memorandum of family settlement and not a document containing the terms and recitals of a family settlement. Being the former, no registration was necessary. For which reason, the relief claimed by the plaintiff founded on the family settlement between the real brothers arrived in 1970, acted upon without any exception, and documented on 10th March 1988 ought to follow. Thus, a Family arrangement will not require registration if the same is merely prepared for record purposes, however, if the same contains the terms and recitals then registration would be required.
A family settlement or arrangement is arrived at between the members of a family descending from a common ancestor or a near relation to settle and resolve their conflicting claims or disputed titles once and for all in order to buy peace of mind and bring about complete harmony and goodwill in the family, such arrangement ought to be governed by a special equity peculiar to them and would be enforced if honestly made. The object of such an arrangement is to protect the family from long drawn litigation or perpetual strive.
To summarise, the Courts are in favour of upholding a family arrangement instead of disturbing the same on technical or trivial grounds. Where the courts find that the family arrangement suffers from a legal lacuna or formal defect the rule of estoppel is pressed into service and is applied to shut out a plea of the person who is a party to family arrangement seeks to unsettle a settled dispute and claims to revoke the family arrangement under which he himself enjoyed some material benefits.
Samridhi Lodha | Legal Associate, Mumbai
 (1976) 3 SCC 119