Memorandum Of Family Settlement Binding On Parties; Does Not Require Registration: SC [Read Judgment]

The Supreme Court has observed that a 'memorandum of family settlement' is not required to be registered and is binding on the parties.

In this case, the family members entered into a family settlement in the year 1970 settling a dispute regarding a property. Later in 1988, as disputes again arose, they executed a memorandum of family settlement incorporating the terms already settled between the parties. After this, one of the parties filed a suit for declaration contending that he was the owner in possession on the strength of this settlement. This suit was partly decreed. Allowing the appeal filed by the plaintiff, the First Appellate Court decreed the suit.

The Punjab and Haryana High Court, in the second appeal filed by defendants, considered the issue whether the document of 1970 ( family settlement) required registration? Setting aside the decree, it held 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 preexisting right would require registration, being the mandate of law.

Perusing the High court and First Appellate Court judgments, the bench comprising of Justices AM Khanwilkar and Dinesh Maheshwari observed that the High Court has not dealt with the factual aspects adverted to by the first appellate Court to conclude that the document was only a memorandum of family settlement and not a document containing the terms and recitals of a family settlement. The court noted that the High Court has not doubted the factual findings that there was not only univocal family arrangement between the parties, but it was even acted upon by them without any exception. It said:

" Being the former, no registration was necessary. For which reason, relief claimed by the plaintiff founded on the family settlement between the real brothers arrived at in 1970, acted upon without any exception and documented on 10.3.1988, ought to follow. "'

" Being a case of a family settlement between the real brothers and having been acted upon by them, it was not open to resile from the same. They were estopped from contending to the contrary."

The court, in this regard, referred to Kale & Ors. vs. Deputy Director of Consolidation & Ors (1976) 3 SCC 119 and said:

"When by virtue of a family settlement or arrangement, members of a family descending from a common ancestor or a near relation seek to sink their differences and disputes, 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 arrangement is to protect the family from long drawn litigation or perpetual strives which mar the unity and solidarity of the family and create hatred and bad blood between the various members of the family."

The court also observed that, in this case, clause (v) of Section 17(2) is attracted, which pertains to execution of any document creating or extinguishing right, title or interest in an immovable property amongst the family members. Allowing the appeal, the bench observed:

"We have no hesitation in concluding that the High Court committed manifest error in interfering with and in particular reversing the well considered decision of the first appellate Court, which had justly concluded that document dated 10.3.1988 executed between the parties was merely a memorandum of settlement, and it did not require registration."

The court said that, in view of the above findings, there is no need to examine the alternative plea taken by the plaintiff to grant decree as prayed on the ground of having become owner by adverse possession.  It may be noted that this case was earlier referred to a three judge bench to answer the issue whether a person claiming the title by virtue of adverse possession can maintain a suit under Article 65 of Limitation Act, 1963 for declaration of title and for a permanent injunction seeking the protection of his possession thereby restraining the defendant from interfering in the possession or for restoration of possession in case of illegal dispossession by a defendant whose title has been extinguished by virtue of the plaintiff remaining in the adverse possession or in case of dispossession by some other person? The three judge bench comprising Justices Arun Mishra, S. Abdul Nazeer and MR Shah observed that plea of acquisition of title by adverse possession can be taken by plaintiff under Article 65 of the Limitation Act and there is no bar under the Limitation Act, 1963 to sue on aforesaid basis in case of infringement of any rights of a plaintiff.

Case no.: CIVIL APPEAL NO. 7764 OF 2014

Case name: Ravinder Kaur Grewal  vs. Manjit Kaur

Coram: Justices AM Khanwilkar and Dinesh Maheshwari

Counsel: Sr. Adv Manoj Swarup for appellants and Adv Parveen Kumar Aggarwal for respondents

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