Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.5167 of 2010
KHUSHI RAM & ORS. ...APPELLANT(S)
VERSUS
NAWAL SINGH & ORS. ...RESPONDENT(S)
J U D G M E N T
ASHOK BHUSHAN, J.
This appeal has been filed by the plaintiffs of
Civil Suit challenging the judgment dated 16.04.2009
of High Court of Punjab & Haryana dismissing the
second appeal filed by the appellant.
2. The brief facts of the case as emerged from the
pleadings of the parties are:
2.1 One Badlu, who was the tenure-holder of
agricultural land situate in Village Garhi
Signature Not Verified
Digitally signed by
MEENAKSHI KOHLI
Date: 2021.02.22
16:16:29 IST
Reason:
Bajidpur, Tehsil and District Gurgaon, had
two sons Bali Ram and Sher Singh. Sher Singh
1
died in the year 1953 issueless leaving his
widow Smt. Jagno.
2.2 Plaintiffs-appellants are descendents of Bali
Ram. After death of Sher Singh, his widow
inherited share of her late husband, i.e.,
the half of the agricultural property owned
by Badlu. A Civil Suit No.317 of 1991 was
filed by Nawal Singh and two others against
Smt. Jagno in the Court of Sub-Judge, Gurgaon
claiming decree of declaration as owners in
possession of the agricultural land mentioned
in the suit to the extent of half share
situate in Village Garhi Bajidpur. The
plaintiffs claim was that Smt. Jagno, who was
sharer of the half share, has in a family
settlement settled the land in favour of the
plaintiffs, who were the brother’s sons of
Smt. Jagno.
2.3 Smt. Jagno filed a written statement in the
suit admitting the claim of the plaintiffs.
Smt. Jagno also made a statement in the suit
accepting the claim of plaintiffs, the trial
2
court vide its judgment and decree dated
19.08.1991 passed the consent decree in
favour of the plaintiffs declaring the
plaintiffs owners in possession of the half
share in the land.
2.4 The plaintiffs, who were descendents of
brother of husband of Smt. Jagno filed a
Civil Suit No.79 of 1991 in the Court of
Senior Sub-Judge Gurgaon praying for
declaration that the decree passed in Civil
Suit No.317 of 1991 dated 19.08.1991 is
illegal, invalid and without legal necessity.
The plaintiffs also claimed decree of
declaration in their favour declaring them
owners in possession of land in question. In
Suit No.79 of 1991, a joint written statement
was filed by the defendants. Smt. Jagno was
also defendant No.4 in the civil Suit No.79
of 1991. The defendants supported the decree
dated 19.08.1991. The defendants No.1 to 3
claimed land by family settlement out of love
and affection by the defendant No.4, which
3
family settlement was duly affirmed by Civil
Court decree dated 19.08.1991.
2.5 The trial court framed nine issues. Issue
No. 5 being “Whether the decree dated
19.08.1991 passed in civil suit no.317/91
titled Nawal Singh Etc. Vs. Smt. Jagno passed
by Sh. K.B. Aggarwal SJIC, Gurgaon is
illegal, invalid without jurisdiction and
against custom, without legal necessity and
consideration and a result of fraud and undue
influence and is liable to be set aside?
2.6 Issue Nos. 2 to 5 were answered in favour of
defendants. The trial court also rejected
the argument of the plaintiffs that in
absence of registration of decree, no right
or title would pass in favour of the
defendants. Trial court held that
registration is required when fresh rights
are created for the first time by virtue of
decree itself. It was held that in the case
in hand, defendants were having pre-existing
right in the suit property under as in a
4
family settlement defendant No.4 acknowledged
them as owner and surrendered the possession
of the suit property in their favour at the
time of family settlement and the decree
dated 19.08.1991 merely affirms their pre-
existing rights and hence, does not require
registration.
2.7 The plaintiffs aggrieved by the judgment
filed first appeal before the learned
District Judge, which too was dismissed. The
First Appellate Court held that under Section
14(1) of the Indian Succession Act, a Hindu
female become full owner of the property,
which she acquires before the commencement of
the Act and not as a limited owner. The
First Appellate Court also held that
defendants being near relations of defendant
No.4, they cannot be said to be strangers to
her. First Appellate Court also held that
decree did not require registration. The
findings of the trial court were affirmed by
the First Appellate Court dismissing the
5
appeal. Aggrieved against the judgment of
the First Appellate 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 with the
defendant- respondents 1 to 3,
a decree ( Exhibit P.2)
suffered by Jagno (who is
father's sister of defendant-
respondent) required
registration under Section
17(1) of the Indian
Registration Act, 1908?”
2.8 The High Court answered the above question
of law against the plaintiffs and in favour
of the defendants-respondents. The High
Court held that judgment and the decree
rendered in Civil Suit No.317 of 1991 dated
19.08.1991 merely recognise the existing
right which was created by the oral family
settlement. High Court further held that
apart from relationship of Smt. Jagno with
defendants-respondents 1 to 3, she has
developed close affinity, love and affection
for defendant respondent Nos.1 to 3 as per
the findings recorded by the learned Courts
6
below. The High Court dismissed the second
appeal, aggrieved against which judgment,
this appeal has been filed.
3. We have heard Shri Ranbir Singh Yadav, learned
counsel for the appellant and Shri Manoj Swarup,
learned senior counsel for the respondent.
4. Learned counsel for the appellants, Shri Yadav
submits that no family settlement could have been
entered by Smt. Jagno in favour of defendant Nos.1 to
3, they being strangers to the family. A Hindu widow
cannot constitute a Joint Hindu Family with the
descendants of her brother, i.e., her parental side.
Family settlement can take place only between
members, who have antecedent title or pre-existing
right in the property proposed to be settled. Smt.
Jagno could have transferred her absolute share in
favour of the respondents or to any stranger only in
accordance with law by complying with the provisions
of the Transfer of Property Act, 1882, the Indian
Registration Act, 1908 and the Indian Stamp Act,
7
1899. Learned counsel further contends that
registration of compromise decree was compulsory by
virtue of Section 17 of the Indian Registration Act
and the decree dated 19.08.1991 having not been
registered, it did not confer any valid title to the
defendant Nos.1 to 3. All the Courts below committed
error in upholding the decree dated 19.08.1991
whereas the decree being an unregistered decree was
liable to be ignored and declared in operative.
5. Shri Manoj Swarup, learned senior counsel for the
respondents refuting the submissions of the learned
counsel for the appellant contends that 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 the above suit, it was
categorically pleaded that family
settlement/arrangement took place about two years
back and since then plaintiffs are owners in
possession of land and defendant No.4 had
relinquished all her rights therein.
8
6. It is submitted that decree passed in the Civil
Suit dated 19.08.1991 only declared the existing
rights of the defendant Nos.1 to 3, which was based
on the family settlement. It is submitted that the
defendant Nos.1 to 3 being brother’s sons of Smt.
Jagno, they were not strangers to Smt. Jagno and
family settlement could have been very well entered
by Smt. Jagno with them. It is submitted that the
expression “family” for the purpose of family
settlement is not to be given any narrow meaning; it
should be given a wide meaning to cover the members,
who are by any means related. It is further
submitted that the decree dated 19.08.1991 did not
require any registration under Section 17 of the
Indian Registration Act, 1908. The decree was passed
with regard to subject matter of the suit property,
it was exempted from registration by virtue of
Section 17(2)(vi) of the Indian Registration Act,
1908. Shri Swarup further contends that the family
settlement could have been made out of love and
affection with regard to which there was ample
pleading in the Civil Suit No.317 of 1991 and out of
9
love and affection defendant No.4, Smt. Jagno could
have very well settled the properties in favour of
defendant Nos.1 to 3, her nephews being brother’s
sons.
7. Learned counsel for the parties have relied on
judgments of this Court for their respective
submissions, which shall be referred to while
considering the submissions in detail.
8. The Civil Suit No.79 of 1991, which gives rise to
this appeal was a suit where following reliefs were
claimed by plaintiffs-appellants:-
“ 10. That the plaintiffs, therefore, pray
that a decree for declaration to the
effect that the decree in question passed
in Civil Suit No.317 of 1991 dated
19.8.1991 is illegal, invalid, without
legal necessity and consideration on the
grounds stated above in the plaint, and
the same does not convey any title in
favour of the defendants No.1 to 3 and
does not effect any reversionary rights of
the plaintiffs and the plaintiffs are
owners in possession of the land in
question, fully detailed and described in
para no.3 of the plaint above, with
consequential relief of permanent
injunction restraining the defendants
further alienating the land in question to
10
anyone else, may kindly be passed in
favour of the plaintiffs and against the
defendants with costs of this suit.
Any other relief which this Hon’ble Court
may deems fit and proper may also be
granted to the plaintiffs.”
9. There is no dispute between the parties that
Shri Sher Singh, husband of Smt. Jagno had half share
in the agricultural land situate in village Garhi
Bajidpur, which was suit property. Sher Singh died
in 1953. Smt. Jagno after enforcement of the Hindu
Succession Act, 1956 by virtue of Section 14 became
the absolute owner of the half share of the suit
property. The bone of contention between the parties
centres round the decree dated 19.08.1991 passed by
the Sub-Judge in Civil Suit No.317 of 1991 filed by
defendant Nos.1 to 3 against Smt. Jagno seeking
declaration that they are owners in possession of the
suit land. In Civil Suit No.317 of 1991, following
was pleaded in paragraphs 2 and 3:-
“ 2. That the parties are closely related
to each other, the plaintiffs are nephews
of the deft and constituted a Joint Hindu
Family. The deft Smt. Jagno Devi is the
daughter of Sh. Shib Lal, the grand father
of the plaintiffs.
11
3. That the defendant is living with the
plaintiffs at Village Chakerpur and the
plaintiffs are looking after her in her
old age and the deft has no issue. The
deft is very happy with the services of
the plaintiff rendered to her and out of
love and affection, the deft had allotted
the above mentioned land to the plaintiffs
in equal share in a family settlement
/arrangement, which took place about 2
years back and since then the plaintiffs
are owners in possession of the said land
and the deft had relinquished all rights
therein.”
10. In the aforesaid suit, written statement was
filed by Smt. Jagno admitting the claim of the
defendants. The trial court in its decree dated
19.08.1991 held following in paragraph 2:-
“ 2. The defendant appeared and filed
written statement admitting in toto the
claim of the plaintiffs. Statements of
the parties were also recorded. In view
of the written statement and statements of
parties, a consent decree in favour of the
plaintiffs and against the defendant is
passed for declaration as prayed for,
leaving the parties to bear their own
costs. Decree sheet be prepared and file
be consigned to the record room.”
11. In this appeal, following two questions arise for
consideration:-
12
(1) Whether the decree dated 19.08.1991 passed in
Civil Suit No.317 of 1991 requires
registration under Section 17 of the Indian
Registration Act, 1908?; and
(2) Whether the defendant Nos.1 to 3 were
strangers to defendant No.4 so as to disable
her to enter into any family arrangement with
defendant Nos.1 to 3?
Question No.(1)
12. There is no dispute that in the earlier Civil
Suit No.317 of 1991 in which consent decree was
passed on 19.08.1991, the subject matter of suit was
the agricultural land situated in Village Garhi,
Bajidpur. Further the suit was decreed on the
written statement filed by Smt. Jagno accepting the
claim of plaintiffs that there was family settlement
between the parties in which the half share in the
land was given to the plaintiffs of Civil Suit No.317
of 1991. The question is as to whether the decree
passed on 19.08.1991 required registration under
13
Section 17 of the Indian Registration Act, 1908.
Sections 17(1) and 17(2)(vi), which are relevant for
the present case, are as follows:-
| “17. | Documents of which registration is | |||
|---|---|---|---|---|
| compulsory.—( | l) The following documents | |||
| shall be registered, if the property to | ||||
| which they relate is situate in a district | ||||
| in which, and if they have been executed | ||||
| on or after the date on which, Act No. XVI | ||||
| of 1864, or the Indian Registration Act, | ||||
| 1866, or the Indian Registration Act, | ||||
| 1871, or the Indian Registration Act, | ||||
| 1877, or this Act came or comes into | ||||
| force, namely:— |
(a) instruments of gift of immovable
property;
(b) other non-testamentary instruments
which purport or operate to create,
declare, assign, limit or extinguish,
whether in present or in future, any
right, title or interest, whether vested
or contingent, of the value of one hundred
rupees and upwards, to or in immovable
property;
(c) non-testamentary instruments which
acknowledge the receipt or 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 any term exceeding one
year, or reserving a yearly rent;
(e) non-testamentary instruments
transferring or assigning any decree or
order of a Court or any award when such
decree or order or award purports or
14
operates to create, declare, assign, limit
or extinguish, whether in present or in
future, any right, title or interest,
whether vested or contingent, of the value
of one hundred rupees and upwards, to or
in immovable property:]
Provided that the State Government
may, by order published in the Official
Gazette, exempt from the operation of this
sub-section any lease executed in any
district, or part of a district, the terms
granted by which do not exceed five years
and the annual rents 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 a Court except
a decree or order expressed to be made on
a compromise and comprising immovable
property other than that which is the
subject-matter of the suit or proceeding;
or
XXXXXXXXXXXXXXXX”
13. The submission of the learned counsel for the
appellant is that there was no existing right in the
plaintiffs of Civil Suit No.317 of 1991, hence the
decree dated 19.08.1991 required registration under
Section 17(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 in
Bhoop Singh Vs. Ram Singh Major and Ors., (1995) 5
15
SCC 709 where this Court held that decree or order
including compromise decree granting new right, title
or interest in praesenti in immovable property of
value of Rs.100 or above is compulsorily registrable.
In paragraphs 17 and 18 of the judgment, following
was laid down:-
| “17. It would, therefore, be the duty of<br>the court to examine in each case whether<br>the parties have pre-existing right to the<br>immovable property, or whether under the<br>order or decree of the court one party<br>having right, title or interest therein<br>agreed or suffered to extinguish the same<br>and created right, title or interest in<br>praesenti in immovable property of the<br>value of Rs 100 or upwards in favour of<br>other party for the first time, either by<br>compromise or pretended consent. If latter<br>be the position, the document is<br>compulsorily registrable. | ||
|---|---|---|
| 18. The legal position qua clause (vi)<br>can, on the basis of the aforesaid<br>discussion, be summarised as below: | ||
| (1) Compromise decree if bona<br>fide, in the sense that the<br>compromise is not a device to<br>obviate payment of stamp duty and<br>frustrate the law relating to<br>registration, would not require<br>registration. In a converse<br>situation, it would require<br>registration. | ||
16
(2) If the compromise decree were
to create for the first
time right, title or interest in
immovable property of the value of
Rs 100 or upwards in favour of any
party to the suit the decree 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 aforesaid
Privy Council and this Court's
cases, it is apparent that the
decree 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 of
compromise cannot be derived, even
if a suit were to be disposed 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 by Act 21
of 1929, which has its origin in
the aforesaid decision of the
Privy Council, according to which
the original clause would have
been attracted, even if it were to
encompass property not litigated.”
14. The decree passed in Bhoop Singh’s case (supra)
17
has been quoted in paragraph 2 of the judgment, which
clearly proved that declaration was granted that
plaintiff will be the owner in possession from today.
In the above case, the suit was decreed on the basis
of compromise though the decree is on the ground that
defendant admitted the claim of the plaintiff in
written statement.
15. Learned counsel for the appellant has further
placed reliance on another judgment of this Court in
Civil Appeal No.890 of 2008 – Mata Deen Vs. Madan Lal
& Ors., in which case also, decree was passed on the
ground of family settlement in favour of the
plaintiffs-defendants. The decree passed was
required to be compulsorily registered under Section
17(2)(vi) of the Registration Act, which having not
been done, the judgment was set aside and the case
was remanded for the consideration of the question of
law. The observation of this Court in the above
judgment is to the following effect:-
“………………………..The second Appellate Court
was required to examine this aspect of the
case. As it is a substantial question of
18
law which fell for consideration under
Section 100 CPC, as could be seen, the
impugned judgment passed by the High Court
is simply concurred with the finding of
fact concurred with by the first Appellate
Court in its judgment in exercise of its
appellate jurisdiction and it had not
adverted to the substantial question of
law with respect to compulsory
registration of a decree in favour of the
first defendant and the consequences for
non registration of a decree under Section
17(2)(vi) of the Act and the law laid down
by this Court in the case of Bhoop Singh
vs. Ram Singh Major & Ors., (1995) 5 SCC
709 is not applied to the case on hand,
which rendered the impugned judgment and
decree bad in law.
In view of the reasons stated supra,
we set aside the impugned judgment and
decree passed by the High Court and remand
the matter to it with a request to
reconsider the matter after framing the
substantial questions of law that would
arise for consideration and hear the
parties and pass appropriate orders in
accordance with law. Since the matter is
of 1995 we request the High Court to
dispose of the matter as expeditiously as
possible but not later than six months
from the date of receipt of a copy of this
Order.
The appeal is disposed of
accordingly.”
16. From the above judgment, it is not clear as to
whether the decree, which was passed on the basis of
19
family settlement, relate to the suit property or the
property which was covered in the decree was not part
of the suit land. The above fact is crucial and it
is yet to be determined in view of the remand by this
Court, hence, the said judgment cannot be said to be
lend any support to the learned counsel for the
appellant.
17. Shri Manoj Swarup, learned counsel for the
respondents has on the other hand placed reliance on
judgment of Som Dev and Ors. Vs. Rati Ram and Anr.,
(2006) 10 SCC 788 . The above was a case where decree
was based on an admission recognising pre-existing
rights under family arrangement. This court held
that in the above case, the decree did not require
registration under Section 17(1)(b).
18. This Court in a subsequent judgment in K.
Raghunandan and Ors. Vs. Ali Hussain Sabir and Ors.,
(2008) 13 SCC 102, Court had occasion to interpret
Section 17 and laid down following in paragraphs 23,
24, 25 and 28:-
20
“23. Sub-section (2) of Section 17 of the
Act, however, carves out an exception
therefrom stating that nothing in clauses
( b ) and ( c ) of sub-section (1) of Section
17 would inter alia apply to “any decree
or order of a court except a decree or
order expressed to be made on a compromise
and comprising immovable property other
than that which is the subject-matter of
the suit or proceeding”. Even if the
passage was not the subject-matter of the
suit, indisputably, in terms of the Code
of Civil Procedure (Amendment) Act, 1976,
a compromise decree was permissible.
24. A plain reading of the said provision
clearly shows that a property which is not
the subject-matter of the suit or a
proceeding would come within the purview
of exception contained in clause ( vi ) of
sub-section (2) of Section 17 of the Act.
If a compromise is entered into in respect
of an immovable property, comprising other
than that which was the subject-matter of
the suit or the proceeding, the same would
require registration. The said provision
was inserted by Act 21 of 1929.
25. The Code of Civil Procedure
(Amendment) Act, 1976 does not and cannot
override the provisions of the Act. The
purported passage being not the subject-
matter of the suit, if sought to be
transferred by the respondent-defendants
in favour of the appellant-plaintiffs or
if by reason thereof they have
relinquished their own rights and
recognised the rights of the appellant-
plaintiffs, registration thereof was
imperative. The first appellate court held
21
| so. The High Court also accepted the said<br>findings. | ||
|---|---|---|
| 28.Bhoop Singh [(1995) 5 SCC 709], inter<br>alia, lays down: (SCC p. 715, para 18) | ||
| “18. (1) Compromise decree if bona<br>fide, in the sense that the<br>compromise is not a device to<br>obviate payment of stamp duty and<br>frustrate the law relating to<br>registration, would not require<br>registration. In a converse<br>situation, it would require<br>registration. | ||
| (2) If the compromise decree were<br>to create for the first<br>time right, title or interest in<br>immovable property of the value of<br>Rs 100 or upwards in favour of any<br>party to the suit the decree or<br>order would require registration.” | ||
| (emphasis in original) | ||
| Thus, indisputably, if the consent terms<br>create a right for the first time as<br>contradistinguished from recognition of a<br>right, registration thereof would be<br>required, if the value of the property is<br>Rs 100 and upwards.” |
19. In the above judgment, the case of Bhoop Singh
was also considered and distinguished. In a recent
judgment delivered by Two Judge Bench of this Court
of which one of us was also member (Ashok Bhushan,
22
J.), the judgment of Bhoop Singh and Som Dev came to
be considered in Mohammade Yusuf & Ors. Vs. Rajkumar
& Ors., 2020(3) SCALE 146. The question arose in the
above case was also non-registration of a decree on
the basis of which the Court has refused to admit the
decree in evidence in a subsequent suit. This Court
had occasion to interpret Section 17 and had also
considered the Bhoop Singh and Som Dev’s case. In
paragraphs 6, 8, 13 and 14 of the judgment, which are
relevant are as follows:-
“6. A compromise decree passed by a Court
would ordinarily be covered by Section
17(1)( b ) but sub-section (2) of Section 17
provides for an exception for any decree
or order of a court except a decree or
order expressed to be made on a compromise
and comprising 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 a court does not
require registration . In sub-clause ( vi )
of sub-section (2), one category is
excepted from sub-clause ( vi ), i.e., a
decree or order expressed to be made on a
compromise and comprising immovable
property other than that which is the
subject-matter of the suit or proceeding.
Thus, by conjointly reading Section 17(1)
( b ) and Section 17(2)( vi ), it is clear
that a compromise decree comprising
immovable property other than which is the
23
| subject-matter of the suit or proceeding<br>requires registration, although any decree<br>or order of a court is exempted from<br>registration by virtue of Section 17(2)<br>(vi). A copy of the decree passed in Suit<br>No. 250-A of 1984 has been brought on<br>record as Annexure P-2, which indicates<br>that decree dated 4-10-1985 was passed by<br>the Court for the property, which was<br>subject-matter of the suit. Thus, the<br>exclusionary clause in Section 17(2)(vi)<br>is not applicable and the compromise<br>decree dated 4-10-1985 was not required to<br>be registered on plain reading of Section<br>17(2)(vi). The High Court referred to the<br>judgment of this Court in Bhoop<br>Singh Vs. Ram Singh Major and Others,<br>(1995) 5 SCC 709, in which case, the<br>provision of Section 17(2)(vi) of the<br>Registration Act came for consideration.<br>This Court in the above case while<br>considering clause (vi) laid down the<br>following in paras 16, 17 and 18: | ||
|---|---|---|
| “16. We have to view the reach of<br>clause (vi), which is an exception<br>to sub-section (1), bearing all<br>the aforesaid in mind. We would<br>think that the exception engrafted<br>is meant to cover that decree or<br>order of a court, including a<br>decree or order expressed to be<br>made on a compromise, which<br>declares the pre-existing right<br>and does not by itself create new<br>right, title or interest in<br>praesenti in immovable property of<br>the value of Rs 100 or upwards.<br>Any other view would find the<br>mischief of avoidance of<br>registration, which requires |
24
| payment of stamp duty, embedded in<br>the decree or order. | ||||
|---|---|---|---|---|
| 17. It would, therefore, be the<br>duty of the court to examine in<br>each case whether the parties have<br>pre-existing right to the<br>immovable property, or whether<br>under the order or decree of the<br>court one party having right,<br>title or interest therein agreed<br>or suffered to extinguish the same<br>and created right, title or<br>interest in praesenti in immovable<br>property of the value of Rs 100 or<br>upwards in favour of other party<br>for the first time, either by<br>compromise or pretended consent.<br>If latter be the position, the<br>document is compulsorily<br>registrable. | ||||
| 18. The legal position qua clause<br>(vi) can, on the basis of the<br>aforesaid discussion, be<br>summarised as below: | ||||
| (1) Compromise decree if<br>bona fide, in the sense<br>that the compromise is<br>not a device to obviate<br>payment of stamp duty and<br>frustrate the law<br>relating to registration,<br>would not require<br>registration. In a<br>converse situation, it<br>would require<br>registration. | ||||
| (2) If the compromise<br>decree were to create for |
25
the first time right,
title or interest in
immovable property of the
value of Rs 100 or
upwards in favour of any
party to the suit the
decree 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
aforesaid Privy Council
and this Court's cases,
it is apparent that the
decree 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 of
compromise cannot be
derived, even if a suit
were to be disposed 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
by Act 21 of 1929, which
has its origin in the
aforesaid decision of the
26
| Privy Council, according<br>to which the original<br>clause would have been<br>attracted, even if it<br>were to encompass<br>property not litigated.” | ||||
|---|---|---|---|---|
| 8. Following the above judgment of Bhoop<br>Singh (supra), the High Court held that<br>since the compromise decree dated 4-10-<br>1985 did not declare any pre-existing<br>right of the plaintiff, hence it requires<br>registration. The High Court relied on the<br>judgment of Gurdwara Sahib Vs. Gram<br>Panchayat Village Sirthala and another<br>(supra) and made following observations in<br>paras 11, 12 and 13: | ||||
| “11. In the present case, in the<br>earlier suit CS No. 250-A/1984 the<br>petitioner had claimed declaration<br>of title on the plea of adverse<br>possession and the compromise<br>decree was passed in the suit. The<br>very fact that the suit was based<br>upon the plea of adverse<br>possession reflects that the<br>petitioner had no pre-existing<br>title in the suit property. Till<br>the suit was decreed, the<br>petitioner was a mere encroacher,<br>at the most denying the title of<br>lawful owner. | ||||
| 12. The Supreme Court in the<br>matter of Gurdwara Sahib v. Gram<br>Panchayat Village<br>Sirthala reported in (2014) 1 SCC<br>669 has settled that declaratory<br>decree based on plea of adverse<br>possession cannot be claimed and<br>adverse possession can be used |
27
only as shield in defence by the
defendant. It has been held that:
“7 . In the Second Appeal,
the relief of ownership
by adverse possession is
again denied holding that
such a suit is not
maintainable. There
cannot be any quarrel to
this extent the judgments
of the courts below are
correct and without any
blemish. Even if the
plaintiff is found to be
in adverse possession, it
cannot seek a declaration
to the effect that such
adverse possession has
matured into ownership.
Only if proceedings filed
against the appellant and
appellant is arrayed as
the defendant that it can
use this adverse
possession as a
shield/defence.”
13 . The plea of the petitioner
based upon Section 27 of the
Limitation Act is found to be
devoid of any merit since it
relates to the extinction of the
right of the lawful owner after
expiry of the Limitation Act, but
in view of the judgment of the
Supreme Court in Gurdwara
Sahib (supra), the petitioner
cannot claim himself to be the
owner automatically after the
expiry of the said limitation.”
28
| 13. This Court in Som Dev v. Rati Ram and<br>Another, (2006) 10 SCC 788 while<br>explaining Section 17(2)(vi) and Sections<br>17(1)(b) and (c) held that all decrees and<br>orders of the Court including compromise<br>decree subject to the exception as<br>referred that the properties that are<br>outside the subject-matter of the suit do<br>not require registration. In para 18, this<br>Court laid down the following: | ||
|---|---|---|
| “18. ………………… But with respect, it<br>must be pointed out that a decree<br>or order of a court does not<br>require registration if it is not<br>based on a compromise on the<br>ground that clauses (b) and (c) of<br>Section 17 of the Registration Act<br>are attracted. Even a decree on a<br>compromise does not require<br>registration if it does not take<br>in property that is not the<br>subject-matter of the<br>suit………………..” | ||
| 14. In the facts of the present case, the<br>decree dated 4-10-1985 was with regard to<br>the property, which was the subject-matter<br>of the suit, hence not covered by<br>exclusionary clause of Section 17(2)(vi)<br>and the present case is covered by the<br>main exception crafted in Section 17(2)<br>(vi) i.e. “any decree or order of a<br>court”. When registration of an instrument<br>as required by Section 17(1)(b) is<br>specifically excluded by Section 17(2)(vi)<br>by providing that nothing in clauses (b)<br>and (c) of sub-section (1) applies to any<br>decree or order of the court, we are of<br>the view that the compromise decree dated<br>4-10-1985 did not require registration and<br>the learned Civil Judge as well as the |
29
High Court erred in holding otherwise. We,
thus, set aside the order of the Civil
Judge dated 7-1-2015 as well as the
judgment of the High Court dated 13-2-
2017. The compromise decree dated 4-10-
1985 is directed to be exhibited by the
trial court. The appeal is allowed
accordingly.”
20. This Court held that since the decree which was
sought to be exhibited was with regard to the
property which was subject matter of suit, hence, was
not covered by exclusionary clause of Section 17(2)
(vi) and decree did not require registration. The
issue in the present case is squarely covered by the
above judgment. We, thus, conclude that in view of
the fact that the consent decree dated 19.08.1991
relate to the subject matter of the suit, hence it
was not required to be registered under Section 17(2)
(vi) and was covered by exclusionary clause. Thus,
we, answer question No.1 that the consent decree
dated 19.08.1991 was not registrable and Courts below
have rightly held that the decree did not require
registration.
Question No.2
30
21. The submission of the learned counsel for the
appellant is that the consent decree was passed in
favour of nephews of Smt. Jagno, who do not belong to
the family of the plaintiffs-appellants. It is
submitted that plaintiffs-appellants belonged to the
family of Badlu, who was the tenure-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 family
arrangement could have been entered with them.
22. Before we answer the above issue, it is necessary
to find out what is the concept of family with regard
to which a family settlement could be entered. A
Three-Judge bench of this Court in Ram Charan Das Vs.
Girjanandini Devi and Ors., 1965 (3) SCR 841 had
occasion to consider a family settlement regarding
the immovable property, this Court laid down that
every party taking benefit under a family settlement
must be related to one another in some way and have a
possible claim to the property or a claim or even a
31
semblance of a claim. Following was laid down at
page 851:-
“....................In the first place
once it is held that the transaction being
a family settlement is not an alienation,
it cannot amount to the creation of an
interest. For, as the Privy Council
pointed out in Mst. Hiran Bibi case [AIR
1914 (PC) 44] in a family settlement each
party takes a share in the property by
virtue of the independent title which is
admitted to that extent by the other
parties. It is not necessary, as would
appear from the decision in Rangasami
Gounden v. Nachiaopa Gounden [LR 46 I.A.
72] that every party taking benefit under
a family settlement must necessarily be
shown to have, under the law, a claim to a
share in the property. All that is
necessary is that the parties must be
related to one another 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..................
23. A Three Judge Bench in the celebrated judgment of
this Court in Kale and Ors. Vs. Deputy Director of
Consolidation and Ors., (1976) 3 SCC 119 had
elaborately considered all contours of the family
settlement. This Court laid down that term “family”
has to be understood in a wider sense so as to
32
include within its fold not only close relations or
legal heirs but even those persons who may have some
sort of antecedent title, a semblance of a claim or
even if they have a spes successionis. In paragraphs
9 and 10, this Court laid down following:-
| “9. Before dealing with the respective<br>contentions put forward by the parties, we<br>would like to discuss in general the<br>effect and value of family arrangements<br>entered into between the parties with a<br>view to resolving disputes once for all.<br>By virtue of a family settlement or<br>arrangement members of a family descending<br>from a common ancestor or a near relation<br>seek to sink their differences and<br>disputes, settle and resolve their<br>conflicting claims or disputed titles once<br>for all in order to buy peace of mind and<br>bring about complete harmony and goodwill<br>in the family. The family arrangements are<br>governed by a special equity peculiar to<br>themselves and would be enforced if<br>honestly made. In this connection, Kerr in<br>his valuable treatise Kerr on Fraud at p.<br>364 makes the following pertinent<br>observations regarding the nature of the<br>family arrangement which may be extracted<br>thus: | ||
|---|---|---|
| “The principles which apply to<br>the case of ordinary compromise<br>between strangers do not equally<br>apply to the case of compromises<br>in the nature of family<br>arrangements. Family arrangements<br>are governed by a special equity<br>peculiar to themselves, and will<br>be enforced if honestly made, |
33
| although they have not been meant<br>as a compromise, but have<br>proceeded from an error of all<br>parties, originating in mistake or<br>ignorance of fact as to what their<br>rights actually are, or of the<br>points on which their rights<br>actually depend.” | ||
|---|---|---|
| The object of the arrangement is to<br>protect the family from long-drawn<br>litigation or perpetual strifes which mar<br>the unity and solidarity of the family and<br>create hatred and bad blood between the<br>various members of the family. Today when<br>we are striving to build up an egalitarian<br>society and are trying for a complete<br>reconstruction of the society, to maintain<br>.and uphold the unity and homogeneity of<br>the family which ultimately results in the<br>unification of the society and, therefore,<br>of the entire country, is the prime need<br>of the hour. A family arrangement by which<br>the property is equitably divided between<br>the various contenders so as to achieve an<br>equal distribution of wealth instead of<br>concentrating the same in the hands of a<br>few is undoubtedly a milestone in the<br>administration of social justice. That is<br>why the term “family” has to be understood<br>in a wider sense so as to include within<br>its fold not only close relations or legal<br>heirs but even those persons who may have<br>some sort of antecedent title, a semblance<br>of a claim or even if they have a spes<br>successionis so that future disputes are<br>sealed for ever and the family instead of<br>fighting claims inter se and wasting time,<br>money and energy on such fruitless or<br>futile litigation is able to devote its<br>attention to more constructive work in the<br>larger interest of the country. The courts |
34
| have, therefore, leaned in favour of<br>upholding a family arrangement instead of<br>disturbing the same on technical or<br>trivial grounds. Where the courts find<br>that the family arrangement suffers from a<br>legal lacuna or a formal defect the rule<br>of estoppel is pressed into service and is<br>applied to shut out plea of the person who<br>being a party to family arrangement seeks<br>to unsettle a settled dispute and claims<br>to revoke the family arrangement under<br>which he has himself enjoyed some material<br>benefits. The law in England on this point<br>is almost the same. In Halsbury's Laws of<br>England, Vol. 17, Third Edition, at pp.<br>215-216, the following apt observations<br>regarding the essentials of the family<br>settlement and the principles governing<br>the existence of the same are made: | ||
|---|---|---|
| “A family arrangement is an<br>agreement between members of the<br>same family, intended to be<br>generally and reasonably for the<br>benefit of the family either by<br>compromising doubtful or disputed<br>rights or by preserving the family<br>property or the peace and security<br>of the family by avoiding<br>litigation or by saving its<br>honour. | ||
| The agreement may be implied<br>from a long course of dealing, but<br>it is more usual to embody or to<br>effectuate the agreement in a deed<br>to which the term “family<br>arrangement” is applied. | ||
| Family arrangements are<br>governed by principles which are<br>not applicable to dealings between |
35
| strangers. The court, when<br>deciding the rights of parties<br>under family arrangements or<br>claims to upset such arrangements,<br>considers what in the broadest<br>view of the matter is most for the<br>interest of families, and has<br>regard to considerations which, in<br>dealing with transactions between<br>persons not members of the same<br>family, would not be taken into<br>account. Matters which would be<br>fatal to the validity of similar<br>transactions between strangers are<br>not objections to the binding<br>effect of family arrangements.” | ||
|---|---|---|
| 10. In other words to put the binding<br>effect and the essentials of a family<br>settlement in a concretised form, the<br>matter may be reduced into the form of the<br>following propositions: | ||
| “(1) The family settlement<br>must be a bona fide one so as to<br>resolve family disputes and rival<br>claims by a fair and equitable<br>division or allotment of<br>properties between the various<br>members of the family; | ||
| (2) The said settlement must<br>be voluntary and should not be<br>induced by fraud, coercion or<br>undue influence; | ||
| (3) The family arrangement may<br>be even oral in which case no<br>registration is necessary; | ||
| (4) It is well settled that<br>registration would be necessary |
36
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) of the
Registration Act and is,
therefore, not compulsorily
registrable;
( 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;
37
( 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.”
24. After reviewing the earlier decision, this Court
laid down following in paragraph 19:-
“19. Thus it would appear from a
review of the decisions analysed above
that the courts have taken a very liberal
and broad view of the validity of the
family settlement and have always tried to
uphold it and maintain it. The central
idea in the approach made by the courts is
that if by consent of parties a matter has
been settled, it should not be allowed to
be reopened by the parties to the
agreement on frivolous or untenable
grounds.”
25. In the above case, the Kale , with whom the two
sisters of his mother entered into family settlement
was not a legal heir within meaning of U.P. Tenancy
Act, 1939 but the family settlement entered with Kale
was upheld by this Court. Following was laid down in
paragraph 27:-
| “27. | As regards the first point it appears | |
|---|---|---|
| to us to be wholly untenable in law. From | ||
| the principles enunciated by us and the |
38
case law discussed above, it is absolutely
clear that the word “family” cannot be
construed in a narrow sense so as to
confine the parties to the family
arrangement only to persons who have a
legal title to the property. Even so it
cannot be disputed that appellant Kale
being the grandson of Lachman and
therefore a reversioner at the time when
the talks for compromise took place was
undoubtedly a prospective heir and also a
member of the family. Since Respondents 4
and 5 relinquished their claims in favour
of appellant Kale in respect of Khatas
Nos. 5 and 90 the appellant, according to
the authorities mentioned above, would be
deemed to have antecedent title which was
acknowledged by Respondents 4 and 5. Apart
from this there is one more important
consideration which clearly shows that the
family arrangement was undoubtedly a bona
fide settlement of disputes. Under the
family arrangement as referred to in the
mutation petition the Respondents 4 and 5
were given absolute and permanent rights
in the lands in dispute. In 1955 when the
compromise is alleged to have taken place
the Hindu Succession Act, 1956, was not
passed and Respondents 4 & 5 would have
only a limited interest even if they had
got the entire property which would
ultimately pass to appellant Kale after
their death. Respondents 4 & 5 thought
that it would be a good bargain if by
dividing the properties equally they could
retain part of the properties as absolute
owners. At that time they did not know
that the Hindu Succession Act would be
passed a few months later. Finally the
compromise sought to divide the properties
between the children of Lachman, namely,
his two daughters and his daughter's son
appellant Kale in equal shares and was,
therefore, both fair and equitable. In
39
| fact if Respondents 4 & 5 would have got | |
|---|---|
| all the lands the total area of which | |
| would be somewhere about 39 acres they | |
| might have to give away a substantial | |
| portion in view of the ceiling law. We | |
| have, therefore, to see the circumstances | |
| prevailing not after the order of the | |
| Assistant Commissioner was passed on the | |
| mutation petition but at the time when the | |
| parties sat down together to iron out | |
| differences. Having regard to the | |
| circumstances indicated above, we cannot | |
| conceive of a more just and equitable | |
| division of the properties than what | |
| appears to have been done by the family | |
| arrangement. In these circumstances, | |
| therefore, it cannot be said that the | |
| family settlement was not bona fide. | |
| Moreover, Respondents 4 and 5 had at no | |
| stage raised the issue before the revenue | |
| courts or even before the High Court that | |
| the settlement was not bona fide. The High | |
| Court as also Respondent 1 have both | |
| proceeded on the footing that the | |
| compromise was against the statutory | |
| provisions of law or that it was not | |
| registered although it should have been | |
| registered under the Registration Act.” |
26. Reverting to the facts of the present case,
admittedly, the defendants-respondents were nephews,
i.e., brother’s sons of Smt. Jagno. We need to look
into the Hindu Succession Act, 1956, Section 15,
which deals with the general rules of succession in
the case of female Hindus for properties inherited by
female Hindus, which are devolved in according to
40
Sections 15 and 16. Section 15(1), which is relevant
is as follows:-
| “ | 15. General rules of succession in the | ||
|---|---|---|---|
| case of female Hindus. | — | (1)The property of |
(a) firstly, upon the sons and daughters
(including the children of any 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. A perusal of Section 15(1)(d) indicates that
heirs of the father are covered in the heirs, who
could succeed. When heirs of father of a female are
included as person who can possibly succeed, it
cannot be held that they are strangers and not the
members of the family qua the female.
28. In the present case, Smt. Jagno, who as a widow
of Sher Singh, who had died in 1953, had succeeded to
half share in the agricultural land and she was the
absolute owner when she entered into settlement. We,
41
thus, do not find any merit in the submission of
learned counsel for the appellants that the
defendants-respondents were strangers to the family.
29. In view of our discussions on above two
questions, we do not find any merit in this appeal.
All the Courts have rightly dismissed the suit of the
plaintiffs-appellants, which need no interference.
This appeal is dismissed. Parties shall bear their
own costs.
......................J.
( ASHOK BHUSHAN )
......................J.
( R. SUBHASH REDDY )
New Delhi,
February 22, 2021.
42