RIPUDAMAN SINGH versus TIKKA MAHESHWAR CHAND on 6 July 2021

ORDER

Leave granted.

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1. The plaintiff is in appeal before this Court challenging thejudgment and decree passed by the High Court on 28.10.2006 wherebyappeal filed by the defendant was allowed and the suit for declarationchallenging the orders passed in mutation proceedings was dismissed.

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A2. The parties herein are the two sons of late Vijendra Singh. Theappellant filed a suit for possession in the year 1978 disputing the Willdated 04.12.1958 executed in favour of the defendant. The appellantclaimed half share of the land as described in the plaint. During thependency of suit, a decree was passed on the basis of compromise arrivedat between the parties. The terms of compromise read as under:B

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“The plaintiff shall be delivered possession of Khasra No. 513/1area measuring 8 Kanals 18 Marlas as per Tatima Ex.P-2 by thedefendant and the plaintiff shall be exclusive owner thereof andthe defendant shall continue to remain in physical possession asan owner of Khasra No.513/2 area measuring 143 Kanals and 16CMarlas.

The plaintiff shall be owner of Khasra No. 516/1 area measuring27 Kanals 11 Marlas and the defendant shall also pay to the plaintiffa sum of Rs.10,000/- within one month from today. The plaintiffshall also be owner in respect of the land recorded in the ownershipDof the defendant in Patwars Dhaneta, Nohngi, Choru and Saprohin respect of Ghair Mumkin Land.”

3. In pursuance of the decree so passed, the plaintiff sought amutation of the 1/2 share of the land vesting to him which was allowedby the Naib Tehsildar on 10.02.1983. However, an appeal against theEsaid mutation was disposed of with a direction to Naib Tehsildar to decidethe mutation afresh as the mutation was sanctioned without grantingany opportunity of being heard to the respondent.

4. The appellant thereafter filed an appeal before the DivisionalCommissioner. Such appeal was dismissed on the ground that theFcompromise decree in the absence of registration is against the provisionsof the Registration Act, 1908. It was held as under:

“From the perusal of the record, it is revealed that the decreepassed by the Ld. Sub Judge in Civil Suit No. 45 of 1978 is acompromise decree concerning delivery of possession of KhasraGNo.513/1 measuring 8 Kanals 18 Marlas and owner of Kh.No.516/1 measuring 27 Kanals 11 Marlas situated in patwarsDhaneta, Nohang, Choru and Saproh in respect of Gair MumkinLand. The present appeal is in respect of other land which wasnot the subject matter of suit in the civil court under section 17(2)(vi)of Indian Registration Act the compromise decree which related H

to the subject matter of the suit remained immune from registration.The compromise decree which incorporated matters beyond thescope of the suit, requires registration. Therefore, the land underdispute which is beyond the scope of the suit or compromise decreerequires registration. The Assistant Collector, IInd Grade Nadaunvide his orders dated 24.6.89 has sanctioned the mutation withoutthe registration of the compromise decree is against the provisionof the act ibid and the Ld. Collector has rightly accepted theappeals of the respondent Tikka Maheshwar Chand. Hence, theseappeals are dismissed and the order of the Collector dated 13.2.91is upheld.”

5. The appellant subsequently filed a suit for declaration challengingsuch order passed by the Commissioner. The suit was dismissed by thelearned Sub Judge, Ist Class, Hamirpur on 20.11.2002. But the appealpreferred by the appellant was allowed by the learned District Judge,Hamirpur in 19.08.2004. The said order was under challenge in the secondappeal before the High Court. The High Court set aside the judgmentand decree passed by the first appellate court and the suit was dismissedon the ground that the land even though being subject-matter ofcompromise, was not the subject-matter of the suit and therefore thedecree required registration under Section 17(2)(vi) of the RegistrationAct, 1908.

6. The only question in the present appeal is whether a compromisedecree in respect of land which is not the subject-matter of suit but ispart of the settlement between the family members requires compulsoryregistration in terms of Section 17(2)(vi) of the Registration Act, 1908.The relevant provision of clause (v) and clause (vi) of sub-clause (2) ofSection 17 of the said Act reads as under:

“17(2) Nothing in clauses (b) and (c) of sub-section (1) appliesto- xxx

(v) any document other than the documents specified in sub-section (1A) not itself creating, declaring, assigning, limiting orextinguishing any right, title or interest of the value of one hundredrupees and upwards to or in immovable property, but merelycreating a right to obtain another document which will, whenexecuted, create, declare assign, limit or extinguish any such right,title or interest; AB

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

7. We find that the judgment and decree passed by the High CourtBis clearly erroneous and cannot be sustained in law. The parties are thesons of late Vijendra Singh. As an heir of deceased, the appellant had aright in the estateleft by the deceased. Therefore, it was not a new rightbeing created for the first time when the parties entered into acompromise before the civil court but rather an pre-existing right in theproperty was recognized by way of settlement in court proceedings.C

8. Though, the Gair Mumkin Land (Non-cultivable land) was notsubject-matter of the suit, but the compromise entered between theparties before the learned Trial Court leading to decree on 3.11.1981included such non-cultivable land. It is to be noted that compromise decreecan be passed even if the subject-matter of the agreement, compromiseDof satisfaction is not the same as the subject-matter of the suit in termsof the provisions of Order XXIII Rule 3 of the Code of Civil Procedure,1908. Order XXIII Rule 3 of the Code of Civil Procedure, 1908 readsthus:

“3. Compromise of Suit. - Where it is proved to the satisfaction ofEthe Court that a suit has been adjusted wholly or in part by anylawful agreement or compromise, in writing and signed by theparties or where the defendant satisfies the plaintiff in respect ofthe whole or any part of the subject-matter of the suit, the Courtshall order such agreement, compromise or satisfaction to beFrecorded, and shall pass a decree in accordance therewith so faras it relates to the parties to the suit, whether or not the subject-matter of the agreement, compromise or satisfaction is the sameas the subject-matter of the suit:

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9. Therefore, the compromise decree entered into between theparties in respect of land which was not the subject matter of the suit isvalid and is thus a legal settlement. It would be relevant to notice thatdefendant-respondent has not disputed such settlement on any admissiblegrounds before any forum.H

10. The question whether such settlement between the membersof the family would require registration or not has come up forconsideration before this Court in a judgment reported in Kale and Othersv. Deputy Director of Consolidation and Others[1] which reads as under:

“9…………The object of the arrangement is to protect the familyfrom long-drawn litigation or perpetual strifes which mar the unityand solidarity of the family and create hatred and bad bloodbetween the various members of the family. Today when we arestriving to build up an egalitarian society and are trying for acomplete reconstruction of the society, to maintain and uphold theunity and homogeneity of the family which ultimately results inthe unification of the society and, therefore, of the entire country,is the prime need of the hour. A family arrangement by which theproperty is equitably divided between the various contenders soas to achieve an equal distribution of wealth instead ofconcentrating the same in the hands of a few is undoubtedly amilestone in the administration of social justice. That is why theterm “family” has to be understood in a 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 a claim or even if they have a 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 a familyarrangement instead of disturbing the same on technical or trivialgrounds. Where the courts find that the family arrangement suffersfrom a legal lacuna or a formal defect the rule of estoppel ispressed into service and is applied to shut out plea of the personwho being a party to family arrangement seeks to unsettle a settleddispute and claims to revoke the family arrangement under whichhe has himself enjoyed some material benefits.

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

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SUPREME COURT REPORTS

A(4) It is well settled that registration would be necessary only ifthe terms of the family arrangement are reduced into writing.Here also, a distinction should be made between a documentcontaining the terms and recitals of a family arrangementmade under the document and a mere memorandum preparedafter the family arrangement had already been made either forBthe purpose of the record or for information of the court for makingnecessary mutation. In such a 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; C

(5) The members who may be parties to the family arrangementmust have some antecedent title, claim or interest even a possibleclaim in the property which is acknowledged by the parties to thesettlement. Even if one of the parties to the settlement has no titlebut under the arrangement the other party relinquishes all its claimsDor titles in favour of such a person and acknowledges him to bethe sole owner, then the antecedent title must be assumed and thefamily arrangement will be upheld and the courts will find nodifficulty in giving assent to the same;

(6) Even if bona fide disputes, present or possible, which may notEinvolve legal claims are settled by a bona fide family arrangementwhich is fair and equitable the family arrangement is final andbinding on the parties to the settlement.”

11. The said judgment has come up for consideration recently in acase reported as Ravinder Kaur Grewal and Others v. Manjit KaurFand Others[2].It may be stated that this was not a case of compromisedecree but of a family settlement which was sought to be enforced in asuit for declaration as one of the parties to the settlement wanted toresile from it. Such family settlement was held to be a document as perclause (v) of sub-section 2 of Section 17 of the Registration Act, 1908.

G12. An aggrieved person can seek enforcement of familysettlement in a suit for declaration wherein the family members havesome semblance of right in property or any pre-existing right in theproperty. The family members could enter into settlement during thependency of the proceedings before the Civil Court as well. Such H2 (2020) 9 SCC 706

settlement would be binding within the members of the family. If adocument is sought to be enforced which is not recognized by a decree,the provision of clause (v) of sub-section 2 of Section 17 of the RegistrationAct, 1908 would be applicable. However, where the decree has beenpassed in respect of family property, clause (vi) of sub-section 2 ofSection 17 of the Registration Act, 1908 would be applicable. The principleis based on the fact that family settlement only declares the rights whichare already possessed by the parties.

13. In respect of a question whether the decree requires registrationor not, this Court in Bhoop Singh v. Ram Singh Major and Others[3]held that decree or order including compromise decree creating newright, title or interest in praesenti in immovable property of value ofRs.100/- or above is compulsory for registration. It was not the case anypre-existing right but right that has been created by the decree alone.This court explained both the situation, where a part has pre-existingright and where no such right exists. It was observed as under:

“13. In other words, the court must enquire whether a documenthas recorded unqualified and unconditional words of present demiseof right title and interest in the property and included the essentialterms of the same; if the document, including a compromise memo,extinguishes the rights of one and seeks to confer right, title orinterest in praesenti in favour of the other, relating to immovableproperty of the value of Rs.100 and upwards, the document orrecord or compromise memo shall be compulsorily registered.

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16. We have to view the reach of clause (vi), which is an exceptionto sub-section (1), bearing all the aforesaid in mind. We wouldthink that the exception engrafted is meant to cover that decreeor order of a court, including a decree or order expressed to bemade on a compromise, which declares the pre-existing right anddoes not by itself create new right, title or interest in praesenti inimmovable property of the value of Rs. 100 or upwards. Anyother view would find the mischief of avoidance of registration,which requires payment of stamp duty, embedded in the decreeor order.

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A18. The legal position qua clause (vi) can, on the basis of theaforesaid discussion, be summarized as below:

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

(2) If the compromise decree were to create for the first timeright, title or interest in immovable property of the value of Rs 100or upwards in favour of any party to the suit the decree or orderwould require registration.

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(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 the decreewould not require registration.

(4) If the decree were not to embody the terms of compromise,Das was the position in Lahore case, benefit from the terms ofcompromise cannot be derived, even if a suit were to be disposedof 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)Ewould not operate, because of the amendment of this clause byAct 21 of 1929, which has its origin in the aforesaid decision ofthe Privy Council, according to which the original clause wouldhave been attracted, even if it were to encompass property notlitigated.

F19. Now, let us see whether on the strength of the decree passedin Suit No. 215 of 1973, the petitioner could sustain his case as putup in his written statement in the present suit, despite the decreenot having been registered. According to us, it cannot for tworeasons:

G(1) The decree having purported to create right or title in theplaintiff for the first time that is not being a declaration of pre-existing right, did require registration. It may also be pointed outthat the first suit cannot really be said to have been decreed onthe basis of compromise, as the suit was decreed “in view of thewritten statement filed by the defendant admitting the claim ofH

the plaintiff to be correct”. Decreeing of suit in such a situation iscovered by Order 12 Rule 6, and not by Order 23 Rule 3, whichdeals with compromise of suit, whereas the former is on the subjectof judgment on admissions.

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14. In K. Raghunandan and Others v. Ali Hussain Sabir andOthers[4], a decree was passed in respect of disputes between thetwo neighbours over passage. It was held that such decree would requireregistration.

“A statute must be construed having regard to the purpose andobject thereof. Sub-section (1) of Section 17 of the Act makes registrationof the documents compulsory. Sub-section (2) of Section 17 of the Actexcludes only the applications of clauses (b) and (c) and not clause (e)of sub-section (1) of Section 17. If a right is created by a compromisedecree or is extinguished, it must compulsorily be registered if thecompromise decree comprises immovable property which was not thesubject-matter of the suit or proceeding. Clause (vi) is an exception tothe exception. If the latter part of clause (vi) of sub-section (2) of Section17 of the Act applies, the first part thereof shall not apply. As in this casenot only there exists a dispute with regard to the title of the parties overthe passage and the passage, itself, having not found the part of thecompromise, we do not find any infirmity in the impugned judgment.”

15. The judgments of this Court in Bhoop Singh and K.Raghunandan was found to be inconsistent in an order reported inPhool Patti and Another v. Ram Singh (Dead) Through Lrs. andAnother[5] and the matter was thus referred to a larger Bench. The largerBench in the judgment reported as Phool Patti and Another v. RamSingh (Dead) Through Lrs. and Another[6] did not find inconsistenciesbetween the two judgments.

16. Bhoop Singh was a case dealing with both the situations,decree between the parties where the decree holder does not have anypre-existing right in the property and also the situation where decreeholder has a pre-existing right. It was the second situation where thedecree holder has a pre-existing right in the property, it was found that 4 (2008) 13 SCC 1025 (2009) 13 SCC 226 (2015) 3 SCC 465

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Adecree does not require registration. In K. Raghunandan case, thedispute was not amongst the family members but between neighboursregarding right over passage. Obviously, none of them had any pre-existing right over the immovable property in question.

17. In view of enunciation of law in Bhoop Singh’s case, we findBthat the judgment and decree of the High Court holding that the decreerequires compulsory registration is erroneous in law. The compromisewas between the two brothers consequent to death of their father andno right was being created in praesenti for the first time, thus notrequiring compulsory registration. Consequently, the appeal is allowedand the suit is decreed.C

Devika Gujral

Appeal allowed.

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