Whether unregistered family arrangement deed of previous partitioncan be used to prove previous relinquishment of rights by reading it for a collateral purpose?

Whether a family arrangement is compulsorily registrable?

Section 49(1)(c) of the Registration Act

SUPREME COURT OF INDIA

Korukonda Chalapathi Rao Vs. Korukonda Annapurna Sampath

Hon’ble Judges : Hon’ble Mr. Justice K. M. Joseph & Hon’ble Mr. Justice S.
Ravindra Bhat
Decided on : 01–10–2021
2021–JX(SC)–0–596

HELD :

 No. Family arrangement having set out the previous transaction is not compulsorily registrable? A collateral purpose that is to say, for any purpose other than that of creating, declaring, assigning, limiting or extinguishing a right to immovable property.

 A family settlement document which merely sets out the existing arrangement and past transaction will not be compulsorily registrable under Section 17(1)(b) of the Registration Act, 1908, if it doesn’t by itself creates, declares, limits or extinguishes rights in the immovable properties.

In Subraya M.N. v. Vittala M.N.(2016) 8 SCC 705 to contend that there can be an oral relinquishment of the share of the family members in the family settlement and family arrangement. If the terms of the said family settlement is reduced into writing, and it is only a memorandum executed subsequently recording the terms of the oral family settlement, then, no registration is needed, it is contended.

IN the case of Kale v. Dy. Director of Consolidation [3 AIR 1976 SC 807]. This Court has summed up the essentials of the family settlement in the following proposition:

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

“(1) The family settlement must be a
bona fide one so as to resolve family
disputes and rival claims by a fair and
equitable division or allotment of
properties between the various members of
the family;

(2) The said settlement must be
voluntary and should not be induced by
fraud, coercion or undue influence;

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

(4) It is well settled that
registration would be necessary 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;

(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.”