• Registration and stamping of family settlement

My father had partitioned his immovable ancestral (HUF) property into four equal portions among himself and his three sons through a Family Settlement recorded in principle as an Interim Memorandum in the year 2000 which was executed as last & final Memorandum of Family Settlement in year 2003. Consequently all the four individuals took physical undisputed possession of their respective portions with consensus among themselves. 
My father passed away in 2007 and left his last registered Will, through which his individual share of immovable property was bequeathed in favour of his four minor grandchildren. It was also mentioned in the will that the property owned by him had already been partitioned into four shares between him and his three sons and a Deed of Family Settlement was executed in 2003 based on which all the four individuals have taken undisputed possession of their respective shares after giving voluntary consent to each other, and that the beneficiaries of his will shall have the right to get their names mutated in the revenue & government records in terms of his will.
On applying for Mutation in the respective names, the office of the Superintendent of Land Records, Land Conversion Branch (Diversion), of the city of Madhya Pradesh in 2008 stated in its judgement of 2010 that “registration and stamping of the Memorandum of Family Settlement of 2003 is required before admitting it as evidence for mutation of the property under individual names”, and in the absence of the same, the property be mutated in the joint names of the three sons.
Please advise that whether “registration and/ or stamping of the Memorandum of Family Settlement” is mandatory in the state of Madhya Pradesh, as in the newspaper columns of eminent lawyers and also on the internet I have come across numerous cases wherein it has been opined that the “registration and/ or stamping of the Memorandum of Family Settlement” is not required. Further if it is so in the state of MP, can a judgement be quoted as precedence wherein the “registration and/ or stamping of the Memorandum of Family Settlement” was not required for mutation of individual property in the state of MP.
Asked 2 years ago in Property Law from Madhya Pradesh, Madhya Pradesh
Religion: Hindu
1) deed of family settlement provided for division of property by metes and bounds in name of father and 3 sons 

2) it is required to be stamped and registeted 

3) if document in question is mere record of family arrangement it does not require registration 
Ajay Sethi
Advocate, Mumbai
46671 Answers
2761 Consultations

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A family settlement, executed among co-owners, does not require registration if reduced to a memorandum. You should challenge the order of office of Land Records in the MP High Court which may quash it. They will not mutate your name even if you show them a past judgment, but they will if specific directions from the court are issued. 
Ashish Davessar
Advocate, Jaipur
23097 Answers
639 Consultations

5.0 on 5.0

The question has often arisen before the Courts as to whether such family settlements result in transfer of properties from one person to another and whether such transfer can be said to be without consideration. A reference may be usefully made to the decision of the Supreme Court in the case of Ramcharandas V/s. Girjanandinidevi, AIR 1966 SC 323.

The Supreme Court has therein observed as follows :-

“Such family settlement between the members of the family bonafide to put and end to the dispute amongst themselves is not a transfer. It is also not a creation of an interest. In a family settlement, each party takes a share in the property by virtue of independent title which is admitted to that extent by the other parties. Every party who takes benefit under it need not necessarily be shown to have under the law claim to share in property. All that is necessary to show is that the parties are related to each other in some way and have a possible claim to the property or a claim or even a semblance of a claim on some other ground as, say, affection”.

In the same case, the Supreme Court has given the reason d’tre for recognizing such family settlements as valid. It has observed:-

“Courts give effect to a family settlement upon the broad and general ground that its object is to settle existing or future disputes regarding the property amongst members of the family. The word “family” in the context is not to be understood in a narrow sense of being a claim to share in the property in dispute”.
Observations in the case of Tek Bahadur V/s. Debi Singh, AIR (1966) SC 292 also indicate that “Such Family Arrangements can be arrived at orally. Its terms may be recorded in writing as memorandum of what had been agreed upon. The memorandum need not be prepared for the purpose of being used as a document on which future title of parties is to be founded. It is generally prepared as a record of what had been agreed upon in order that there are no hazy notions about it in future. It is only when the family arrangement is reduced to writing with the purpose of using that writing as proof of what they had arranged and where the arrangement is brought about by the document as such, that the document requires registration, because it is then that it would amount to document of title declaring for future what rights and in what properties the parties possess. But a document which is no more than a memorandum of what had been agreed to between the parties does not require compulsory registration under Section 17, Registration Act. Similar observations regarding registration are found in AIR (1966) SC 1836, Pulliah v/s. Narasimham.

The nature of Family Settlement and the allied questions whether such settlements amount to “Transfer” for purposes of Capital Gains or Registration have been dealt with by several decisions of the Supreme Court & also by some High Courts which explain what is family settlement and why it does not amount to “transfer” and why the memorandum of family settlement does not require registration.

There are various settled laws by supreme court in this regard.

Further the land revenue department cannot rely on the court judgment to deny the mutation or reject any application based on any judgment including that of supreme court.   The judgement alone cannot be a blanket bar for all other cases which are referred for mutation before the land revenue department.  The department has to follow the rule in this regard and cannot quote judgement as a reason for their rejection until the said judgment has been issued as a circular to all the state governments to implement this decision..  
You can issue a legal notice demanding the reason for rejecting and can file a suit for remedy through a court of law.
T Kalaiselvan
Advocate, Vellore
36820 Answers
403 Consultations

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