Kamla Varma & Ors. v. Surendra Pal Singh

4. SBI A/C NO.10818762150, Branch: 11, Sansad Marg, New Delhi

5. HDFC A/C NO.00031570003967, Branch:G-3/4, Surya Kiran Building-19, K.G. Marg, New Delhi

6. State Bank of Bikaner & Jaipur Branch: D-IO, Vivek Vihar, Delhi

7. PNB A/C No.0159000100209205, Branch Green Park, New Delhi d) FDRs:-

1. Canara Bank D-5, Block Market,Vivek Vihar, Delhi

2. PNB, Green Park, New Delhi

3. SBI, Sansad Marg, New Delhi

4. Bank of Maharashtra, C-2, Vivek Vihar, Delhi.

4. Twelve days after the demise of their father, the plaintiffs and the defendants jointly agreed to equitably divide/partition the assets of their deceased father, in order to avoid any future conflict or litigation. Consequently, the Deed of Family Settlement dated 10.04.2015 was executed whereby it was agreed that the Agricultural land at Village Inayatpur, Tehsil Ghaziabad along with Credit standing in the name of deceased (Plaintiff's father) in Canara Bank A/C NO.24575, Branch:D-5, Block Market, Vivek Vihar, Delhi and FDR in Canara Bank shall be inherited by the defendant exclusively.

5. It was further agreed that the residential property/kothi at A-27, Vivek Vihar, Phase-I, Delhi- 110095/Suit Property shall be exclusively inherited by four daughters/plaintiff no. 1 to 4 each in equal 1/4th undivided share. In addition to the above, it was mutually agreed that all the credits in Bank Account/FDRs in all banks (except Canara Bank) and all the share/securities and other movable assets standing in the name of standing in the name of their deceased father, shall be exclusively inherited by the four daughters/plaintiff no.1 to 4 to the extent of 25% share each.

6. Consequently, the defendant acted on the Family Settlement Deed dated 10.04.2015 by furnishing it before the appropriate authority and got his share i.e. Agricultural land at Village Inayatpur, Tehsil Ghaziabad transferred in his name.

7. The plaintiff has submitted that Suit Property has been in the exclusive possession of the plaintiffs. However, despite several oral requests of the plaintiffs to get the Suit Property transferred in their name, the defendant has neither given any heed to their oral requests nor agreed to give them the requisite NOC.

8. Hence, aggrieved by the conduct of their brother/Defendant, the present Suit for Declaration is filed seeking the following reliefs: - “ PRAYER It is therefore mostly respectfully prayed that this Hon'ble Court may be pleased to pass:

9. The Defendant was served twice, firstly on 15.04.2020 and secondly on 03.11.2020, however none has appeared on behalf of the defendant and the opportunity to file the Written Statement was also closed vide Order dated 25.08.2022. Thereafter, the Defendant has been proceeded ex-parte.

10. Sh. Suresh Kumari/Plaintiff No. 2 has examined herself as PW-1 and tendered her Affidavit of Evidence as Ex. PW1/A and has deposed on behalf of all the plaintiffs that their mother, Mrs. Vidyawati Verma died on 19.12.2010 and her father Sh. H.S. Verma expired intestate on 29.03.2015 leaving behind the parties as their only surviving Class-1 legal heirs. The death certificate of the parents is exhibited as EX PW1/4and EX PW1/5. Deed of Family Settlement dated 10.04.2015 is Ex. PW1/6. The plaintiff has deposed on similar lines as the facts stated in the plaint.

11. The Plaintiffs in their Written Submissions have relied on Anathula Sudhakar vs. P Buchi Reddy & Ors AIR 2008 SC 2033 to submit that all the parties to the agreement, including the respondent, are in possession of their respective share as per the Agreement, hence the plaintiffs have sought the relief of recognition and declaration of their title over the respective shares.

12. Additionally, the Deed of Family Settlement dated 10.04.2015 is binding on all parties since the defendant has already used same Agreement to get his share of the property transferred in his name. The Family Settlement would operate as estoppel against all the signatories of the family Agreement even if it is unregistered. Reliance has been placed upon Thulasidhara v. Narayanappa AIR Online 2019 SC 262.

13. It has further been argued that the Deed of Family Settlement is merely a memorandum of the agreed terms recording the equitable division of the respective shares of all the stakeholders and would thus, be exempt from registration and the same is admissible in evidence. Reliance is placed on K. Arumuga Velaiah v. P.R. Ramasamy, 2022 SCC OnLine SC 95, decided on 27.01.2022; Korukonda Chalapathi Rao &Anr v. Korukonda Annapurna Sampath Kumar, Civil Appeal No(S). 6141 of 2021 and Ravinder Kaur Grewal &Orsv. Manijit Kaur &Ors. AIR 2020 SC 3799.

14. Submissions heard and the Written Submission, documents along with the judgments perused.

15. To ascertain the title of the Suit Property and the enforceability of the Family Settlement Deed dated 10.04.2015, two aspects fall for consideration before this Court: firstly, whether the Deed of Family Settlement dated 10.04.2015 required mandatory registration in terms of the Registration Act 1908? And secondly, whether the Deed of Family Settlement dated 10.04.2015 would be binding on the parties? Family Arrangements/Settlements and Mandatory Registration

16. At the very threshold, before embarking on the facts of the present case, it is important to understand the scope, concept and nature of Family Settlements.

17. Halsbury's Laws of England, Vol. 17, Third Edition, at pp. 215-216 defined a family arrangement as an agreement between members of the same family, intended to be generally and reasonably for the benefit of the family either by compromising doubtful or disputed rights or by preserving the family property or the peace and security of the family by avoiding litigation or by saving-its honour.... Family arrangements are governed by principles which are not applicable to dealings between strangers.

18. Further, Sahu Madho Das and others v. Pandit Mukand Ram and another, AIR 1955 SC 481 explained the basic eligibility for parties to enter into a Family Settlement as under: "It is well settled that compromise or family arrangement is based on the assumption that there is an antecedent title of some sort in the parties and the agreement acknowledges and defines what that title is, each party relinquishing all claims to property other than that falling to his share and recognising the right of the others, as they had previously asserted it, to the portions allotted to them respectively. That explains why no conveyance is required in these cases to pass the title from the one in whom it resides to the person receiving it under the family arrangement. It is assumed that the title claimed by the person receiving the property, under the arrangement had always resided in him or her so far as the property falling to his or her share is concerned and therefore no conveyance is necessary."

19. The aforesaid principles were analysed and upheld by the Supreme Court in the landmark judgment of Kale and Others Vs. Deputy Director of Consolidation and Ors. (1976) 3 SCC 119 and it was observed that the object of such an arrangement is to protect the family from long drawn litigation and perpetual strife’s which mar the unity and solidarity of the family and create hatred and bad blood between various members of the family. However, the bonafide and propriety of a family arrangement has to be judged by the circumstances prevailing at the time when such settlement was made. The onus of proving the family settlement lies solely on the person claiming that a family Agreement existed.

20. In Kale (Supra), while also delving into the aspect of compulsory Registration of Family settlements, the court opined as under:-

into writing. Here also, a distinction should be made between a document containing the terms and recitals of a family arrangement made **under the document** and a mere memorandum prepared after the family arrangement had already been made either for the purpose of the record or for information of the court for making necessary mutation. In such a case the memorandum itself does not create or extinguish any rights in immovable properties and therefore does not fall within the mischief of Section 17(2)of the Registration Act and is, therefore, not compulsorily registrable; (5) The members who may be parties to the family arrangement must have some antecedent title, claim or interest even a possible claim in the property which is acknowledged by the parties to the settlement. Even if one of the parties to the settlement has no title but under the arrangement the other party relinquishes all its claims or titles in favour of such a person and acknowledges him to be the sole owner, then the antecedent title must be assumed and the family arrangement will be upheld and the courts will find no difficulty in giving assent to the same; (6) Even if bona fide disputes, present or possible, which may not involve legal claims are settled by a bona fide family arrangement which is fair and equitable the family arrangement is final and binding on the parties to the settlement."

21. Thus, the Supreme Court carved out two categories of family settlement, one oral settlement and the other written settlement and held that the prior does not require registration; however, the later would be a compulsorily registerable document. However, in the second category, an exception was carved out, that if the Memorandum of Family Settlement was reduced to writing only for the purpose of the record or for information of the court for making necessary mutation then it would be exempt from registration as the memorandum itself does not create or extinguish any rights in immovable properties.

22. In Lieutenant Col. Gaj Singh Yadav vs. Satish Chander Yadav, 1999 (51) DRJ 240, it was explained that if a party had a share in the property, enlargement of such share by relinquishment or gift by the other defendant would not require registration. It is only when a right in the property is created for the first time by a particular document that it would require registration. Therefore, mischief of Section 49 of the Registration Act, 1908 would not fall on an oral settlement.

23. The Apex Court has analysed the effect of non-registration of a Kharurnama (family arrangement recording past transaction)in the case of Korukonda Chalapathi Rao (Supra) and has opined that when the as to whether a document by itself ‘affects’, i.e., by itself creates, declares, limits or extinguishes rights in the immovable properties in question and it is found that the document merely records past transactions which have been entered into by the parties, does not purport to by itself create, declare, assign, extinguish or limit right in properties, it would not attract Section 49(1)(a) of the Registration Act, 1908. Therefore, a mere recital of what has already taken place cannot be held to declare any right and there would be no necessity of registering such a document.

24. Similarly, in a very recent judgement of K. Arumuga Velaiah (Supra) while emphasizing upon the distinction between Section 17(2) Clause (iv) and Clause (v) of the Registration Act. 1908, the Court observed that a document of partition which provides for effectuating a division of properties in future would be exempt from registration. It was further crystallized that by virtue of Section 17(2) Clause (v) Registration Act 1908, any document which does not in itself create a right, title or interest in any immovable property but rather creates a right to obtain a subsequent document which when executed would create a right in the property, the same does not require mandatory registration. Rule of Estoppel

25. The rule of estoppel is a legal principle that prevents a person from arguing something contrary to a claim made or implied by their previous actions or statements. Thus, estoppel prevents a party from asserting rights or facts that are contrary to their previous statements, conduct, or commitments when it would be unjust to allow them to go back on their word. The key elements include: a. Representation or conduct by one party that leads the other party to believe in a certain state of affairs. b. Reliance by the second party on this belief. c. Detriment to the second party if the first party is allowed to deny the truth of the representation.

26. The Supreme Court, in S. Shanmugam Pillai and Ors. v. K. Sahnmugam Pillai and Ors. (1973) 2 SCC 312, have empathized on the importance of equitable principles and stated that certain equitable principles such as estoppel, are not mere rules of evidence, but rather serve as a very important element in administration of justice and thus, the courts are hesitant in narrowing down the scope of the same as they have been liberally relied upon time and again to render justice.

27. While applying the principle of estoppel in the case of Family Settlements, the Supreme Court in Kale and Ors (Supra)and Thulasidhara (Supra) has observed that the parties benefiting from the Family arrangement, could not later challenge its validity.

28. Similarly, while relying upon the above judgments in the case of Ravinder Kaur Grewal (Supra), the Supreme court emphasized that estoppel is an equitable doctrine aimed at preventing unfair advantage or detriment resulting from inconsistency in a party's claims or representations. It was observed that since, the parties having acted upon the terms of a disputed Family settlement to the prejudice of the other party, it was not open to them to resile from the said arrangement and they were estopped from disowning the arrangement. It is noteworthy that the court observed that even in the event a family arrangement has not been registered, it would not prejudice its binding nature upon the members of the family and would continue to act as an estoppel to prevent members from revoking the family arrangement, if the members have acted upon it. Findings and Analysis:

29. Thus, it is no more res integra that the family settlement, even if oral or unregistered, should be binding if made bona fide and acted upon. Such arrangements would not require registration if they itself do not create or extinguish any right, title or interest in any immovable property and rather merely create a right to obtain another document to enforce their rights. A family arrangement is binding on the parties and operates as an estoppel and it precludes any of the parties who have taken advantage under the Agreement from revoking or challenging the same.

30. Additionally, the Courts have time and again cautioned that since family settlements aim to maintain harmony and resolve disputes within the family, mere technical objections should not invalidate them. They have leaned in favour of upholding family arrangements/settlements instead of disturbing them on technical grounds and even if the Settlement suffers of any defect/lacunae, the rule of estoppel is pressed into service to prevent any party from unsettling the arrangement out of which he himself has derived any benefits/advantage.

31. Keeping in mind the above crystallized principles, the facts of the present case and the terms of the Deed of Family Settlement dated 10.04.2015, may be analyzed.

32. The parties to the present Suit are four daughters and one son of Late Sh. H.S. Verma, who amicably arrived at an equitable family arrangement to settle their shares in the properties/ assets left by their father who died intestate on 19.12.2010. The relevant terms of the Deed of Family Settlement dated 10.04.2015 are as under:- " 5) SHARES And whereas the parties hereto desire and have agreed that the respective inheritance of the estate of the deceased (Sh. H.S. Verma) should be resolved amicably between the parties and litigation amongst the family members should be avoided. Now This Deed Witnesseth As Follows:

1. In pursuance of the said agreement and in consideration of the premises, the parties aforementioned have agreed that the estate of the deceased shall be distributed amongst the heirs of the deceased as detailed in the following clauses.

2. Agricultural Land at Village Inayatpur, Tehsil Ghaziabad shall be inherited by Dr. S.P. Singh exclusively.

3. Credit standing in the name of the deceased in Canara Bank, A/c No.24575, Branch D-5, D Block Market, Vivek Vihar, Delhi and FDR in Canara Bank in the above branch shall be inherited by Dr. S.P. Singh exclusively.

4. Freehold Residential Property at A-27, Vivek Vihar, Phase-I, Delhi-110095 shall be exclusively inherited by the four daughters namely Smt. Kamla Varma, Smt. Suresh Kumari, Smt. Saroj Kumari and Smt. Veena Gupta and each of them shall inherit 1/4th undivided share each.

5. All the credits in Bank Accounts/ FDRs standing in the name of the deceased n all the banks etc., except Canara Bank as mentioned in Clause 3 above, shall be exclusively inherited by the four daughters namely Smt. Kamla Varma, Smt. Suresh Kumari, Smt. Saroj Kumari and Smt. Veena Gupta to the extent of 25% share each.

6. All the Shares/Securities and other Movable Assets standing in the name of the deceased shall be exclusively inherited by the four daughters namelySmt. Kamla Devi Varma, Smt. Suresh Kumari, Smt. Saroj Kumari and Smt. Veena Gupta to the extent of 25% share each.

7. The parties hereby declare that the present Settlement Deed has been executed by them of their own free will and accord without any force, fraud, coercion or undue influence of any type whatsoever.

8. That the present Settlement Deed is irrevocable. Any testamentary disposition, if any, shall be of no consequence and shall be treated as void and the present Deed of Settlement shall prevail.

9. Any monitory gain from previously acquired land also belong to Dr. S.P. Singh. In Witness Whereof, the parties hereto have set and subscribed their hands to this writing the day and year first hereinabove written.

1. Dr. S.P. Singh (Son)

2. Smt. Kamla Varma (Daughter)

3. Smt. Suresh Kumari (Daughter)

4. Smt. Saroj Kumari (Daughter)

5. Smt. Veena Gupta (Daughter) WITNESSES

1. Dushyant Varma s/o Sh. Kailash Varma

2. Nishant r/o MASS Appts, Plot 24, Sector 10, Dwarka, New Delhi- 110075 "

33. From a bare perusal of the above terms, it is discernible that:

(i) The parties had already agreed that the shares and the inheritance of estate of their father should be resolved in an amicable manner and only in furtherance of their mutual agreement, the clauses regarding the manner of distribution of the assets were detailed in the settlement;

(ii) The Agricultural land at Village Inayatpur, Tehsil Ghaziabad along with Credit standing in the name of deceased (Plaintiff's father) in Canara Bank A/C NO.24575, Branch:D-5, Block Market, Vivek Vihar, Delhi and FDR in Canara Bank was agreed to be inherited by the defendant exclusively.

(iii) Any monetary gain from the agricultural land shall also lie with the defendant;

(iv) The suit property was agreed to be exclusively inherited by four daughters/plaintiff no. 1 to 4each of them shall inherit 1/4th undivided share each;

(v) All the credits in Bank Account/FDRs standing in the name of their deceased father in all banks (except Canara Bank) and all the share/securities and other movable assets standing in the name of deceased were agreed to be exclusively inherited by the four daughters/plaintiff no.1 to 4 to the extent of 25% share each;

(vi) The Settlement Deed is irrevocable in nature and shall prevail over any other testamentary disposition;

(vii) The Settlement bears signature of 2 witnesses namely, Mr.

(viii) The Settlement also bears the signatures of all the parties to the present Suit on all the pages of the Deed.

34. While addressing the technical issue of registration of the Deed of Family settlement dated 10.04.2015, it is the duty of the Court to carefully determine if new rights are created through the settlement or whether the case falls within the exception of Section 17(2)(v) of the Registration Act,

1908.

35. In essence, Section 17 of the Registration Act, 1908, deals with documents that require compulsory registration. Specifically, Subsection (2) lists exceptions to the documents mentioned in Subsection (1) that do not require compulsory registration. Clause (v) of Subsection (2) states that any document that does not create, declare, assign, limit, or extinguish any right, title, or interest in immovable property, or that does not acknowledge the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation, or extinction of any such right, title, or interest, does not require compulsory registration. Thus, Section 17(2)(v) of the Registration Act, 1908, exempts documents that do not affect the right, title, or interest in immovable property from compulsory registration.

36. Adverting to the clauses of the Family Settlement, firstly, this was a settlement between siblings had a pre-existing right to enjoy the assets either in part or as whole after the demise of their father. The rights of the parties were admitted and settled prior to even execution of the Deed of Family Settlement. Thus, this document only recorded the respective share of the parties in the properties inherited by them and agreed to adjust their respective shares in the manner stated therein. Thus, the document was not required to be registered as this document never created any rights for the first time in the immovable properties and was merely a memorandum recording the already agreed terms of distribution of respective shares of the stakeholders.

37. Secondly, it was a document creating a right to obtain another document, which is the NOC in the present case, in order to effect transfer of title in the revenue records. Hence, the Family Settlement Deed dated 10.04.2015 would be exempt from registration by virtue of Section 17(2)(v) of the Registration Act, 1908.

38. PW-1/Suresh Kumari and the clauses of Exhibit PW1/6, has deposed that after the demise of Late Sh. H.S. Verma, the five siblings intended to settle the shares mutually and amicably and the Deed of Family Settlement dated 10.04.2015 was consequently executed. It is further deposed that the defendant having accepted the family settlement Ex. PW-1/6, got the agricultural land has gotten his father’s immovable property mutated in his name by the Order of the Tehsildar as recorded in Khatoni dated 25.02.16 which is Ex.PW1/7.

39. However, unfortunately, he, when approached by the plaintiffs, has refused to provide the plaintiffs the NOC for transferring the title of the Suit Property in their name. The defendant who is settled in Canada, having already gotten his share transferred in his name has apparently become uninterested and has not even contested the present Suit.

40. It is thus, concluded that the parties had entered into the binding Deed of Family Settlement dated 10.04.2015. Relief:

41. In light of the above, it is held that the Deed of Family Settlement dated 10.04.2015 is a binding document on all the signatories and thus, the plaintiffs are hereby held entitled to get the Suit property/A-27, Vivek Vihar, Phase-I, Delhi-110095 mutated in their name and for transfer the amounts/release of funds in accordance with the terms of the Deed of Family Settlement dated 10.04.2015.

42. The Suit is decreed accordingly. The pending application(s) also stand disposed in the above terms. Parties to bear their own costs.

43. The Decree Sheet be drawn.

JUDGE JULY 15, 2024