Compromise Decree In Respect Of Land Which Is Not Subject-matter Of Suit But Is Part Of Family Settlement Does Not Require Compulsory Registration : Supreme Court

The Supreme Court observed that a compromise decree in respect of land which is not the subject-matter of suit but is part of the settlement between the family members does not require compulsory registration.

The bench comprising Justices Sanjay Kishan Kaul and Hemant Gupta observed that a compromise decree entered into between the parties in respect of land which was not the subject matter of the suit is valid and a legal settlement.

In this case, the High Court dismissed a suit on the ground that the land even though being subject-matter of compromise, was not the subject-matter of the suit and therefore the decree required registration under Section 17(2)(vi) of the Registration Act. So the issue in appeal before the Apex Court was whether a compromise decree in respect of land which is not the subject-matter of suit but is part of the settlement between the family members requires compulsory registration in terms of Section 17(2)(vi) of the Registration Act.

Section 17(1) provides the list of documents of which registration is compulsory. Section 17(2) (vi)  clarifies that this compulsory registration is not applicable to any decree or order of a Court [except a decree or order expressed to be made on a compromise and comprising immovable property other than that which is the subject-matter of the suit or proceeding.

Referring to the provisions of the Act and precedents in this regard, the bench observed:

"12. An aggrieved person can seek enforcement of family settlement in a suit for declaration wherein the family members have some semblance of right in property or any pre-existing right in the property. The family members could enter into settlement during the pendency of the proceedings before the Civil Court as well. Such settlement would be binding within the members of the family. If a document is sought to be enforced which is not recognized by a decree, the provision of clause (v) of sub-section 2 of Section 17 of the Registration Act, 1908 would be applicable. However, where the decree has been passed in respect of family property, clause (vi) of sub-section 2 of Section 17 of the Registration Act, 1908 would be applicable. The principle is based on the fact that family settlement only declares the rights which are already possessed by the parties."

The bench further noticed that in Bhoop Singh v. Ram Singh Major, it was held that decree or order including compromise decree creating new right, title or interest in praesenti in immovable property of value of Rs.100/- or above is compulsory for registration. It was not the case any pre-existing right but right that has been created by the decree alone, the bench observed.

"17. In view of enunciation of law in Bhoop Singh's case, we find that the judgment and decree of the High Court holding that the decree requires compulsory registration is erroneous in law. The compromise was between the two brothers consequent to death of their father and no right was being created in praesenti for the first time, thus not requiring compulsory registration. Consequently, the appeal is allowed and the suit is decreed.", the court said while allowing the appeal.

Case: Ripudaman Singh vs. Tikka Maheshwar Chand [CA 2336 OF 2021]

Coram: Justices Sanjay Kishan Kaul and Hemant Gupta

Citation: LL 2021 SC 293

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