KHUSHI RAM & ORS. versus NAWAL SINGH & ORS.

[2021] 4 S.C.R. 1019

KHUSHI RAM & ORS.

NAWAL SINGH & ORS.

(Civil Appeal No. 5167 of 2010)

FEBRUARY 22, 2021

[ASHOK BHUSHAN AND R. SUBHASH REDDY, JJ.]

Hindu Succession Act, 1956 – s.15 – Succession – Propertiesinherited by female Hindus – “Family” – Family settlement – ‘J’, awidow inherited share of her late husband in the land in question –Family settlement – She gave said share to her nephews-respondents(her brother’s sons) – Respondents filed suit against ‘J’ claimingdecree of declaration as owners in possession thereof – Respondents’claim accepted by her, consent decree passed in favour ofrespondents – Appellants (descendants of J’s late husband’s brother)filed suit inter alia for declaring the decree invalid – Dismissed –First and second appeals were also dismissed – Held: s.15(1)(d)indicates that heirs of the father of female are covered in theheirs who can succeed – Thus, it cannot be held that the respondentswho were J’s nephews were strangers and not the members of thefamily qua her – Further, she was the absolute owner when sheentered into settlement – All the Courts rightly dismissed the suit ofthe appellants, which need no interference – Indian RegistrationAct, 1908 – s.17(2)(vi).

Indian Registration Act, 1908 – s.17(1)(b), 17(2)(vi) – Consentdecree passed on the basis of family settlement, if requiredregistration – Held: Issue in the present case is squarely covered bythe judgment in Mohammade Yusuf & Ors. v. Rajkumar & Ors.reported as 2020(3) SCALE 146 wherein it was held that since thedecree which was sought to be exhibited was with regard to theproperty which was subject matter of suit, hence, was not coveredby exclusionary clause of s.17(2) (vi) and did not require registration– In the present case also, the consent decree related to the subjectmatter of the suit, thus was not required to be registered u/s.17(2)(vi)– Courts below rightly held that the decree did not requireregistration.

AWords & Phrases – “Family” – Concept of – Discussed.

Dismissing the appeal, the Court

HELD : 1.1 There is no dispute that in the earlier CivilSuit No.317 of 1991 in which consent decree was passed on19.08.1991, the subject matter of suit was the agricultural landBsituated in Village Garhi, Bajidpur. Further the suit was decreedon the written statement filed by Smt. ‘J’ (the widow) acceptingthe claim of plaintiffs that there was family settlement betweenthe parties in which the half share in the land was given to theplaintiffs of Civil Suit No.317 of 1991. [Para 12][1027-E-F]

1.2 In Mohammade Yusuf & Ors. Vs. Rajkumar & Ors.this Court held that since the decree which was sought to beexhibited was with regard to the property which was subject matterof suit, hence, was not covered by exclusionary clause of Section17(2) (vi) and decree did not require registration. The issue inDthe present case is squarely covered by the said judgment. Inview of the fact that the consent decree dated 19.08.1991 relateto the subject matter of the suit, hence it was not required to beregistered under Section 17(2) (vi). The consent decree dated19.08.1991 was not registrable and Courts below rightly held thatthe decree did not require registration. [Para 20][1036-G-H; 1037-

Mohammade Yusuf & Ors. v. Rajkumar & Ors. 2020(3) SCALE 146 – relied on.

2.1 It is necessary to find out what is the concept of familyFwith regard to which family settlement could be entered. Everyparty taking benefit under family settlement must be related toone another in some way and have possible claim to the propertyor claim or even semblance of claim. Term “family” has tobe understood in wider sense so as to include within its fold notonly close relations or legal heirs but even those persons whoGmay have some sort of antecedent title, semblance of claim oreven if they have spes successionis. [Paras 22, 23][1037-C-D;1038-A-B]

Ram Charan Das v. Girjanandini Devi and Ors. [1965]3 SCR 841; Kale and Ors. v. Deputy Director of

Consolidation and Ors., (1976) 3 SCC 119 : [1976] 3SCR 202 – relied on.

2.2 The defendants-respondents were nephews, i.e.,brother’s sons of Smt. ‘J’. The Hindu Succession Act, 1956,Section 15, deals with the general rules of succession in the caseof female Hindus for properties inherited by female Hindus, whichare devolved in according to Sections 15 and 16. perusal ofSection 15(1)(d) indicates that heirs of the father are covered inthe heirs, who could succeed. When heirs of father of femaleare included as person who can possibly succeed, it cannot beheld that they are strangers and not the members of the familyqua the female. ‘Smt. J’, who as widow of ‘SS’, who had died in1953, had succeeded to half share in the agricultural land andshe was the absolute owner when she entered into settlement.No merit in the submission that the defendants-respondents werestrangers to the family. All the Courts have rightly dismissed thesuit of the plaintiffs-appellants, which need no interference. [Paras26-29][1042-F-G; 1043-B-E]

Mata Deen v. Madan Lal & Ors. Decision of SupremeCourt in Civil Appeal No. 890 of 2008 – heldinapplicable.

K. Raghunandan and Ors. v. Ali Hussain Sabir and Ors.(2008) 13 SCC 102 : [2008] 8 SCR 657 – relied on.

Bhoop Singh Vs. Ram Singh Major and Ors., (1995) 5SCC 709 : [1995] 3 Suppl. SCR 466, Som Dev andOrs. v. Rati Ram and Anr., (2006) 10 SCC 788 : [2006]5 Suppl. SCR 778 – referred to.

ACIVIL APPELLATE JURISDICTION: Civil Appeal No. 5167of 2010.

From the Judgment and Order dated 16.04.2009 of the High Courtof Punjab & Haryana at Chandigarh in RSA No. 750 of 2002.

Manoj Swarup, Sr. Adv., Ranbir Singh Yadav, Prateek Yadav,BMrs. Pratima Yadav, Rohit Kumar Singh, Advs. for the appearing parties.

The Judgment of the Court was delivered by

ASHOK BHUSHAN, J.

1. This appeal has been filed by the plaintiffs of Civil Suit challengingCthe judgment dated 16.04.2009 of High Court of Punjab & Haryanadismissing the second appeal filed by the appellant.

2. The brief facts of the case as emerged from the pleadings ofthe parties are:

2.1One Badlu, who was the tenure-holder of agricultural landDsituate in Village Garhi Bajidpur, Tehsil and District Gurgaon,had two sons Bali Ram and Sher Singh. Sher Singh died inthe year 1953 issueless leaving his widow Smt. Jagno.

2.2Plaintiffs-appellants are descendents of Bali Ram. Afterdeath of Sher Singh, his widow inherited share of her lateEhusband, i.e., the half of the agricultural property owned byBadlu. Civil Suit No.317 of 1991 was filed by NawalSingh and two others against Smt. Jagno in the Court ofSub-Judge, Gurgaon claiming decree of declaration asowners in possession of the agricultural land mentioned inFthe suit to the extent of half share situate in Village GarhiBajidpur. The plaintiffs claim was that Smt. Jagno, whowas sharer of the half share, has in family settlementsettled the land in favour of the plaintiffs, who were thebrother’s sons of Smt. Jagno.

G2.3Smt. Jagno filed written statement in the suit admittingthe claim of the plaintiffs. Smt. Jagno also made statementin the suit accepting the claim of plaintiffs, the trial courtvide its judgment and decree dated 19.08.1991 passed theconsent decree in favour of the plaintiffs declaring theplaintiffs owners in possession of the half share in the land.H

2.4The plaintiffs, who were descendents of brother of husbandof Smt. Jagno filed Civil Suit No.79 of 1991 in the Courtof Senior Sub-Judge Gurgaon praying for declaration thatthe decree passed in Civil Suit No.317 of 1991 dated19.08.1991 is illegal, invalid and without legal necessity. Theplaintiffs also claimed decree of declaration in their favourdeclaring them owners in possession of land in question. InSuit No.79 of 1991, joint written statement was filed bythe defendants. Smt. Jagno was also defendant No.4 in thecivil Suit No.79 of 1991. The defendants supported thedecree dated 19.08.1991. The defendants No.1 to 3 claimedland by family settlement out of love and affection by thedefendant No.4, which family settlement was duly affirmedby Civil Court decree dated 19.08.1991.

2.5The trial court framed nine issues. Issue No. 5 being“Whether the decree dated 19.08.1991 passed in civil suitno.317/91 titled Nawal Singh Etc. Vs. Smt. Jagno passedby Sh. K.B. Aggarwal SJIC, Gurgaon is illegal, invalidwithout jurisdiction and against custom, without legalnecessity and consideration and result of fraud and undueinfluence and is liable to be set aside?

2.6Issue Nos. 2 to 5 were answered in favour of defendants.The trial court also rejected the argument of the plaintiffsthat in absence of registration of decree, no right or titlewould pass in favour of the defendants. Trial court heldthat registration is required when fresh rights are createdfor the first time by virtue of decree itself. It was held thatin the case in hand, defendants were having pre-existingright in the suit property under as in family settlementdefendant No.4 acknowledged them as owner andsurrendered the possession of the suit property in their favourat the time of family settlement and the decree dated19.08.1991 merely affirms their pre-existing rights andhence, does not require registration.

2.7The plaintiffs aggrieved by the judgment filed first appealbefore the learned District Judge, which too was dismissed.The First Appellate Court held that under Section 14(1) ofthe Indian Succession Act, Hindu female become full owner

ABC

Aof the property, which she acquires before thecommencement of the Act and not as limited owner. TheFirst Appellate Court also held that defendants being nearrelations of defendant No.4, they cannot be said to bestrangers to her. First Appellate Court also held that decreedid not require registration. The findings of the trial courtBwere affirmed by the First Appellate Court dismissing theappeal. Aggrieved against the judgment of the FirstAppellate Court, the plaintiffs filed R.S.A. No.750 of 2002.Second appeal was admitted on following question of law:-

“Whether in the absence of any pre-existing right withCthe defendant- respondents 1 to 3, decree ( ExhibitP.2) suffered by Jagno (who is father’s sister ofdefendant- respondent) required registration underSection 17(1) of the Indian Registration Act, 1908?”

2.8The High Court answered the above question of law againstDthe plaintiffs and in favour of the defendants-respondents.The High Court held that judgment and the decree renderedin Civil Suit No.317 of 1991 dated 19.08.1991 merelyrecognise the existing right which was created by the oralfamily settlement. High Court further held that apart fromErelationship of Smt. Jagno with defendants-respondents 1to 3, she has developed close affinity, love and affection fordefendant respondent Nos.1 to 3 as per the findings recordedby the learned Courts below. The High Court dismissed thesecond appeal, aggrieved against which judgment, this appealhas been filed.F3. We have heard Shri Ranbir Singh Yadav, learned counsel forthe appellant and Shri Manoj Swarup, learned senior counsel for therespondent.

4. Learned counsel for the appellants, Shri Yadav submits that noGfamily settlement could have been entered by Smt. Jagno in favour ofdefendant Nos.1 to 3, they being strangers to the family. Hindu widowcannot constitute Joint Hindu Family with the descendants of her brother,i.e., her parental side. Family settlement can take place only betweenmembers, who have antecedent title or pre-existing right in the propertyproposed to be settled. Smt. Jagno could have transferred her absoluteHshare in favour of the respondents or to any stranger only in accordance

with law by complying with the provisions of the Transfer of PropertyAct, 1882, the Indian Registration Act, 1908 and the Indian Stamp Act,1899. Learned counsel further contends that registration of compromisedecree was compulsory by virtue of Section 17 of the Indian RegistrationAct and the decree dated 19.08.1991 having not been registered, it didnot confer any valid title to the defendant Nos.1 to 3. All the Courtsbelow committed error in upholding the decree dated 19.08.1991 whereasthe decree being an unregistered decree was liable to be ignored anddeclared in operative.

5. Shri Manoj Swarup, learned senior counsel for the respondentsrefuting the submissions of the learned counsel for the appellant contendsthat defendant Nos.1 to 3 had pre-existing right in the suit property,which was clear from the pleadings of Civil Suit No.317 of 1991. In theabove suit, it was categorically pleaded that family settlement/arrangement took place about two years back and since then plaintiffsare owners in possession of land and defendant No.4 had relinquishedall her rights therein.

6. It is submitted that decree passed in the Civil Suit dated19.08.1991 only declared the existing rights of the defendant Nos.1 to 3,which was based on the family settlement. It is submitted that thedefendant Nos.1 to 3 being brother’s sons of Smt. Jagno, they were notstrangers to Smt. Jagno and family settlement could have been verywell entered by Smt. Jagno with them. It is submitted that the expression“family” for the purpose of family settlement is not to be given anynarrow meaning; it should be given wide meaning to cover the members,who are by any means related. It is further submitted that the decreedated 19.08.1991 did not require any registration under Section 17 of theIndian Registration Act, 1908. The decree was passed with regard tosubject matter of the suit property, it was exempted from registration byvirtue of Section 17(2)(vi) of the Indian Registration Act, 1908. ShriSwarup further contends that the family settlement could have beenmade out of love and affection with regard to which there was amplepleading in the Civil Suit No.317 of 1991 and out of love and affectiondefendant No.4, Smt. Jagno could have very well settled the propertiesin favour of defendant Nos.1 to 3, her nephews being brother’s sons.

7. Learned counsel for the parties have relied on judgments ofthis Court for their respective submissions, which shall be referred towhile considering the submissions in detail.

8. The Civil Suit No.79 of 1991, which gives rise to this appealwas suit where following reliefs were claimed by plaintiffs-appellants:-

“10. That the plaintiffs, therefore, pray that decree for declarationto the effect that the decree in question passed in Civil Suit No.317of 1991 dated 19.8.1991 is illegal, invalid, without legal necessityBand consideration on the grounds stated above in the plaint, andthe same does not convey any title in favour of the defendantsNo.1 to 3 and does not effect any reversionary rights of the plaintiffsand the plaintiffs are owners in possession of the land in question,fully detailed and described in para no.3 of the plaint above, withconsequential relief of permanent injunction restraining theCdefendants further alienating the land in question to anyone else,may kindly be passed in favour of the plaintiffs and against thedefendants with costs of this suit.

Any other relief which this Hon’ble Court may deems fit andproper may also be granted to the plaintiffs.”D

9. There is no dispute between the parties that Shri Sher Singh,husband of Smt. Jagno had half share in the agricultural land situate invillage Garhi Bajidpur, which was suit property. Sher Singh died in 1953.Smt. Jagno after enforcement of the Hindu Succession Act, 1956 byvirtue of Section 14 became the absolute owner of the half share of theEsuit property. The bone of contention between the parties centres roundthe decree dated 19.08.1991 passed by the Sub-Judge in Civil Suit No.317of 1991 filed by defendant Nos.1 to 3 against Smt. Jagno seekingdeclaration that they are owners in possession of the suit land. In CivilSuit No.317 of 1991, following was pleaded in paragraphs 2 and 3:-F“2.

“2. That the parties are closely related to each other, the plaintiffsare nephews of the deft and constituted Joint Hindu Family.The deft Smt. Jagno Devi is the daughter of Sh. Shib Lal, thegrand father of the plaintiffs.

3. That the defendant is living with the plaintiffs at VillageGChakerpur and the plaintiffs are looking after her in her old ageand the deft has no issue. The deft is very happy with the servicesof the plaintiff rendered to her and out of love and affection, thedeft had allotted the above mentioned land to the plaintiffs in equalshare in family settlement /arrangement, which took place about2 years back and since then the plaintiffs are owners in possessionHof the said land and the deft had relinquished all rights therein.”

10. In the aforesaid suit, written statement was filed by Smt. Jagnoadmitting the claim of the defendants. The trial court in its decree dated19.08.1991 held following in paragraph 2:-

“2. The defendant appeared and filed written statement admittingin toto the claim of the plaintiffs. Statements of the parties werealso recorded. In view of the written statement and statements ofparties, consent decree in favour of the plaintiffs and againstthe defendant is passed for declaration as prayed for, leaving theparties to bear their own costs. Decree sheet be prepared and filebe consigned to the record room.”

11. In this appeal, following two questions arise for consideration:-

(1) Whether the decree dated 19.08.1991 passed in Civil SuitNo.317 of 1991 requires registration under Section 17 of theIndian Registration Act, 1908?; and

(2) Whether the defendant Nos.1 to 3 were strangers todefendant No.4 so as to disable her to enter into any familyDarrangement with defendant Nos.1 to 3?

Question No.(1)

12. There is no dispute that in the earlier Civil Suit No.317 of 1991in which consent decree was passed on 19.08.1991, the subject matterof suit was the agricultural land situated in Village Garhi, Bajidpur. Furtherthe suit was decreed on the written statement filed by Smt. Jagnoaccepting the claim of plaintiffs that there was family settlement betweenthe parties in which the half share in the land was given to the plaintiffsof Civil Suit No.317 of 1991. The question is as to whether the decreepassed on 19.08.1991 required registration under Section 17 of the IndianRegistration Act, 1908. Sections 17(1) and 17(2)(vi), which are relevantfor the present case, are as follows:-

“17. Documents of which registration is compulsory.—(l)The following documents shall be registered, if the property towhich they relate is situate in district in which, and if they havebeen executed on or after the date on which, Act No. XVI of1864, or the Indian Registration Act, 1866, or the IndianRegistration Act, 1871, or the Indian Registration Act, 1877, orthis Act came or comes into force, namely:—

A(a) instruments of gift of immovable property;

(b) other non-testamentary instruments which purport or operateto create, declare, assign, limit or extinguish, whether in presentor in future, any right, title or interest, whether vested or contingent,of the value of one hundred rupees and upwards, to or inimmovable property;

(c) non-testamentary instruments which acknowledge the receiptor payment of any consideration on account of the creation,declaration, assignment, limitation or extinction of any such right,title or interest; and

(d) leases of immovable property from year to year, or for anyterm exceeding one year, or reserving yearly rent;

(e) non-testamentary instruments transferring or assigning anydecree or order of Court or any award when such decree ororder or award purports or operates to create, declare, assign,limit or extinguish, whether in present or in future, any right, titleor interest, whether vested or contingent, of the value of onehundred rupees and upwards, to or in immovable property:]

Provided that theState Government may, by order publishedin the Official Gazette, exempt from the operation of this sub-section any lease executed in any district, or part of district, theterms granted by which do not exceed five years and the annualrents reserved by which do not exceed fifty rupees.

XXXXXXXXXXXXXXXXXX

(2) Nothing in clauses (b) and (c) of sub-section (l) applies to—

(vi) any decree or order of Court except decree or orderexpressed to be made on compromise and comprising immovableproperty other than that which is the subject-matter of the suit orproceeding; or

GXXXXXXXXXXXXXXXX”

13. The submission of the learned counsel for the appellant is thatthere was no existing right in the plaintiffs of Civil Suit No.317 of 1991,hence the decree dated 19.08.1991 required registration under Section17(1)(b) since decree created right in favour of the plaintiffs. In support

of his submission, he has placed reliance on judgment of this Court inBhoop Singh Vs. Ram Singh Major and Ors., (1995) 5 SCC 709where this Court held that decree or order including compromise decreegranting new right, title or interest in praesenti in immovable property ofvalue of Rs.100 or above is compulsorily registrable. In paragraphs 17and 18 of the judgment, following was laid down:-

“17. It would, therefore, be the duty of the court to examine ineach case whether the parties have pre-existing right to theimmovable property, or whether under the order or decree of thecourt one party having right, title or interest therein agreed orsuffered to extinguish the same and created right, title or interest inpraesenti in immovable property of the value of Rs 100 or upwardsin favour of other party for the first time, either by compromise orpretended consent. If latter be the position, the document iscompulsorily registrable.

18. The legal position qua clause (vi) can, on the basis of theaforesaid discussion, be summarised as below:

(1) Compromise decree if bona fide, in the sense that thecompromise is not device to obviate payment of stamp dutyand frustrate the law relating to registration, would not requireregistration. In converse situation, it would require registration.

(2) If the compromise decree were to create for the firsttime right, title or interest in immovable property of the valueof Rs 100 or upwards in favour of any party to the suit thedecree or order would require registration.

(3) If the decree were not to attract any of the clauses of sub-section (1) of Section 17, as was the position in the aforesaidPrivy Council and this Court’s cases, it is apparent that thedecree would not require registration.

(4) If the decree were not to embody the terms of compromise,as was the position in Lahore case, benefit from the terms ofcompromise cannot be derived, even if suit were to bedisposed of because of the compromise in question.

(5) If the property dealt with by the decree be not the “subject-matter of the suit or proceeding”, clause (vi) of sub-section(2) would not operate, because of the amendment of this clause

1030SUPREME COURT REPORTS

by Act 21 of 1929, which has its origin in the aforesaid decisionof the Privy Council, according to which the original clausewould have been attracted, even if it were to encompassproperty not litigated.”

14. The decree passed in Bhoop Singh’s case (supra) has beenBquoted in paragraph 2 of the judgment, which clearly proved thatdeclaration was granted that plaintiff will be the owner in possessionfrom today. In the above case, the suit was decreed on the basis ofcompromise though the decree is on the ground that defendant admittedthe claim of the plaintiff in written statement.

C15. Learned counsel for the appellant has further placed relianceon another judgment of this Court in Civil Appeal No.890 of 2008 –Mata Deen Vs. Madan Lal & Ors., in which case also, decree waspassed on the ground of family settlement in favour of the plaintiffs-defendants. The decree passed was required to be compulsorily registeredunder Section 17(2)(vi) of the Registration Act, which having not beenDdone, the judgment was set aside and the case was remanded for theconsideration of the question of law. The observation of this Court in theabove judgment is to the following effect:-“………………………..The second Appellate Court wasrequired to examine this aspect of the case. As it is substantialEquestion of law which fell for consideration under Section 100CPC, as could be seen, the impugned judgment passed by theHigh Court is simply concurred with the finding of fact concurredwith by the first Appellate Court in its judgment in exercise of itsappellate jurisdiction and it had not adverted to the substantialFquestion of law with respect to compulsory registration of decreein favour of the first defendant and the consequences for nonregistration of decree under Section 17(2)(vi) of the Act and thelaw laid down by this Court in the case of Bhoop Singh vs. RamSingh Major & Ors., (1995) 5 SCC 709 is not applied to the caseon hand, which rendered the impugned judgment and decree badGin law.

In view of the reasons stated supra, we set aside theimpugned judgment and decree passed by the High Court andremand the matter to it with request to reconsider the matterafter framing the substantial questions of law that would arise for

consideration and hear the parties and pass appropriate orders inaccordance with law. Since the matter is of 1995 we request theHigh Court to dispose of the matter as expeditiously as possiblebut not later than six months from the date of receipt of copy ofthis Order.

The appeal is disposed of accordingly.”

16. From the above judgment, it is not clear as to whether thedecree, which was passed on the basis of family settlement, relate to thesuit property or the property which was covered in the decree was notpart of the suit land. The above fact is crucial and it is yet to be determinedin view of the remand by this Court, hence, the said judgment cannot besaid to be lend any support to the learned counsel for the appellant.

17. Shri Manoj Swarup, learned counsel for the respondents hason the other hand placed reliance on judgment of Som Dev and Ors.Vs. Rati Ram and Anr., (2006) 10 SCC 788. The above was casewhere decree was based on an admission recognising pre-existing rightsunder family arrangement. This court held that in the above case, thedecree did not require registration under Section 17(1)(b).

18. This Court in subsequent judgment in K. Raghunandanand Ors. Vs. Ali Hussain Sabir and Ors., (2008) 13 SCC 102,Court had occasion to interpret Section 17 and laid down following inparagraphs 23, 24, 25 and 28:-

“23. Sub-section (2) of Section 17 of the Act, however, carvesout an exception therefrom stating that nothing in clauses (b) and(c) of sub-section (1) of Section 17 would inter alia apply to “anydecree or order of court except decree or order expressed tobe made on compromise and comprising immovable propertyother than that which is the subject-matter of the suit orproceeding”. Even if the passage was not the subject-matter ofthe suit, indisputably, in terms of the Code of Civil Procedure(Amendment) Act, 1976, compromise decree was permissible.

24. plain reading of the said provision clearly shows that aproperty which is not the subject-matter of the suit or proceedingwould come within the purview of exception contained in clause(vi) of sub-section (2) of Section 17 of the Act. If compromiseis entered into in respect of an immovable property, comprisingother than that which was the subject-matter of the suit or the

proceeding, the same would require registration. The said provisionwas inserted by Act 21 of 1929.

25. The Code of Civil Procedure (Amendment) Act, 1976 doesnot and cannot override the provisions of the Act. The purportedpassage being not the subject-matter of the suit, if sought to betransferred by the respondent-defendants in favour of the appellant-plaintiffs or if by reason thereof they have relinquished their ownrights and recognised the rights of the appellant-plaintiffs,registration thereof was imperative. The first appellate court heldso. The High Court also accepted the said findings.

28. Bhoop Singh [(1995) 5 SCC 709], inter alia, lays down: (SCCp. 715, para 18)

“18. (1) Compromise decree if bona fide, in the sense that thecompromise is not device to obviate payment of stamp dutyand frustrate the law relating to registration, would not requireregistration. In converse situation, it would require registration.

(2) If the compromise decree were to create for the firsttime right, title or interest in immovable property of the valueof Rs 100 or upwards in favour of any party to the suit thedecree or order would require registration.”

(emphasis in original)

Thus, indisputably, if the consent terms create right for the firsttime as contradistinguished from recognition of right, registrationthereof would be required, if the value of the property is Rs 100and upwards.”

19. In the above judgment, the case of Bhoop Singh was alsoconsidered and distinguished. In recent judgment delivered by TwoJudge Bench of this Court of which one of us was also member (AshokBhushan, J.), the judgment of Bhoop Singh and Som Dev came to beconsidered in Mohammade Yusuf & Ors. Vs. Rajkumar & Ors.,G2020(3) SCALE 146. The question arose in the above case was alsonon-registration of decree on the basis of which the Court has refusedto admit the decree in evidence in subsequent suit. This Court hadoccasion to interpret Section 17 and had also considered the BhoopSingh and Som Dev’s case. In paragraphs 6, 8, 13 and 14 of the judgment,which are relevant are as follows:-

“6. compromise decree passed by Court would ordinarily becovered by Section 17(1)(b) but sub-section (2) of Section 17provides for an exception for any decree or order of court excepta decree or order expressed to be made on compromise andcomprising immovable property other than that which is the subject-matter of the suit or proceeding. Thus, by virtue of sub-section(2)(vi) of Section 17 any decree or order of court does notrequire registration. In sub-clause (vi) of sub-section (2), onecategory is excepted from sub-clause (vi), i.e., decree or orderexpressed to be made on compromise and comprising immovableproperty other than that which is the subject-matter of the suit orproceeding. Thus, by conjointly reading Section 17(1)(b) andSection 17(2)(vi), it is clear that compromise decree comprisingimmovable property other than which is the subject-matter of thesuit or proceeding requires registration, although any decree ororder of court is exempted from registration by virtue of Section17(2)(vi). copy of the decree passed in Suit No. 250-A of 1984has been brought on record as Annexure P-2, which indicatesthat decree dated 4-10-1985 was passed by the Court for theproperty, which was subject-matter of the suit. Thus, theexclusionary clause in Section 17(2)(vi) is not applicable and thecompromise decree dated 4-10-1985 was not required to beregistered on plain reading of Section 17(2)(vi). The High Courtreferred to the judgment of this Court in Bhoop Singh Vs. RamSingh Major and Others, (1995) 5 SCC 709, in which case, theprovision of Section 17(2)(vi) of the Registration Act came forconsideration. This Court in the above case while considering clause(vi) laid down the following in paras 16, 17 and 18:

“16. We have to view the reach of clause (vi), which is anexception to sub-section (1), bearing all the aforesaid in mind.We would think that the exception engrafted is meant to coverthat decree or order of court, including decree or orderexpressed to be made on compromise, which declares thepre-existing right and does not by itself create new right, titleor interest in praesenti in immovable property of the value ofRs 100 or upwards. Any other view would find the mischief ofavoidance of registration, which requires payment of stampduty, embedded in the decree or order.

ABC

17. It would, therefore, be the duty of the court to examine ineach case whether the parties have pre-existing right to theimmovable property, or whether under the order or decree ofthe court one party having right, title or interest therein agreedor suffered to extinguish the same and created right, title orinterest in praesenti in immovable property of the value of Rs100 or upwards in favour of other party for the first time, eitherby compromise or pretended consent. If latter be the position,the document is compulsorily registrable.

18. The legal position qua clause (vi) can, on the basis of theaforesaid discussion, be summarised as below:

(1) Compromise decree if bona fide, in the sense that thecompromise is not device to obviate payment of stampduty and frustrate the law relating to registration, would notrequire registration. In converse situation, it would requireregistration.

(2) If the compromise decree were to create for the firsttime right, title or interest in immovable property of the valueof Rs 100 or upwards in favour of any party to the suit thedecree or order would require registration.

(3) If the decree were not to attract any of the clauses ofsub-section (1) of Section 17, as was the position in theaforesaid Privy Council and this Court’s cases, it is apparentthat the decree would not require registration.

(4) If the decree were not to embody the terms ofcompromise, as was the position in Lahore case, benefitfrom the terms of compromise cannot be derived, even if asuit were to be disposed of because of the compromise inquestion.

(5) If the property dealt with by the decree be not the“subject-matter of the suit or proceeding”, clause (vi) ofsub-section (2) would not operate, because of theamendment of this clause by Act 21 of 1929, which has itsorigin in the aforesaid decision of the Privy Council,according to which the original clause would have beenattracted, even if it were to encompass property notlitigated.”

8. Following the above judgment of Bhoop Singh (supra), the HighCourt held that since the compromise decree dated 4-10-1985 didnot declare any pre-existing right of the plaintiff, hence it requiresregistration. The High Court relied on the judgment of GurdwaraSahib vs. Gram Panchayat Village Sirthala and another (supra)and made following observations in paras 11, 12 and 13:

“11. In the present case, in the earlier suit CS No. 250-A/1984the petitioner had claimed declaration of title on the plea ofadverse possession and the compromise decree was passed inthe suit. The very fact that the suit was based upon the plea ofadverse possession reflects that the petitioner had no pre-existing title in the suit property. Till the suit was decreed, thepetitioner was mere encroacher, at the most denying the titleof lawful owner.

12. The Supreme Court in the matter of GurdwaraSahib v. Gram Panchayat Village Sirthala reported in (2014)1 SCC 669 has settled that declaratory decree based on pleaof adverse possession cannot be claimed and adversepossession can be used only as shield in defence by thedefendant. It has been held that:

“7. In the Second Appeal, the relief of ownership by adversepossession is again denied holding that such suit is notmaintainable. There cannot be any quarrel to this extentthe judgments of the courts below are correct and withoutany blemish. Even if the plaintiff is found to be in adversepossession, it cannot seek declaration to the effect thatsuch adverse possession has matured into ownership. Onlyif proceedings filed against the appellant and appellant isarrayed as the defendant that it can use this adversepossession as shield/defence.”13. The plea of the petitioner based upon Section 27 of theLimitation Act is found to be devoid of any merit since it relatesto the extinction of the right of the lawful owner after expiry ofthe Limitation Act, but in view of the judgment of the SupremeCourt in Gurdwara Sahib (supra), the petitioner cannot claimhimself to be the owner automatically after the expiry of thesaid limitation.”

13. This Court in Som Dev v. Rati Ram and Another, (2006) 10SCC 788 while explaining Section 17(2)(vi) and Sections 17(1)(b)and (c) held that all decrees and orders of the Court includingcompromise decree subject to the exception as referred that theproperties that are outside the subject-matter of the suit do notrequire registration. In para 18, this Court laid down the following:

“18. ………………… But with respect, it must be pointedout that decree or order of court does not require registrationif it is not based on compromise on the ground that clauses(b) and (c) of Section 17 of the Registration Act are attracted.Even decree on compromise does not require registrationif it does not take in property that is not the subject-matter of

the suit………………..”

14. In the facts of the present case, the decree dated 4-10-1985was with regard to the property, which was the subject-matter ofthe suit, hence not covered by exclusionary clause of SectionD17(2)(vi) and the present case is covered by the main exceptioncrafted in Section 17(2)(vi) i.e. “any decree or order of court”.When registration of an instrument as required by Section 17(1)(b)is specifically excluded by Section 17(2)(vi) by providing thatnothing in clauses (b) and (c) of sub-section (1) applies to anyEdecree or order of the court, we are of the view that thecompromise decree dated 4-10-1985 did not require registrationand the learned Civil Judge as well as the High Court erred inholding otherwise. We, thus, set aside the order of the Civil Judgedated 7-1-2015 as well as the judgment of the High Court dated13-2-2017. The compromise decree dated 4-10-1985 is directedFto be exhibited by the trial court. The appeal is allowedaccordingly.”

20. This Court held that since the decree which was sought to beexhibited was with regard to the property which was subject matter ofsuit, hence, was not covered by exclusionary clause of Section 17(2)(vi)Gand decree did not require registration. The issue in the present case issquarely covered by the above judgment. We, thus, conclude that inview of the fact that the consent decree dated 19.08.1991 relate to thesubject matter of the suit, hence it was not required to be registeredunder Section 17(2)(vi) and was covered by exclusionary clause. Thus,Hwe, answer question No.1 that the consent decree dated 19.08.1991

was not registrable and Courts below have rightly held that the decreedid not require registration.

Question No.2

21. The submission of the learned counsel for the appellant is thatthe consent decree was passed in favour of nephews of Smt. Jagno,who do not belong to the family of the plaintiffs-appellants. It is submittedthat plaintiffs-appellants belonged to the family of Badlu, who was thetenure-holder of the property. It is submitted that the defendants-respondents belong to family of Smt. Jagno being brother’s son of Smt.Jagno, i.e., nephews, hence, they belong to different family and no familyarrangement could have been entered with them.

22. Before we answer the above issue, it is necessary to find outwhat is the concept of family with regard to which family settlementcould be entered. Three-Judge bench of this Court in Ram CharanDas Vs. Girjanandini Devi and Ors., 1965 (3) SCR 841 had occasionto consider family settlement regarding the immovable property, thisCourt laid down that every party taking benefit under family settlementmust be related to one another in some way and have possible claim tothe property or claim or even semblance of claim. Following waslaid down at page 851:-“....................In the first place once it is held that the transactionbeing family settlement is not an alienation, it cannot amount tothe creation of an interest. For, as the Privy Council pointed outin Mst. Hiran Bibi case [AIR 1914 (PC) 44] in family settlementeach party takes share in the property by virtue of the independenttitle which is admitted to that extent by the other parties. It is notnecessary, as would appear from the decision in RangasamiGounden v. Nachiaopa Gounden [LR 46 I.A. 72] that every partytaking benefit under family settlement must necessarily be shownto have, under the law, claim to share in the property. All thatis necessary is that the parties must be related to one another insome way and have possible claim to the property or claim oreven semblance of claim on some other ground as, say,affection..................

23. Three Judge Bench in the celebrated judgment of this Courtin Kale and Ors. Vs. Deputy Director of Consolidation and Ors.,(1976) 3 SCC 119 had elaborately considered all contours of the family

Asettlement. This Court laid down that term “family” has to be understoodin wider sense so as to include within its fold not only close relations orlegal heirs but even those persons who may have some sort of antecedenttitle, semblance of claim or even if they have spes successionis. Inparagraphs 9 and 10, this Court laid down following:-

B“9. Before dealing with the respective contentions put forwardby the parties, we would like to discuss in general the effect andvalue of family arrangements entered into between the partieswith view to resolving disputes once for all. By virtue of familysettlement or arrangement members of family descending froma common ancestor or near relation seek to sink their differencesCand disputes, settle and resolve their conflicting claims or disputedtitles once for all in order to buy peace of mind and bring aboutcomplete harmony and goodwill in the family. The familyarrangements are governed by special equity peculiar tothemselves and would be enforced if honestly made. In thisDconnection, Kerr in his valuable treatise Kerr on Fraud at p. 364makes the following pertinent observations regarding the natureof the family arrangement which may be extracted thus:

“The principles which apply to the case of ordinarycompromise between strangers do not equally apply to the caseEof compromises in the nature of family arrangements. Familyarrangements are governed by special equity peculiar tothemselves, and will be enforced if honestly made, althoughthey have not been meant as compromise, but have proceededfrom an error of all parties, originating in mistake or ignoranceof fact as to what their rights actually are, or of the points onFwhich their rights actually depend.”

The object of the arrangement is to protect the family from long-drawn litigation or perpetual strifes which mar the unity andsolidarity of the family and create hatred and bad blood betweenthe various members of the family. Today when we are striving tobuild up an egalitarian society and are trying for completereconstruction of the society, to maintain .and uphold the unityand homogeneity of the family which ultimately results in theunification of the society and, therefore, of the entire country, isthe prime need of the hour. family arrangement by which theproperty is equitably divided between the various contenders so

as to achieve an equal distribution of wealth instead ofconcentrating the same in the hands of few is undoubtedly amilestone in the administration of social justice. That is why theterm “family” has to be understood in wider sense so as toinclude within its fold not only close relations or legal heirs buteven those persons who may have some sort of antecedent title,a semblance of claim or even if they have spes successionisso that future disputes are sealed for ever and the family insteadof fighting claims inter se and wasting time, money and energy onsuch fruitless or futile litigation is able to devote its attention tomore constructive work in the larger interest of the country. Thecourts have, therefore, leaned in favour of upholding familyarrangement instead of disturbing the same on technical or trivialgrounds. Where the courts find that the family arrangement suffersfrom legal lacuna or formal defect the rule of estoppel ispressed into service and is applied to shut out plea of the personwho being party to family arrangement seeks to unsettle settleddispute and claims to revoke the family arrangement under whichhe has himself enjoyed some material benefits. The law in Englandon this point is almost the same. In Halsbury’s Laws of England,Vol. 17, Third Edition, at pp. 215-216, the following apt observationsregarding the essentials of the family settlement and the principlesgoverning the existence of the same are made:

“A family arrangement is an agreement between membersof the same family, intended to be generally and reasonably forthe benefit of the family either by compromising doubtful or disputedrights or by preserving the family property or the peace and securityof the family by avoiding litigation or by saving its honour.

The agreement may be implied from long course of dealing,but it is more usual to embody or to effectuate the agreement in adeed to which the term “family arrangement” is applied.

Family arrangements are governed by principles which arenot applicable to dealings between strangers. The court, whendeciding the rights of parties under family arrangements or claimsto upset such arrangements, considers what in the broadest viewof the matter is most for the interest of families, and has regard toconsiderations which, in dealing with transactions between personsnot members of the same family, would not be taken into account.

Matters which would be fatal to the validity of similar transactionsbetween strangers are not objections to the binding effect of familyarrangements.”

10. In other words to put the binding effect and the essentials ofa family settlement in concretised form, the matter may bereduced into the form of the following propositions:

“(1) The family settlement must be bona fide one so as toresolve family disputes and rival claims by fair and equitabledivision or allotment of properties between the various membersof the family;

(2) The said settlement must be voluntary and should notbe induced by fraud, coercion or undue influence;

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

(4) It is well settled that registration would be necessaryonly if the terms of the family arrangement are reduced intowriting. Here also, distinction should be made between documentcontaining the terms and recitals of family arrangementmade under the document and mere memorandum preparedafter the family arrangement had already been made either forthe purpose of the record or for information of the court for makingnecessary mutation. In such case the memorandum itself doesnot create or extinguish any rights in immovable properties andtherefore does not fall within the mischief of Section 17(2) of theRegistration Act and is, therefore, not compulsorily registrable;(5) The members who may be parties to the familyarrangement must have some antecedent title, claim or interesteven possible claim in the property which is acknowledged bythe parties to the settlement. Even if one of the parties to thesettlement has no title but under the arrangement the other partyrelinquishes all its claims or titles in favour of such person andacknowledges him to be the sole owner, then the antecedent titlemust be assumed and the family arrangement will be upheld andthe courts will find no difficulty in giving assent to the same;

(6) Even if bona fide disputes, present or possible, whichmay not involve legal claims are settled by bona fide family

arrangement which is fair and equitable the family arrangementis final and binding on the parties to the settlement.”

24. After reviewing the earlier decision, this Court laid downfollowing in paragraph 19:-

“19. Thus it would appear from review of the decisionsanalysed above that the courts have taken very liberal and broadview of the validity of the family settlement and have always triedto uphold it and maintain it. The central idea in the approach madeby the courts is that if by consent of parties matter has beensettled, it should not be allowed to be reopened by the parties tothe agreement on frivolous or untenable grounds.”

25. In the above case, the Kale, with whom the two sisters ofhis mother entered into family settlement was not legal heir withinmeaning of U.P. Tenancy Act, 1939 but the family settlement enteredwith Kale was upheld by this Court. Following was laid down in paragraph27:-

“27. As regards the first point it appears to us to be whollyuntenable in law. From the principles enunciated by us and thecase law discussed above, it is absolutely clear that the word“family” cannot be construed in narrow sense so as to confinethe parties to the family arrangement only to persons who have alegal title to the property. Even so it cannot be disputed that appellantKale being the grandson of Lachman and therefore reversionerat the time when the talks for compromise took place wasundoubtedly prospective heir and also member of the family.Since Respondents 4 and 5 relinquished their claims in favour ofappellant Kale in respect of Khatas Nos. 5 and 90 the appellant,according to the authorities mentioned above, would be deemedto have antecedent title which was acknowledged by Respondents4 and 5. Apart from this there is one more important considerationwhich clearly shows that the family arrangement was undoubtedlya bona fide settlement of disputes. Under the family arrangementas referred to in the mutation petition the Respondents 4 and 5were given absolute and permanent rights in the lands in dispute.In 1955 when the compromise is alleged to have taken place theHindu Succession Act, 1956, was not passed and Respondents 4& 5 would have only limited interest even if they had got theentire property which would ultimately pass to appellant Kale after

Atheir death. Respondents 4 & 5 thought that it would be goodbargain if by dividing the properties equally they could retain partof the properties as absolute owners. At that time they did notknow that the Hindu Succession Act would be passed few monthslater. Finally the compromise sought to divide the propertiesbetween the children of Lachman, namely, his two daughters andBhis daughter’s son appellant Kale in equal shares and was, therefore,both fair and equitable. In fact if Respondents 4 & 5 would havegot all the lands the total area of which would be somewhereabout 39 acres they might have to give away substantial portionin view of the ceiling law. We have, therefore, to see theCcircumstances prevailing not after the order of the AssistantCommissioner was passed on the mutation petition but at the timewhen the parties sat down together to iron out differences. Havingregard to the circumstances indicated above, we cannot conceiveof more just and equitable division of the properties than whatappears to have been done by the family arrangement. In theseDcircumstances, therefore, it cannot be said that the family settlementwas not bona fide. Moreover, Respondents 4 and 5 had at nostage raised the issue before the revenue courts or even beforethe High Court that the settlement was not bona fide. The HighCourt as also Respondent 1 have both proceeded on the footingEthat the compromise was against the statutory provisions of lawor that it was not registered although it should have been registeredunder the Registration Act.”

26. Reverting to the facts of the present case, admittedly, thedefendants-respondents were nephews, i.e., brother’s sons of Smt.FJagno. We need to look into the Hindu Succession Act, 1956, Section15, which deals with the general rules of succession in the case of femaleHindus for properties inherited by female Hindus, which are devolved inaccording to Sections 15 and 16. Section 15(1), which is relevant is asfollows:-

G“15. General rules of succession in the case of femaleHindus.—(1)The property of female Hindu dying intestate shalldevolve according to the rules set out in section 16,—

(a) firstly, upon the sons and daughters (including the children ofany pre-deceased son or daughter) and the husband;

(b) secondly, upon the heirs of the husband;

(c) thirdly, upon the mother and father;

(d) fourthly, upon the heirs of the father; and

(e) lastly, upon the heirs of the mother.”

27. perusal of Section 15(1)(d) indicates that heirs of the fatherare covered in the heirs, who could succeed. When heirs of father of afemale are included as person who can possibly succeed, it cannot beheld that they are strangers and not the members of the family qua thefemale.

28. In the present case, Smt. Jagno, who as widow of SherSingh, who had died in 1953, had succeeded to half share in the agriculturalland and she was the absolute owner when she entered into settlement.We, thus, do not find any merit in the submission of learned counsel forthe appellants that the defendants-respondents were strangers to thefamily.

29. In view of our discussions on above two questions, we do notfind any merit in this appeal. All the Courts have rightly dismissed thesuit of the plaintiffs-appellants, which need no interference. This appealis dismissed. Parties shall bear their own costs.

Divya Pandey

Appeal dismissed.