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Khushi Ram vs Nawal Singh on 22 February, 2021

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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
Bajidpur, Tehsil and District Gurgaon, had
Reason:

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
the court to examine in each case whether
the parties have pre-existing right to the
immovable property, or whether under the
order or decree of the court one party
having right, title or interest therein
agreed or suffered to extinguish the same
and created right, title or interest in
praesenti in immovable property of the
value of Rs 100 or upwards in favour of
other party for the first time, either by
compromise or pretended consent. If latter
be the position, the document is
compulsorily registrable.

18. The legal position qua clause (vi)
can, on the basis of the aforesaid
discussion, be summarised as below:

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

28.Bhoop Singh [(1995) 5 SCC 709], inter
alia, lays down: (SCC p. 715, para 18)

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

(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.”
(emphasis in original)

Thus, indisputably, if the consent terms
create a right for the first time as
contradistinguished from recognition of a
right, registration thereof would be
required, if the value of the property is
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
requires registration, although any decree
or order of a court is exempted from
registration by virtue of
Section 17(2)

(vi). A copy of the decree passed in Suit
No. 250-A of 1984 has been brought on
record as Annexure P-2, which indicates
that decree dated 4-10-1985 was passed by
the Court for the property, which was
subject-matter of the suit. Thus, the
exclusionary clause in
Section 17(2)(vi)
is not applicable and the compromise
decree dated 4-10-1985 was not required to
be registered on plain reading of
Section
17(2)(vi). The High Court referred to the
judgment of this Court in Bhoop
Singh Vs. Ram Singh Major and Others,
(1995) 5 SCC 709, in which case, the
provision of
Section 17(2)(vi) of the
Registration Act came for consideration.
This Court in the above case while
considering clause (vi) laid down the
following in paras 16, 17 and 18:

“16. We have to view the reach of
clause (vi), which is an exception
to sub-section (1), bearing all
the aforesaid in mind. We would
think that the exception engrafted
is meant to cover that decree or
order of a court, including a
decree or order expressed to be
made on a compromise, which
declares the pre-existing right
and does not by itself create new
right, title or interest in
praesenti in immovable property of
the value of Rs 100 or upwards.

Any other view would find the
mischief of avoidance of
registration, which requires

24

payment of stamp duty, embedded in
the decree or order.

17. It would, therefore, be the
duty of the court to examine in
each case whether the parties have
pre-existing right to the
immovable property, or whether
under the order or decree of the
court one party having right,
title or interest therein agreed
or suffered to extinguish the same
and created right, title or
interest in praesenti in immovable
property of the value of Rs 100 or
upwards in favour of other party
for the first time, either by
compromise or pretended consent.

If latter be the position, the
document is compulsorily
registrable.

18. The legal position qua clause

(vi) can, on the basis of the
aforesaid discussion, be
summarised as below:

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

(2) If the compromise
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
to which the original
clause would have been
attracted, even if it
were to encompass
property not litigated.”

8. Following the above judgment of Bhoop
Singh (supra), the High Court held that
since the compromise decree dated 4-10-
1985 did not declare any pre-existing
right of the plaintiff, hence it requires
registration. The High Court relied on the
judgment of Gurdwara Sahib Vs. Gram
Panchayat Village Sirthala and another
(supra) and made following observations in
paras 11, 12 and 13:

“11. In the present case, in the
earlier suit CS No. 250-A/1984 the
petitioner had claimed declaration
of title on the plea of adverse
possession and the compromise
decree was passed in the suit. The
very fact that the suit was based
upon the plea of adverse
possession reflects that the
petitioner had no pre-existing
title in the suit property. Till
the suit was decreed, the
petitioner was a mere encroacher,
at the most denying the title of
lawful owner.

12. The Supreme Court in the
matter of
Gurdwara Sahib v. Gram
Panchayat Village
Sirthala reported in (2014) 1 SCC
669 has settled that declaratory
decree based on plea of adverse
possession cannot be claimed and
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
Another, (2006) 10 SCC 788 while
explaining
Section 17(2)(vi) and Sections
17(1)(b) and (c) held that all decrees and
orders of the Court including compromise
decree subject to the exception as
referred that the properties that are
outside the subject-matter of the suit do
not require registration. In para 18, this
Court laid down the following:

“18. ………………… But with respect, it
must be pointed out that a decree
or order of a court does not
require registration if it is not
based on a compromise on the
ground that clauses (b) and (c) of
Section 17 of the Registration Act
are attracted. Even a decree on a
compromise does not require
registration if it does not take
in property that is not the
subject-matter of the
suit………………..”

14. In the facts of the present case, the
decree dated 4-10-1985 was with regard to
the property, which was the subject-matter
of the suit, hence not covered by
exclusionary clause of
Section 17(2)(vi)
and the present case is covered by the
main exception crafted in
Section 17(2)

(vi) i.e. “any decree or order of a
court”. When registration of an instrument
as required by
Section 17(1)(b) is
specifically excluded by
Section 17(2)(vi)
by providing that nothing in clauses (b)
and (c) of sub-section (1) applies to any
decree or order of the court, we are of
the view that the compromise decree dated
4-10-1985 did not require registration and
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
contentions put forward by the parties, we
would like to discuss in general the
effect and value of family arrangements
entered into between the parties with a
view to resolving disputes once for all.
By virtue of a family settlement or
arrangement members of a family descending
from a common ancestor or a near relation
seek to sink their differences and
disputes, settle and resolve their
conflicting claims or disputed titles once
for all in order to buy peace of mind and
bring about complete harmony and goodwill
in the family. The family arrangements are
governed by a special equity peculiar to
themselves and would be enforced if
honestly made. In this connection, Kerr in
his valuable treatise Kerr on Fraud at p.
364 makes the following pertinent
observations regarding the nature of the
family arrangement which may be extracted
thus:

“The principles which apply to
the case of ordinary compromise
between strangers do not equally
apply to the case of compromises
in the nature of family
arrangements. Family arrangements
are governed by a special equity
peculiar to themselves, and will
be enforced if honestly made,

33
although they have not been meant
as a compromise, but have
proceeded from an error of all
parties, originating in mistake or
ignorance of fact as to what their
rights actually are, or of the
points on which their rights
actually depend.”

The object of the arrangement is to
protect the family from long-drawn
litigation or perpetual strifes which mar
the unity and solidarity of the family and
create hatred and bad blood between the
various members of the family. Today when
we are striving to build up an egalitarian
society and are trying for a complete
reconstruction of the society, to maintain
.and uphold the unity and homogeneity of
the family which ultimately results in the
unification of the society and, therefore,
of the entire country, is the prime need
of the hour. A family arrangement by which
the property is equitably divided between
the various contenders so as to achieve an
equal distribution of wealth instead of
concentrating the same in the hands of a
few is undoubtedly a milestone in the
administration of social justice. That is
why the term “family” has to be understood
in a wider sense so as to 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 so that future disputes are
sealed for ever and the family instead of
fighting claims inter se and wasting time,
money and energy on such fruitless or
futile litigation is able to devote its
attention to more constructive work in the
larger interest of the country. The courts
34
have, therefore, leaned in favour of
upholding a family arrangement instead of
disturbing the same on technical or
trivial grounds. Where the courts find
that the family arrangement suffers from a
legal lacuna or a formal defect the rule
of estoppel is pressed into service and is
applied to shut out plea of the person who
being a party to family arrangement seeks
to unsettle a settled dispute and claims
to revoke the family arrangement under
which he has himself enjoyed some material
benefits. The law in England on this point
is almost the same. In Halsbury's Laws of
England, Vol. 17, Third Edition, at pp.

215-216, the following apt observations
regarding the essentials of the family
settlement and the principles governing
the existence of the same are made:

“A family arrangement is an
agreement between members of the
same family, intended to be
generally and reasonably for the
benefit of the family either by
compromising doubtful or disputed
rights or by preserving the family
property or the peace and security
of the family by avoiding
litigation or by saving its
honour.

The agreement may be implied
from a long course of dealing, but
it is more usual to embody or to
effectuate the agreement in a deed
to which the term “family
arrangement” is applied.

Family arrangements are
governed by principles which are
not applicable to dealings between
35
strangers. The court, when
deciding the rights of parties
under family arrangements or
claims to upset such arrangements,
considers what in the broadest
view of the matter is most for the
interest of families, and has
regard to considerations which, in
dealing with transactions between
persons not members of the same
family, would not be taken into
account. Matters which would be
fatal to the validity of similar
transactions between strangers are
not objections to the binding
effect of family arrangements.”

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
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 female Hindu dying intestate shall
devolve according to the rules set out in
section 16,—

(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

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