Oral fam­ily set­tle­ments are legally valid

The Law Com­mis­sion of In­dia has ob­served that oral par­ti­tions are a means of se­cur­ing peace and wel­fare in a Hindu joint fam­ily

HT Estates - - HTESTATES - Su­nil Tyagi

Dis­putes re­lated to divi­sion and dis­tri­bu­tion of joint Hindu fam­ily prop­er­ties abound in our courts. The main rea­son for mem­bers de­sir­ing divi­sion is to be­come ex­clu­sive and sole owners of their sep­a­rated and dis­tinct share, which con­se­quently gives them greater con­trol over the prop­erty, al­low­ing them to deal with it in any way they want to. When one is a joint owner of an un­di­vided im­mov­able prop­erty, the phys­i­cal de­mar­ca­tion of one’s ex­act share can­not be clearly made. By car­ry­ing out a par­ti­tion – whether oral or in writ­ing – one’s erst­while joint and un­di­vided share in an im­mov­able prop­erty be­comes sep­a­rated, dis­tinct and clearly iden­ti­fi­able.

Un­der t he pro­vi­sions of Hindu Law, oral fam­ily set­tle­ments, in­clud­ing oral par­ti­tion are per­mis­si­ble and legally valid modes of ef­fect­ing divi­sion of joint fam­ily prop­er­ties. Courts in In­dia have taken a lib­eral and broad view of the va­lid­ity of oral fam­ily set­tle­ments in­clud­ing oral par­ti­tions amongst mem­bers de­scend­ing from a com­mon an­ces­tor, and try to up­hold their va­lid­ity.

The courts lean in favour of up­hold­ing the va­lid­ity of bona fide oral fam­ily set­tle­ments, in­clud­ing oral par­ti­tions on the ground that if made am­i­ca­bly and af­ter ob­tain­ing mu­tual con­sent of par­ties, such ar­range­ments should not be al­lowed to be re­opened at a later stage on friv­o­lous or un­ten­able grounds. The ul­ti­mate aim should be to pro­tect fam­ily mem­bers from per­pet­ual strife which mar the unity of the fam­ily.

In its re­port dated July 2008, the Law Com­mis­sion of In­dia, too, ob­served that oral par­ti­tions and oral fam­ily ar­range­ments are a means of se­cur­ing peace and wel­fare of a fam­ily, and are es­pe­cially help­ful in cases of il­lit­er­ate mem­bers of Hindu joint fam­ily or those who have no means to bear le­gal ex­penses on more for­mal meth­ods.

In the land­mark case of Kale and Oth­ers v Deputy Direc­tor of Con­sol­i­da­tion and Oth­ers (1976), the Supreme Court held that fam­ily ar­range­ments are gov­erned by a spe­cial equity and hence would be valid even if ef­fected orally. Of course, if made orally, no ques­tion of pay­ing stamp duty or reg­is­tra­tion fee arises.

Pay­ment of stamp duty and reg­is­tra­tion would only be nec­es­sary if the terms of the oral fam­ily ar­range­ment/oral par­ti­tion are re­duced into writ­ing in the form of a doc­u­ment. Here too, a dis­tinc­tion should be made be­tween a doc­u­ment con­tain­ing terms that ac­tu­ally bring about the divi­sion of prop­er­ties on one hand, and a mere mem­o­ran­dum pre­pared af­ter the fam­ily ar­range­ment had al­ready been made (mainly to serve as an in­for ma­tion record) on the other hand.

A doc­u­ment which i s i n the na­ture of purely a mem­o­ran­dum of an oral set­tle­ment which was ar­rived at ear­lier, is not re­quired to be stamped or com­pul­so­rily reg­is­tered. An un­reg­is­tered mem­o­ran­dum would in­deed be valid, fi­nal and bind­ing on the par­ties. This is be­cause a pure mem­o­ran­dum does not by it­self cre­ate or ex­tin­guish any rights in im­mov­able prop­er­ties.

How­ever, stamp duty and reg­is­tra­tion fee would have to be paid on a deed of set­tle­ment con­tain­ing terms that af­fect the divi­sion and dis­tri­bu­tion of prop­er­ties, as such a doc­u­ment cre­ates/ ex­tin­guishes rights, ti­tle and in­ter­est in im­mov­able prop­er­ties.

Al­though an in­ex­pen­sive and con­ve­nient mode, oral fam­ily set­tle­ments and oral par­ti­tions may make it ex­tremely dif­fi­cult to as­cer­tain each in­di­vid­ual’s spe­cific share in the prop­erty, es­pe­cially with the pas­sage of time.

Where a set­tle­ment or par­ti­tion has not been re­duced to writ­ing by way of a set­tle­ment deed/ par­ti­tion deed, it leaves the pos­si­bil­ity open for any party to deny the oral set­tle­ment or par­ti­tion as hav­ing taken place al­to­gether and chal­leng­ing its va­lid­ity.

Ad­mit­tedly, f am­ily mem­bers who un­der­take an ami- ca­ble divi­sion of their joint prop­er­ties by ex­e­cut­ing a writ­ten in­stru­ment which is duly stamped and reg­is­tered, greatly min­imise their chances of fu­ture dis­putes on the ex­tent and na­ture of each in­di­vid­ual’s dis­tinct share. Bear­ing th­ese le­gal­i­ties in mind, one can en­sure the process of ar­riv­ing at fam­ily set­tle­ments is smooth.

THINKSTOCK

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