Unregistered Family Settlement Admissible In Evidence Only If Agreement Is Confirmed With Approval Of All Family Members: Karnataka High Court

A single judge bench of Justice Sachin Shankar Magadum allowed the appeal filed by Krishnappa and others and set aside the appellate court order.

The bench said,

"Family settlement involves participation and the same needs to be signed by all the members and there has to be an acknowledgment when the agreement is arrived at, free of duress and coercion within the family members. A family settlement is admissible in evidence provided that the agreement is confirmed with approval of all family members who firmly support resolution given in the agreement at a later date which does not require registration."

The appellate court had decreed the suit in entirety, granting share to the plaintiff (Ashwathamma, daughter of original plaintiff) in all the properties. The appellate court, having assessed oral and documentary evidence, had placed strong reliance on 'panchayath palupatti' to arrive at its conclusion.

It was of the view that the parties had amicably resolved to share the properties equally and accordingly, the defendant had agreed under the panchayath palupatti to allot half share.

The appellate court had also placed reliance on judgment rendered by the Apex Court in Polti Lakshmi vs. Krishnavenamma, AIR 1965 SC 825, where it was held that palupatti does not require registration.

Findings:

The High Court observed that palupatti is not in the nature of a "family arrangement" as all the family members have not participated and have not signed it.; It does not indicate that all the assets are part of a common family.

"The main requirement of a family arrangement is that all the family members have to agree and such an agreement should indicate that rights and title of the parties to the arrangement is voluntarily accepted by all the members and the same is acknowledged under the very document."

It added, "One more requisite condition for a family arrangement is that each party to the agreement should recognize the right of other members, as they had previously asserted it, to the portions allotted to them respectively."

It also held that if the parties have reduced the family agreement into writing with an intention of using that writing as an evidence of what they have negotiated and when the arrangement is brought on by the document alone, then the said document requires registration in terms of Section 17(1) of the Registration Act.

Accordingly it held ,

"The document does not indicate that it is in the nature of family arrangement. The document does not indicate that all the family members have participated and therefore, the document is inadmissible in evidence. Secondly, the agreement is sought to be reduced into writing and therefore, it compulsorily requires registration. Ex.P-20 does not record previously negotiated terms but what can be gathered is under the document, plaintiff and defendant No.1 have agreed to take equal share and therefore, it is not a family arrangement but it amounts to a partition deed during the pendency of the suit and therefore, the said document requires registration and is subject to payment of stamp duty."

The bench further held that the Appellate Court erred in not taking note of the fact that plaintiff failed to discharge the initial burden. "The findings of the Trial Court is based on rebuttal evidence. Therefore, the Appellate Court erred in reversing the judgment and decree of the Trial Court by placing reliance on Ex.P-20."

Accordingly, it allowed the appeal and restored the judgment and decree passed by the trial court which held that that only two items of schedule property were joint family ancestral property and dismissed the suit qua the rest items.

Case Title: KRISHNAPPA v ASHWATHAMMA

Case No: R.S.A.NO.87 OF 2010

Citation: 2022 LiveLaw (Kar) 362

Date of Order: 26TH DAY OF AUGUST, 2022

Appearance: Advocate T.K. RAJAGOPALA for appellants; Advocate ABHINAV.R for respondent

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