1. Suit for declaration of title under a Deed of Family Settlement for property distribution among siblings after intestate death. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 )
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2024 Supreme(Online)(DEL) 2272
HIGH COURT OF DELHI
Neena Bansal Krishna, J
Kamla Varma – Appellant
Versus
Surendra Pal Singh – Respondent
CS(OS) 71/2020|I.A. 2382/2020
Advocates:
For the Appellants/Petitioners: Deepak Jakhar
For the Respondents: None
For the Appellants/Petitioners: Deepak Jakhar
For the Respondents: None
An unregistered family settlement deed is binding and exempt from mandatory registration under Section 17(2)(v) of the Registration Act, 1908, if it merely records a bona fide agreement to distribute pre-existing rights among heirs and has been acted upon by the parties, triggering the rule of estoppel.
Headnote:(A) Civil Procedure Code, 1908 - Sections 9 and 151 - Specific Relief Act, 1963 - Section 34 - Registration Act, 1908 - Section 17(2)(v) - Family Settlement - Suit for Declaration regarding residential property and bank funds - A family arrangement is an agreement between members of the same family intended for the benefit of the family by compromising doubtful rights or avoiding litigation (Paras 17-19). A written memorandum of a family arrangement is exempt from mandatory registration under Section 17(2)(v) of the Registration Act, 1908, if it does not create, declare, assign, limit, or extinguish any right in immovable property but merely records an existing oral agreement or past transactions (Paras 20-23). The rule of estoppel prevents a party who has derived benefits under a family settlement from subsequently challenging its validity or resiling from the arrangement (Paras 25-28).
Facts of the case:
Four sisters filed a suit for declaration against their brother seeking rights to residential property No. A-27, Vivek Vihar, Phase-I, Delhi, and specific bank funds based on a Deed of Family Settlement dated 10.04.2015 executed after their father's intestate death. Under the deed, the defendant was to inherit agricultural land and certain bank accounts, while the plaintiffs were to inherit the residential property and other bank funds. The defendant acted upon the deed to transfer the agricultural land to his name but subsequently refused to provide the No Objection Certificate (NOC) required for the plaintiffs to mutate the residential property in their names.
Findings of Court:
The Court found that the Deed of Family Settlement was a bona fide agreement between siblings to resolve inheritance. Since the parties had pre-existing rights as legal heirs, the document merely recorded the distribution of these shares and did not create new rights for the first time. Therefore, it fell under the exception of Section 17(2)(v) of the Registration Act, 1908, and did not require mandatory registration. Furthermore, since the defendant had already benefited by transferring the agricultural land to his name, he was estopped from denying the validity of the agreement.
Issues: Whether the Deed of Family Settlement dated 10.04.2015 required mandatory registration under the Registration Act, 1908, and whether the said deed was binding on the parties.
Ratio Decidendi: A family settlement deed that records an equitable division of properties among heirs based on pre-existing titles and is acted upon by the parties is binding and does not require registration if it acts as a memorandum of an already concluded arrangement rather than a document creating new rights.
Result: Suit decreed.
Legal Category Hierarchy
- practice and procedure
- property law
- evidence law
Table of Contents
2. Plaintiffs sought enforcement of the family settlement; defendant, having benefited, refused to honour his part, leading to the suit. (Para 4 , 5 , 6 , 7 , 8 )
3. The family settlement was bona fide, acted upon, and only recorded pre-existing rights, thus exempt from compulsory registration. (Para 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 )
4. A family settlement recording an already-agreed distribution of shares is binding and does not require registration if it does not create new rights. (Para 20 , 21 , 23 , 24 , 35 , 36 , 37 )
5. Suit decreed: declared plaintiffs as owners of suit property and banks directed to release funds per the family settlement. (Para 41 , 42 , 43 )
6. Does a Deed of Family Settlement require compulsory registration under the Registration Act, 1908?
No, if it merely records an already agreed equitable distribution of shares and does not create new rights, it is exempt from registration. (Para 20 , 21 , 22 , 23 , 24 , 34 , 35 , 36 , 37 )
7. Is a family settlement binding on parties who have acted upon it and benefited from it?
Yes, a family settlement acted upon by the parties operates as an estoppel, preventing a party from challenging it after taking benefits. (Para 25 , 26 , 27 , 28 , 29 , 30 , 39 , 40 )
8. What distinguishes a compulsorily registrable deed from a mere memorandum of a family settlement?
A document creating or extinguishing rights requires registration; a memorandum recording past transactions or agreed shares does not. (Para 20 , 21 , 23 , 24 , 35 , 36 )
JUDGMENT
NEENA BANSAL KRISHNA, J.
Wisdom amongst siblings to amicably settle property issues through Family Arrangements/Settlements ironically fades when the one who has reaped material benefits, denies to honour his part of the bargain, leading to other siblings to unnecessary litigation.
1. The present Suit under Section 9 and 151 of the Civil Procedure Code, 1908 (hereinafter referred to as "CPC, 1908") read with section 34 of the Specific Relief Act, 1963 (hereinafter referred to as "Act, 1963") has been filed by the four plaintiffs/sisters against their brother/defendant, seeking a Declaration that by virtue of the Deed of Family Settlement dated 10.04.2015, the four plaintiff-sisters have become the jointly owners of property No.A-27, Vivek Vihar, Phase-I, Delhi (hereinafter the "Suit Property") and monies as well as FDRs in certain bank accounts, to the exclusion of the defendant. Mandate is also sought to the banks for release of the said monies/funds in the respective accounts of the parties as per the terms of the Deed of Family Settlement dated 10.04.2015.
2. It is briefly stated that the father of the parties, Late Sh. H. S. Verma died intestate on 29.03.2015, whereas his wife had predeceased him on 19.12.2010, leaving behind their movable and immovable properties to their four daughters namely, Sh. Kamla Varma/Plaintiff no. 1, Sh. Suresh Kumari/Plaintiff no. 2, Sh. Saroj Kumari Bhumbla/ Plaintiff no. 3, Sh. Veena Gupta/Plaintiff no. 4 and one son Sh. Surendar Pal Singh/ Defendant.
3. Late Sh. H.S. Verma left behind the following movable and immovable properties :-
a) Agricultural land at village Inayatpur, Tehsil, Ghaziabad;
b) Freehold residential property at A-27, Vivek Vihar, Phase-I, Delhi-110095;
c) Balances in the following Bank Accounts :-
| 1. | Canara Bank A/C NO.24575, Branch: D-5, D Block Market, Vivek Vihar, Delhi |
| 2. | Bank of Maharashtra A/C NO.20075118382, Branch:C-2, Vivek Vihar, Delhi |
| 3. | Bank of Maharashtra A/C NO.20075176740, Branch:C-2, Vivek Vihar, Delhi |
| 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, de
