Bandikatla Padmavathi Vs. Bandikatla Veera Brahma Chari and Others - Court Judgment

This Civil Revision Petition arises out of order dated 14-9-2009 in O.S.No.193/2002 on the file of the learned Principal Senior Civil Judge, Narasaraopet.

For convenience, the parties are referred to as they are arrayed in the suit.

During the course of evidence, defendant No.1 sought to present two documents in evidence. They are, document dated 29-4-1989, styled as family settlement arrangement and document dated 29-9-1989, styled as an arrangement. The plaintiff objected to the marking of these documents on the ground that they are in the nature of settlement deeds which create rights in the parties and therefore, they require stamp duty and registration. The lower Court has sustained the objection with reference to document dated 29-4-1989 and rejected the objection relating to document dated 29-9-1989. Feeling aggrieved by the said order to the extent of refusing to receive the document dated 29-9-1989, defendant No.1 filed the present Civil Revision Petition.

At the hearing, Sri G.L.V. Ramana Murthy, learned counsel for defendant No.1, submitted that the document in question is a mere family arrangement which was reduced into writing what family members of defendant No.1 have earlier agreed to. According to the learned counsel, such an arrangement, though reduced into writing, is not liable for payment of stamp duty and registration. In support of his submission, the learned counsel placed reliance on Krishna Beharilal (dead) by his legal representatives Vs. Gulabchand and others (AIR 1971 S.C. 1041), Hansa Industries (P) Ltd. and others Vs. Kidarsons Industries (P) Ltd. (AIR 2007 S.C. 18), Govt. of A.P. and others Vs. M. Krishnaveni and others (2006(7) SCC 365)and The Board of Revenue, Madras Vs. M. Swaminatha Chettiar (AIR 1980 Madras 97 (FB). Opposing the above contentions, Sri Srinivas Karra, learned counsel for the respondents, placed reliance on the Judgment of this Court in K.T. Afzal Khan Vs. Kunsetty Ramesh Babu and others (2005(1) ALT 696).

In order to resolve this controversy, it is necessary to refer to the relevant recitals of the document in question. As observed by the lower Court, the nomenclature of the document is described as family settlement arrangement. This agreement was entered into between the husband of defendant No.1, her mother-in-law and her brother-in-law, the plaintiff. It is recited in the said document that the father-in-law of defendant No.1 i.e., the father of the plaintiff and the husband of defendant No.1, has got certain properties in family partition and a partition deed was registered on 4-8-1969 and that he has executed a Will giving life estate over 1/3^rd of his share to his wife and the vested remainder in equal proportions to his sons, the plaintiff and the husband of defendant No.1. It is further recited that the mother-in-law of defendant No.1 has executed a Will on 24-6-1973 in respect of her self-acquired property as well as the properties inherited by her from her husband, in favour of the plaintiff and the husband of defendant No.1 and that as joint rights were created in their favour in the said Will and the mother-in-law of defendant No.1 has anticipated future disputes between the two brothers and in order to avoid such disputes, the rights were created in the plaintiff and the husband of defendant No.1 and the settlement arrangement is reduced to writing. It is also recited at the end of the document that depending upon the convenience of the parties, the family settlement will be registered in future.

Ordinarily, a document which conveys rights over immovable property worth Rs.100/- and above requires registration under the provisions of Section 17(1)(b) of the Registration Act, 1908. The question that requires to be considered in this case is whether such rights have been created in the parties by the family arrangement in question. The crucial words at page-2 of the document dated 29-9-1989, in Telugu vernacular, assume much significance. When translated, they read as under :

“In the will executed and registered by the first party among us, joint rights were created in party Nos.2 and 3 over the immovable properties; that party No.1 anticipated disputes between the legatees in future and therefore after creating rights in party Nos.2 and 3 over the properties inherited by party No.1 from her husband and also her self-acquired properties, the settlement is reduced to writing”.

These recitals in my opinion in unequivocal terms refer to creation of rights by party No.1 i.e., mother-in-law of defendant No.1, in favour of the plaintiff and his brother i.e., husband of defendant No.1, in the past itself and the purpose of this document was only to reduce the said arrangement into writing. This document therefore is intended to record the past arrangement. The subsequent recitals also in unambiguous terms refer to the previous agreement among the parties.

In Kale Vs. Deputy Director of Consolidation (1976) 3 SCC 119), the Supreme Court held that the family arrangements are governed by special equity peculiar to themselves and would be enforced if honestly made. After making extensive reference to the case law, the Supreme Court deduced the following principles:

(1) The family settlement must be a bona fide one so as to resolve family disputes and rival claims by a fair and equitable division or allotment of properties between the various members of the family;

(2) The said settlement must be voluntary and should not be induced by fraud, coercion or undue influence;

(3) The family arrangement may be even oral in which case no registration is necessary;

(4) 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 registerable;

(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.”

The above Judgment was referred to and the principles therein were reiterated in HansaIndustries (P) Ltd. (2-supra). In para-14 of the Judgment, the Supreme Court, while referring to the Judgment in Kale (6-supra) held as under :

“The aforesaid judgment of this Court refers to many other decisions to which we need not advert to in this case but some of those decisions do take the view 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 recognizing the rights 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.”

The Judgment in Kale (6-supra) was further followed in Government of A.P. (3-supra). With reference to the said Judgment, the Supreme Court observed as under :

“….It is well settled that a document which is in the nature of a memorandum of family arrangement and which is filed before the Court for its information for mutation of names, is not compulsorily registerable and, therefore, can be used in the evidence of the family arrangement and is final and binding on the parties (See Kale and ors. Vs. Deputy Director of consolidation and others (1976(3) SCC 119). Further, it was held in the cited decision that the object of the family arrangement is to protect the family from long-drawn litigation or perpetual strifes, which mar the unity and solidarity of the family and create hatred and bad blood between the various members of the family. It promotes social justice through wider distribution of wealth. Family, therefore, has to be construed widely. It is not confined only to people having legal title to the property.”

In SahuMadho Das Vs. Mukund Ram (AIR 1955 S.C. 481), the Supreme Courtheld:

“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 they had previously asserted, to the portions allotted to them respectively. That explains why no conveyance is required in these cases to pass the title from the one on 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.”

After referring to the Judgment in SahuMadho Das (7-supra), the Supreme Court in ShambhuPrasad Singh Vs. Most. Phool Kumari (AIR 1971 S.C. 1337), observed at para-10, as under :

“The arrangement under challenge has to be considered as a whole for ascertaining whether it was made to allay disputes, existing or apprehended, in the interest of harmony in the family or the preservation of property. It is not necessary that there must exist a dispute, actual or possible in the future, in respect of each and every item of property and amongst all members arrayed one against the other. It would be sufficient if it is shown that there were actual or possible claims and counterclaims by parties in settlement whereof the arrangement as a whole had been arrived at, thereby acknowledging title in one to whom a particular property falls order the assumption (not actual existence in law) that he had an anterior title therein.”

On a careful application of the case law referred to above to the present case, I have no doubt in my mind that the document in question clearly shows that the title already came to be resided in the plaintiff and the husband of defendant No.1 and that the past arrangement was merely reduced into writing to avoid disputes in future. This being the predominant object in the execution of the document, if certain rights are purported to be conferred on one party and such rights are relinquished by another party under the said document, the antecedent title must be assumed and the family arrangement will be upheld as held in Kale (6-supra). Therefore, a stray recital which may give an impression that the rights are for the first time conferred on the parties would not eclipse the predominant object with which the family settlement was reduced to writing.

On the above analysis, I am of the opinion that the document dated 29-9-1989 is a family arrangement which merely reduced into writing the previous arrangement made by the mother-in-law of defendant No.1 i.e., mother of the plaintiff and the husband of defendant No.1, and that it does not require any registration. The lower Court has committed a serious error in refusing to admit the said document in evidence. The order under revision is accordingly set-aside and the lower Court is directed to admit the document dated 29-9-1989 into evidence.

The Civil Revision Petition is accordingly allowed.

As a sequel, C.R.P.M.P.No.7363/2009 is disposed of as infructuous.