SC Says Memorandum of Family Settlement is Compulsorily Registrable


March 27, 2018

Case name: Sita Ram Bhama v. Ramvatar Bhama

Date of Judgement: March 23, 2018

Brief facts: In the case, Plaintiff and respondent were real brothers. Their father had decided to divide his self-acquired movable and immovable properties between Plaintiff and Defendant, however he did not execute any settlement deed and died in 1993. Later, the   plaintiff   and   defendant   recorded   a memorandum of settlement as decided by their father. The settlement was signed by the mother as well as two sisters of the parties.

Later on account of dispute of property between the parties, the Plaintiff filed the said memorandum of family settlement in Court. However, the Respondent opposed the same contending that as the impugned document was not registered and not properly stamped, the same was not admissible in evidence.

In view of the aforesaid facts and circumstances, two issues were confronted by the Supreme Court pertaining to evidentiary value and admissibility of family settlement document.

Firstly, whether memorandum of family settlement could have been accepted in evidence– With reference to this issue, the Supreme Court observed that as the so called family settlement takes away the share of the sisters and mother, therefore the same was compulsorily registrable.

That the impugned document was not mere memorandum of family settlement rather a family settlement itself. In any view of the matter, there is relinquishment of the rights of other heirs of the properties, hence, the document was compulsorily registrable under Section 17 of the Registration Act.

To arrive at its decision, the Court also relied on the precedent Kale and Ors. v. Deputy Director of Consolidation and Others[1]. The Supreme Court in the case has enumerated the essentials of a family settlement and states that registration would be   necessary   only   if   the   terms   of   the family arrangement are reduced to writing.

Secondly, whether   the   impugned document   of family settlement which though was inadmissible in evidence could be used for any collateral purpose– With reference to this issue, the Supreme Court held that in a   suit   for   partition,   an unregistered   document   can   be   relied   upon   for   collateral purpose   i.e.   severancy   of   title,   nature   of   possession   of various shares but not for the primary purpose i.e. division of joint properties by metes and boundsof joint properties by metes and bounds.

That an unstamped instrument is not admissible in evidence even for collateral purpose, until the same is impounded.

The entire case can be accessed here.

[1] (1976)   3   SCC   119