Not Mandatory To Register Or Pay Stamp Duty On Family Settlements Arrived At Orally, Put Into Writing Only For Purpose Of Info: Delhi HC
The Delhi High Court has observed that there is no requirement to compulsorily register family settlements and to pay stamp duty for the same when such settlement is initially arrived at as an oral partition, however, later is put into writing for the purpose of information. "The partition had been agreed upon between the parties by way of oral agreement with the intervention of their...
The Delhi High Court has observed that there is no requirement to compulsorily register family settlements and to pay stamp duty for the same when such settlement is initially arrived at as an oral partition, however, later is put into writing for the purpose of information.
"The partition had been agreed upon between the parties by way of oral agreement with the intervention of their counsels. The memorandum of settlement does not itself partition the properties, but only records the same as an aid of memory," Justice Pratibha M Singh observed.
The Court was dealing with an application in a partition suit seeking waiver of payment of stamp duty in respect of the assets inherited by the various parties from the estate in question.
Further, the application also sought cancellation of the notice dated 14th February, 2022 received from the Registry of the High Court and the notice dated 3rd March 2022 received from the Office of the Assistant Collector.
The suit seeking partition and other reliefs was filed before the High Court by the legal heirs of one Late Sh. S.S. Walia who had passed away on 10th December, 2017.
During the pendency of the suit itself, the three children and the wife of the deceased with the assistance of their Counsels had arrived at a settlement. Thereafter, the terms of settlement were incorporated into the 'Memorandum of Family Settlement and Arrangement' dated 16th October, 2018.
The said family settlement was approved and a decree in terms thereof was passed by the Court, vide order dated 16th October, 2018.
However, in order to prepare the decree sheet, the High Court Registry had directed furnishing of valuation reports of the assets for the purpose of calculating the stamp duty. Thus, the application sought waiver of payment of stamp duty and cancellation of the notices.
"The 'Memorandum of Family Settlement and Arrangement' dated 16th October, 2018, is merely a recordal of the oral agreement as to the mode and manner of partition. Therefore, it is in the nature of a family settlement which was arrived at between the parties. The partition had been agreed upon between the parties by way of oral agreement with the intervention of their counsels. The memorandum of settlement does not itself partition the properties, but only records the same as an aid of memory," the Court noted.
The Court noted that its a settled position of law that if an understanding has been arrived at between the parties previously, and it is only written down in a document after the settlement has been arrived at, the same would not require registration. Reliance was placed on Supreme Court's judgment in Kale & Ors. v. Deputy Director of Consolidation & Ors., (1976) 3 SCC 119.
Therefore, the Court concluded that there was no requirement of valuation of the suit properties in the present case.
"The payment of stamp duty by the legal heirs of Late Sh. S.S. Walia and Dr. Urmila Walia shall stand waived. Notices issued by the various authorities shall also stand cancelled and withdrawn, without any further orders," the Court ordered.
The application was disposed of accordingly.
Case Title: HIMANI WALIA v. HEMANT WALIA & ORS.
Citation: 2022 LiveLaw (Del) 244