Judgment:
L. Rath, J.
1. This is an appeal by the defendants-appellants challenging the decree in a suit by the plaintiff-respondent, for declaration that the compromise decree in T.S. No. 8/68 in the Court of the Munsif, Athagarh, does not affect his 8 annas interest in the suit property and that his interest is not affected by the registered sale deed dated 3-4-74 executed by defendant No. 3 (appellant No. 3) in favour of defendants Nos. 1 and 2 (appellants 1 and 2) as also for declaration that he is entitled to exercise his right of pre-emption in respect of the share of appellant No. 3 in the suit property, that appellants Nos. 1 and 2 are not entitled to separate possession of specified portion of the suit property, and seeking their prohibition from entering upon such separate possession until the property is partitioned.
2. The plaintiff-respondent pleaded that appellant No. 3 is his adoptive mother and the appellants 1 and 2 are her sister's sons. The suit property is an area of 3.69 acres of land which stood recorded in the name of Digambar Thatoi who was the adoptive father of the plaintiff. Digambar Thatoi died in the year 1967 leaving behind him the plaintiff as the adopted son and his widow appellant No. 3. Dispute arose between the adopted son and the adoptive mother which led her to file of T.S.8/68 in the Court of the Munsif, Athagarh disputing the adoption of the plaintiff. The suit was compromised on 30-11-73 in which the appellant No. 3 acknowledged the plaintiff to be the adopted son of Digambar and in view of such acknowledgment, the appellant No. 3 (respondent) gave up his /8/ annas claim in the suit property and was granted only /4/ annas interest in the agricultural lands. The suit was decreed in terms of the compromise petition which also contained a clause that the plaintiff would get the same registered within 7 days failing which appellant No. 3 could get it registered after obtaining copy thereof. Subsequently, the appellant No. 3 executed a sale deed in favour of appellants Nos. 1 and 2. It is the plaintiffs case that since the compromise decree was not registered as per stipulation and that further since the properties involved in the compromise decree were beyond the subject-matter of dispute, the decree was compulsorily registrable under Section 17 of the Registration Act the time for which expired under Section 23 of the Registration Act on 31-3-74. The compromise decree having not been registered, it did not convey any title to the appellant No. 3 in respect of the plaintiffs share and there was no extinguishment of right, title and interest of the plaintiff in the suit property by virtue of the compromise decree.
3. The suit was jointly contested by the appellants contending that the plaintiff was bound by the compromise decree in pursuance of which the appellant No. 3 was in separate possession of her share and hence the alienation made by her in favour of the appellants Nos. 1 and 2 was valid and not entitled to be questioned by the respondent.
4. The learned Subordinate Judge trying the suit came to the conclusion that the compromise decree, Ext. 1 was not operative at all since it suffered from two defects, the first being that it had not been registered as stipulated in the terms of the compromise and that registration was compulsory in view of the fact that the property covered by it was not within the subject-matter of the suit, and secondly that the decree was a nullity having been passed by the Munsif who had a pecuniary jurisdiction of Rs. 4000/- only but that the property involved in the compromise was valued more than that He came to the further conclusion that the plaintiff is entitled to /12/ annas share in the property even though he had claimed /8/ annas share himself and that even though the plaintiff is estopped from challenging the title of the appellant No. 3 in respect of her /4/ annas share in the suit property, yet the sale deed executed by her in favour of appellants Nos. 1 and 2 in respect of the balance of the property is not binding on him. He also further held that the respondent was entitled to exercise a right of pre-emption in respect of the share of the appellant No. 3. The suit having been decreed on such findings, the defendants have come up in appeal.
5. Mr. Sk. Rahenoma, appearing for the appellants assails all the findings reached by the learned Subordinate Judge. It is contended by him firstly that the compromise decree, Ext. 1 is only a family arrangement between the appellant No. 3 and the respondent and hence being not compulsorily registrable, nonregistration of the decree does not in any way affect the validity of the compromise, secondly that the respondent is also bound by estoppel to question the validity of the compromise decree and that it is binding upon him and thirdly that the compromise decree is otherwise not registrable being covered by Exception VI to Section 17(2) of the Registration Act.
6. Before the respective contentions of the parties are considered, it is to be made clear that no argument has been advanced before me regarding the compromise decree being a nullity for want of pecuniary jurisdiction of the learned Munsif. Such a case had not been advanced in the plaint and has not been agitated before me rightly too by Mr. N. C. Pati, the learned counsel appearing for the respondent and hence I proceeded on the footing that there is no challenge to the decree on such count and the findings of the learned Munsif to such effect is not supported by the respondent.
7. A family arrangement or settlement may either be oral or may be reduced to writing and when it is oral the terms of the settlement may be subsequently recorded in a memorandum. The basic characteristic of a family settlement is that its object is to settle existing or future disputes regarding the property amongst the members of a family the consideration being the expectation that the settlement will result in establishing and ensuring amity and good will amongst the relations. 'Family' in a family settlement is not understood in the narrow sense of being a group of persons recognised by law as having right of succession or having a claim to share in the disputed property. The consideration of expectation having passed by each of the disputants the settlement, consisting of recognition of the right asserted by each other, cannot be impeached thereafter (vide AIR 1966 SC 323, Ram Charan Das v. Girja Nandini Devi). In an earlier decision AIR 1955 SC 481 (Sahu Madho Das v. Mukand Ram) dealing with the question the Supreme Court observed : --
'It is well settled that a 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. But in our opinion, the principle can be carried further and so strongly do the Court lean in favour of family arrangements that bring about harmony in a family and do justice to its various members and avoid, in anticipation, future disputes which might ruin them all, that we have no hesitation in taking the next step (fraud apart) and upholding an arrangement under which one set of members abandons all claims to all title and interest in all the properties in disputes and acknowledges that the sole and absolute title to all the properties resides in only one of their number (provided he or she had claimed the whole and made such an assertion of title) and are content to take such properties as are assigned to their shares as gifts pure and simple from him or her, or as a conveyance for consideration when consideration is present.'
The above was again reiterated in AIR 1966 SC 1836 (Maturi Pullaiah v. Maturi Narasimham) and thereafter in AIR 1976 SC 807 (Kale v. Dy. Director of Consolidation) it was held that the members who may be the parties to the family arrangement, while must have some antecedent titles, claim or interest and even a possible claim in the property, yet one of the parties to the settlement might have no title but under the arrangement if the other party relinquishes all claims or titles in favour of such a person and acknowledges him to be the sole owner, then antecedent title must be assumed and the family arrangement would be upheld.
8. In view of the position of law as found above, it cannot be seriously disputed that the compromise decree as in Ext. 1 was a family settlement between the appellant No. 3 and the respondent A dispute had arisen between the parties in which the very adoption of the respondent was questioned. The compromise in the suit was reached only after contest. Both the parties had undoubtedly antecedent title to the property or at least possibility of such antecedent title. The compromise was reached with a view to settle disputes so as to achieve peace and amity. It is thus without doubt that a family arrangement had been reached by the parties in the previous suit. Mr. N. C. Pati, the learned counsel for the respondent also accepts such fact. It is however hotly contended by him that even if it is accepted that the compromise decree was a family arrangement, yet nonetheless it remained a compulsorily registrable document, and without such registration it was ineffective. Mr. Rahenoma has placed reliance on two decisions of this Court to contend that family settlement does not need registration. In (1970) 36 Cut LT 501 (Ranjit Biswal v. Mst. Usha Sahoo) it was held by justices. K. Ray (as he then was) that Ext. F in that case was a memorandum of family settlement but not the basis of the rights of the parties and was only a document evidencing the transaction of family settlement. It did not bring about any transfer of property or create an interest in the property and hence was beyond the purview of Section 17 of the Registration Act. In (1971) 2 Cut WR 988 (Sukulata Mahunto v. Malati Dei) Justice R. N. Misra (as he then was) held, following AIR 1958 Andh Pra 147 (Yendapalli Venkataraju v. Yendapalli Yedukondalu) that a family arrangement does not require a document and that its aim being to set at rest competing claims amongst various members of the family to secure peace and amity, it is not required to be reduced in writing and even if it is embodied in a document it need not be registered. It would follow from this decision that a family arrangement does not require registration even if it is reduced to writing.
9. I am however afraid that the proposition cannot be so widely stated that a family arrangement, whenever it is recorded in writing, does not require registration. Section 17(1)(b) of the Registration Act requires any document which is of a value of more than Rs. 100/- and purports to create, declare, assign, limit or, extinguish either in the present or future any right, title or interest in immovable property to be compulsorily registrable.
If a family arrangement is in terms recorded in writing and purports to create or extinguish rights or otherwise is covered under the terms of Section 17(1)(b), then there is no reason why it would be beyond the pale of registration. The question was dealt with in AIR 1966 SC 1836 (Maturi Pullaiah v. Maturi Narasimham) where the document in question though was a family arrangement, was held to be one in which no division of property was brought about nor a division in status was made, and only provided that the terms therein relating to shares of the parties would be effective when the division takes place. It was held that the document did not create any interest in immovable property in praesenti in favour of the parties mentioned therein and hence was not a document hit by S, 17 of the Registration Act. The position was further clarified in AIR 1976 SC 807 (Kale v. Dy. Director of Consolidation) is as follows : -
'The family arrangements may be even oral in which case no registration is necessary;
It is well settled that registration would be necessary only if the terms of the family arrangement are reduced 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) (sic) (Section 17(1)(b)?) of the Registration Act and is, therefore, not compulsorily registrable.
It is thus now no longer in doubt that where a written document is itself not the document of settlement but is merely a memorandum or evidence of what has been settled, then it does not require registration because of itself it does not convey, create or extinguish any right, title and interest. But where it so constitutes the document itself to operate as creating or extinguishing the right or even enlarge or limit it, it cannot escape registration.
10. Mr. Rahenoma placed reliance on AIR 1966 SC 323 (supra) to contend that a family settlement does not require registration since it does not create any interest in property. A close reading of the decision however shows that the observations in that case were in relation to a document which admittedly did not involve any alienation or transfer of interest. Further the question whether a family arrangement in terms of a recorded writing requires registration or not was not before their Lordships and no such question was decided.
11. It is now to be seen whether Ext. 1 is the very terms of the family settlement or is only a memorandum of the settlement reached earlier. The recitals in the compromise petition, which has formed part of the decree, states that both the sides having, on the advice of well-wishers of both sides, sunk their differences in the suit, were compromising on the terms set out thereafter and that the compromise be treated as a part of the decree. In so far as the application states that the suit should be compromised in accordance with the terms contained in the application, it appears more probable that the application containing the terms was itself the settlement and was not merely a record of what had been settled earlier. Of course the appellant No. 3 in the written statement pleaded that the well-wishers of the parties brought about the family arrangement between them on terms as set out in para 13 thereof and that the suit was compromised on such terms but however no support is found for such plea in the evidence led. There is absolutely no evidence to show that there was any prior deliberation or meeting between the parties and the well-wishers where a settlement was reached and was later on reduced to writing, or that the compromise application is a record of such settlement. D.W. 2 is the only witness examined by the defendants-appellants on the question besides the evidence of defendant No. 3 herself as D.W. 3. It appears from the evidence of D.W. 2 that he is a person who was requested by the plaintiff-respondent to effect the compromise of the suit and that on his approach the appellant No. 3 agreed to the compromise and accordingly the suit was compromised. He was present when the compromise was effected in the court and that one Binaya Babu, Advocate for the appellant No. 3, gave out to her that the respondent would get 4 annas share out of the properties of Digambar and she will take the rest and on these terms she effected the compromise. This would suggest that the compromise was reached in the court itself where well-wishers were present the terms were made clear to the appellant No. 3, and on those terms she compromised the suit. In view of such conclusion it would follow that Ext. 1 if it would have been nothing more than a family arrangement, then it would have been a document compulsorily registrable.
12. It is however necessary to examine if Ext. 1, in so far as it is a compromise decree, is exempted from registration under the provisions of Section 17(2)(vi) which excepts any decree or order of a Court, which would naturally include a compromise decree, from registration but not so far as when the compromise decree comprises immoveable property other than that which is the subject-matter of the suit. Ext. 1 undoubtedly makes the compromise petition a part of the decree and the suit has been decreed in terms of the compromise petition. The learned Subordinate Judge came to the conclusion that the terms of the compromise decree covered properties beyond the subject-matter of the suit and hence it was not exempted from registration. The very first term of the petition is that the respondent, in view of the fact that the appellant No. 3 accepted him to be the Doyamushyana son being the adopted son of her late husband as also the son of his natural father Bholeswar Rout, and in view of the fact that he was also getting the properties of his natural father, he is to inherit, possess and enjoy only 1/4th interest of all the properties of his late adoptive father but however would have no right so far as the homestead is concerned. The residential house, homestead and the balance 3/4th interest of the property left by late Digambar Thatoi was to be possessed and enjoyed by the appellant No. 3 and that the respondent was disentitled to raise any claim in future in respect of the properties received by the appellant No. 3. The appellant No. 3 was to possess and enjoy all such properties independently in her own right and was authorised also to dispose of the property according to her wish.
13. The terms as above would show that the rights of the parties in respect of the properties were not independently dealt with bereft the question of settlement of the dispute regarding adoption. The very consideration for appellant No. 3 to accept the respondent as the adopted son of her late husband was the fact of his relinquishment of his claimed 8 annas interest and confining it to only 4 annas in agricultural lands and relinquishing all claims in respect of the residential house and the homestead. The compromise regarding the properties was essentially and intrinsically involved in compromise of the dispute of adoption. As a matter of fact, a declaration of adoption is primarily relevant in relation to the question of inheritance to the properties in the adoptive family. The compromise thus effected both in respect of the adoption as well as the properties, was one indivisible transaction and hence cannot be said to be not included in the subject-matter of the suit. It can be stated that where certain properties are involved in the compromise as the very consideration for reaching the compromise which is the subject-matter of the suit, the properties so involved are themselves within the ambit of 'subject-matter of the suit' within the meaning of Section 17(2)(vi) of the Registration Act and hence the decree would not require registration.
14. Considering the test to be applied as to whether any particular term in the compromise relates to the suit it was held in AIR 1948 Cal 179 (Byomkesh Mukherjee v. Bhupendra Narayan Sinha) that the question must be decided with reference to the frame of the suit, the relief calimed and the relief allowed by lawful agreement. No hard and fast rule can be laid down. It was observed : --
'As a general rule all the terms which form the consideration for the adjustment of the matters in dispute, whether they form the subject-matter of the suit or not, become related to the suit, and can be embodied in the decree.'
The same principle was adopted in AIR 1960 Patna 179 (Ramdas Sah v. Jagannath Prasad) where it was held : --
'The question whether a particular term of a compromise relates to the subject-matter of the suit is obviously a question to be answered on the frame of the particular suit, the relief claimed in the suit and the matters arising for decision on the pleadings of the parties. The term is comprehensive enough, and if the compromise relates to all the matters which fall to be decided in the case, it cannot be said that any part of the compromise is beyond the subject-matter of the suit.
In other words, where the compromise is really an adjustment of the rights and differences in respect of all matters in dispute between the parties and the compromise purports to be a final settlement and adjustment of these disputes on a fair and satisfactory basis acceptable to all, it must be held to relate to the suit....'
AIR 1971 Mad 182 (Pappu Reddiar v. Amaravathi Ammal) was a case in which the concerned decree covered items of immoveable properties which were not included in the plaint schedule. Despite such fact it was held that the words 'subject-matter of the suit' in Section 17(2)(vi) was not the same thing as subject-matter of the plaint or subject-matter of dispute. It was observed : --
'But the Courts below were of the view, and we think rightly, that in the instant case, although the properties in dispute were not mentioned in the plaint schedule in O.S. No. 76 of 1948, nevertheless, they should be regarded as the subject-matter of that suit, inasmuch as their allotment to one or the other of the plaintiffs in the suit was inseparable from the other provisions of the compromise decree and constituted part of the consideration for the compromise. We think that this is a correct view to take. The words 'the subject-matter of the suit' in Section 17(2)(vi) cannot be read as subject-matter of the plaint nor even as subject-matter in dispute in the suit or proceeding. If the consent decree or order in the suit or proceeding covered the property, although it was not in the plaint or in dispute, such property constituting, as it does, an inseparable part of the consideration for the compromise, may well, in our view, be regarded as the subject-matter of the suit. This is because the decree passed on the basis of the compromise cannot stand without the property.'
It thus appears that the correct test to apply in considering whether the property involved in the compromise decree is within the subject-matter of the suit is to see the compromise decree as a whole and find out whether the involvement of such property is a consideration for the compromise of the dispute itself and that whether the decree passed on the basis of the compromise can stand if such property is deleted from it. Applying such test, it is without doubt that the agreement regarding the properties was itself the consideration for the compromise of the dispute relating to adoption and hence it has to be held that the compromise decree in Ext. 1 did not require any compulsory registration.
15. In the premises of the discussion as above, I have no hesitation to hold that the compromise decree in Ext. 1 was fully operative between the parties and that it fully recognised the right of the appellant No. 3 to enjoy and possess her share of the properties and to also make a conveyance of it.
16. A further question was raised by Mr. Pati that even if the appellant No. 3 would have the right to dispose of the property, yet it is subject to Section 22 of the Hindu Succession Act which, in the event of a sale, confers a preferential right on the plaintiff-respondent to purchase the same and that the properties were to have been first offered to him for purchase before it could be sold to appellants Nos. 1 and 2. The preferential right under Section 22 of the Hindu Succession Act is an optional right available to that heirs in the Class I schedule. There is nothing in the Section which prevents a person entitled to claim such right to waive it. Ext. 1 itself embodies the conditions not only that the respondent would not in future lay any kind of claim in respect of the properties left to the share of the appellant No. 3, but also conceding absolutely to a right of alienation in accordance with her wish. This in itself would mean that the property can be alienated by her contrary to the provisions of Section 22 of the Hindu Succession Act so far as the right of the respondent is concerned and hence the submission must be accordingly negatived.
17. In the result, the appeal is allowed. The judgment and decree passed by the learned Subordinate Judge is set aside and the suit is dismissed with costs.