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Sita Ram Bhama v. Ramvatar Bhama .
Factual and Procedural Background
The plaintiff and the defendant are brothers, sons of late Devi Dutt Verma. According to the plaintiff, their father orally divided his self-acquired residential house and shop on 25-10-1992, a division allegedly recorded later in a document dated 09-09-1994 signed by their mother and two sisters.
In 2010 the plaintiff filed Civil Suit No. 5 of 2010 seeking partition. The defendant’s application under Order 7 Rule 11 CPC was allowed on 19-01-2011; the suit was dismissed for absence of cause of action because, according to the court, partition had already taken place.
Afterwards, the plaintiff instituted Civil Suit No. 4 of 2011, alleging that the defendant had taken possession of the house after breaking open the lock and sought possession, injunction, mesne profits and expenses. The key document relied upon was the 09-09-1994 settlement.
The defendant moved an application under Order 13 Rule 3 CPC, Section 35 & Article 45 of the Stamp Act, and Sections 17 & 49 of the Registration Act, asserting that the 1994 document was inadmissible for want of registration and proper stamp duty. The trial court upheld the objection on 03-03-2015. The plaintiff’s writ petition was dismissed by the Rajasthan High Court on 23-01-2017. The present appeal challenges that dismissal.
Legal Issues Presented
- Whether the document dated 09-09-1994 is a mere memorandum recording an earlier partition or a substantive family settlement/relinquishment deed requiring compulsory registration and adequate stamping.
- If inadmissible for primary purposes, can the unregistered and unstamped document be used for collateral purposes upon payment of stamp duty and penalty?
Arguments of the Parties
Appellant's Arguments
- The 09-09-1994 document is only a memorandum evidencing an earlier partition made by their father on 25-10-1992; hence it is not compulsorily registrable.
- The defendant himself relied on the factum of partition to have Suit No. 5 of 2010 dismissed; therefore he is estopped from objecting to admissibility now.
- Rejection of the document leaves the plaintiff without any remedy in his possession suit.
Respondent's Arguments
- The document is a substantive family settlement that divides property and entails relinquishment of rights by other heirs; it must therefore be registered and properly stamped.
- The trial court and High Court correctly found the document inadmissible, and their orders should be upheld.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Kale v. Director of Consolidation, (1976) 3 SCC 119 | Laid down propositions on what constitutes a family settlement, and when registration is required. | Used to affirm that a written family settlement affecting immovable property is compulsorily registrable unless it is merely a post-fact memorandum. |
| Yellapu Uma Maheswari v. Buddha Jagadheeswararao, (2015) 16 SCC 787 | Held that unregistered documents effecting relinquishment are inadmissible for primary purposes but may be looked at for collateral purposes after impounding and payment of stamp duty. | Formed the basis for allowing the 09-09-1994 document to be used for collateral purposes upon payment of stamp duty and penalty. |
| Chinnappareddigari Peda Mutyala Reddy v. Chinnappareddigari Venkata Reddy, AIR 1969 AP 242 | Explained the three phases of partition and the collateral use of unregistered documents. | Cited through Yellapu to support the distinction between primary and collateral use of an unregistered instrument. |
Court's Reasoning and Analysis
1. The Court examined the nature of the 09-09-1994 document. Because Devi Dutt Verma alone owned the property in 1992, the alleged oral partition could not confer present rights on his sons. On his death in 1993, his widow and daughters became Class I heirs alongside the sons. The 1994 document, by dividing property exclusively between the two brothers, necessarily involved relinquishment of the mother’s and sisters’ interests.
2. Such relinquishment creates or extinguishes rights in immovable property and therefore attracts Section 17 of the Registration Act. As the document was neither registered nor duly stamped, Section 49 rendered it inadmissible for proving the partition itself.
3. Applying Kale, the Court reiterated that only a document that merely records a past oral settlement escapes registration; here, the writing itself effected the settlement.
4. Following Yellapu Uma Maheswari, the Court acknowledged that an unregistered, inadequately stamped instrument may still be used for collateral purposes (e.g., evidence of severance of status or nature of possession) provided it is first impounded and requisite stamp duty with penalty is paid.
Holding and Implications
PARTLY ALLOWED. The Supreme Court upheld the findings of the trial court and High Court that the 09-09-1994 deed is compulsorily registrable and inadmissible for proving partition. However, it ruled that the document may be admitted for collateral purposes if the appellant gets it impounded and pays the applicable stamp duty and penalty.
Implications: The decision reinforces the principle that written family arrangements affecting immovable property must be registered and properly stamped, but also clarifies that such documents can still serve limited evidentiary functions after compliance with stamp requirements. No new precedent was set; rather, existing jurisprudence was applied and affirmed.
Ashok Bhushan, J.— The appellant, who was plaintiff in Civil Suit No. 4 of 2011, has filed this appeal questioning the judgment of the High Court of Judicature for Rajasthan at Jodhpur dated 23-1-2017 2017 SCC OnLine Raj 3764 by which writ petition filed by the appellant against the order dated 3-3-2015 of the Additional District Judge has been dismissed.
2. Brief facts of the case which are necessary to be noted for deciding this appeal are: we shall refer the parties as described in the plaint. The plaintiff and the respondent are real brothers being sons of late Devi Dutt Ji Verma. The plaintiff's case is that his father Devi Dutt Verma on 25-10-1992 decided to divide his self-acquired movable and immovable properties between the plaintiff and the defendant. The late father, however, did not execute any settlement deed. Devi Dutt Verma died on 10-9-1993 and thereafter on 9-9-1994, the plaintiff and the defendant recorded a memorandum of settlement as decided by their father regarding his self-acquired properties. The memorandum of settlement was signed by the mother of the parties as well two sisters had signed as witnesses. According to the memorandum of settlement, both residential house as well as shop in the Aguna Bazar were distributed as decided by their late father.
3. Civil Suit No. 5 of 2010 was filed by the plaintiff praying for partition of the residential house as well as the shop. In the suit an application under Order 7 Rule 11 of the Civil Procedure Code was filed by the defendant, Ramvatar Bhama taking the plea that on 25-10-1992 during the lifetime of Shri Devi Dutt Verma, the father of the plaintiff and the defendant, had partitioned the house and the shop. Southern portion of the house came in the share of the plaintiff and northern part came in the share of the defendant. In confirmation of the earlier partition dated 25-10-1992, the family settlement dated 9-9-1994 was executed which was signed by the plaintiff and defendant along with both the sisters as well as mother. It was pleaded by the defendant, in view of the aforesaid, that there was no cause of action for the plaintiff to file a partition suit. The defendant prayed that the suit of the plaintiff is liable to be dismissed.
4. The trial court vide its order dated 19-1-2011 allowed the application filed by the defendant under Order 7 Rule 11 CPC and dismissed the suit for want of cause of action in favour of the plaintiff. The civil court accepted the case of the defendant that the parties which were in joint family have been divided, there being nothing joint between the parties, there is no cause of action for the plaintiff for filing the suit for partition. The relief for permanent injunction was also held to be related to the partition.
5. Another Civil Suit No. 4 of 2011 was filed by the plaintiff claiming that after dismissal of the earlier suit of the plaintiff on 19-1-2011, the defendant broke open the lock of the house and took possession of the house. The plaintiff prayed for decree of possession against the defendant as well as decree of permanent injunction. The plaintiff also sought for mesne profit and expenses.
6. In the suit, the plaintiff has filed the document dated 9-9-1994 evidencing family settlement which was claimed by the plaintiff as memorandum of settlement. An application under Order 13 Rule 3 CPC and Article 45 and Section 35 of the Stamp Act and Sections 17 and 49 of the Registration Act, was filed by the defendant claiming that document dated 9-9-1994 being not a registered document and being not properly stamped is not admissible in evidence, same may be rejected. The application was replied by the plaintiff. The trial court vide its order dated 3-3-2015 allowed the application of the defendant holding that the document dated 9-9-1994 is a family settlement deed and a relinquishment document which is not admissible as evidence being inadequately stamped and not being registered. Against the said order dated 3-3-2015, writ petition was filed by the plaintiff which was dismissed by the High Court upholding the order of the trial court. The High Court also took the view that so-called family settlement takes away the share of the sisters and mother, therefore, the same was compulsorily registrable. Aggrieved by the said order, the plaintiff has come up in this appeal.
7. Shri Ajit Kumar Sinha, learned Senior Counsel, appearing for the appellant submits that document dated 9-9-1994 is only a memorandum of partition which took place on 25-10-1992 when father of the parties had partitioned the house and the shop. The memorandum of family settlement is not compulsorily registrable. The document itself being not a family settlement rather only a memorandum ought to have been accepted by the trial court. He further submits that in the earlier suit filed by the plaintiff being Suit No. 5 of 2010, the suit was dismissed under Order 7 Rule 11 CPC on the plea of the defendant that the partition has already taken place between the parties as claimed by the plaintiff, hence, no cause of action has arisen for filing a suit for partition. He submits that partition effected by the father of the parties on 25-10-1992 which was subsequently recorded on 9-9-1994 having already been accepted, it is not open for the trial court to reject the document dated 9-9-1994 for being taken in evidence. It is submitted that by order of the court below the plaintiff has become remediless.
8. The learned counsel for the respondent refuting the submission of the learned counsel for the appellant contends that the trial court as well as the High Court has rightly come to the conclusion that document dated 9-9-1994 was compulsorily registrable. It being neither registered nor duly stamped has rightly been rejected by the trial court from being taken in evidence. He submits that the High Court has rightly dismissed the writ petition filed by the plaintiff.
9. We have considered the submissions of the parties and perused the records.
10. The only question which needs to be considered in the present case is as to whether document dated 9-9-1994 could have been accepted by the trial court in evidence or the trial court has rightly held the said document inadmissible. The plaintiff claimed the document dated 9-9-1994 as memorandum of family settlement. The plaintiff's case is that earlier partition took place in the lifetime of the father of the parties on 25-10-1992 which was recorded as memorandum of family settlement on 9-9-1994. There are more than one reasons due to which we are of the view that the document dated 9-9-1994 was not mere memorandum of family settlement, rather a family settlement itself. Firstly, on 25-10-1992, the father of the parties was himself owner of both, the residence and shop being self-acquired properties of Devi Dutt Verma. The High Court has rightly held that the said document cannot be said to be a will, so that the father could have made the will in favour of his two sons, the plaintiff and the defendant. Neither the plaintiff nor the defendant had any share in the property on the day when it is said to have been partitioned by Devi Dutt Verma. Devi Dutt Verma died on 10-9-1993. After his death, the plaintiff, the defendant and their mother as well as sisters become the legal heirs under the Hindu Succession Act, 1956 inheriting the property being a Class I heir. The document dated 9-9-1994 divided the entire property between the plaintiff and the defendant which document is also claimed to be signed by their mother as well as the sisters. In any view of the matter, there is relinquishment of the rights of other heirs of the properties, hence, the courts below are right in their conclusion that there being relinquishment, the document dated 9-9-1994 was compulsorily registrable under Section 17 of the Registration Act.
11. Pertaining to family settlement, a memorandum of family settlement and its necessity of registration, the law has been settled by this Court. It is sufficient to refer to the judgment of this Court in Kale v. Director of Consolidation (1976) 3 SCC 119. The propositions with regard to family settlement, its registration were laid down by this Court in paras 10 and 11:
“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.
11. The principles indicated above have been clearly enunciated and adroitly adumbrated in a long course of decisions of this Court as also those of the Privy Council and other High Courts, which we shall discuss presently.”
(emphasis in original)
12. We are, thus, in full agreement with the view taken by the trial court as well as the High Court that the document dated 9-9-1994 was compulsorily registrable. The document also being not stamped could not have been accepted in evidence and the order of the trial court allowing the application under Order 13 Rule 3 CPC and the reasons given by the trial court in allowing the application of the defendant holding the document as inadmissible cannot be faulted.
13. There is only one aspect of the matter which needs consideration i.e. whether the document dated 9-9-1994, which was inadmissible in evidence, could have been used for any collateral purpose. In a suit for partition, an unregistered document can be relied upon for collateral purpose i.e. severancy of title, nature of possession of various shares but not for the primary purpose i.e. division of joint properties by metes and bounds. Further, an unstamped instrument is not admissible in evidence even for collateral purpose, until the same is impounded. A two-Judge Bench judgment of this Court in Yellapu Uma Maheswari v. Buddha Jagadheeswararao (2015) 16 SCC 787 is appropriate. In the above case also, admissibility of documents, Ext. B-21 dated 5-6-1975 a deed of memorandum and Ext. B-22 dated 4-6-1975 being an agreement between one late Mahalakshamma, Respondent 1-plaintiff and Appellant 1-defendant came for consideration. Objection was taken regarding admissibility which was upheld both by the High Court 2013 SCC OnLine AP 766 and trial court. Matter was taken up by this Court. In the above case, this Court held that the nomenclature given to the document is not decisive factor but the nature and substance of the transaction has to be determined with reference to the terms of the documents. This Court after considering both the documents, B-21 and B-22 held that they require registration. In para 15, the following was held:
“15. It is well settled that the nomenclature given to the document is not decisive factor but the nature and substance of the transaction has to be determined with reference to the terms of the documents and that the admissibility of a document is entirely dependent upon the recitals contained in that document but not on the basis of the pleadings set up by the party who seeks to introduce the document in question. A thorough reading of both Exts. B-21 and B-22 makes it very clear that there is relinquishment of right in respect of immovable property through a document which is compulsorily registrable document and if the same is not registered, it becomes an inadmissible document as envisaged under Section 49 of the Registration Act. Hence, Exts. B-21 and B-22 are the documents which squarely fall within the ambit of Section 17(1)(b) of the Registration Act and hence are compulsorily registrable documents and the same are inadmissible in evidence for the purpose of proving the factum of partition between the parties. We are of the considered opinion that Exts. B-21 and B-22 are not admissible in evidence for the purpose of proving primary purpose of partition.”
14. After holding the said documents as inadmissible, this Court in Yellapu Uma Maheswari case (2015) 16 SCC 787 further proceeded to consider the question as to whether the documents B-21 and B-22 can be used for any collateral purpose. In the above context, the Court accepted the submission of the appellant that the documents can be looked into for collateral purpose provided the appellant-defendant to pay the stamp duty together with penalty and get the document impounded. In paras 16 and 17, the following has been laid down:
“16. Then the next question that falls for consideration is whether these can be used for any collateral purpose. The larger Bench of the Andhra Pradesh High Court in Chinnappareddigari Peda Mutyala Reddy v. Chinnappareddigari Venkata Reddy 1967 SCC OnLine AP 4, AIR 1969 AP 242 has held that the whole process of partition contemplates three phases i.e. severancy of status, division of joint property by metes and bounds and nature of possession of various shares. In a suit for partition, an unregistered document can be relied upon for collateral purpose i.e. severancy of title, nature of possession of various shares but not for the primary purpose i.e. division of joint properties by metes and bounds. An unstamped instrument is not admissible in evidence even for collateral purpose, until the same is impounded. Hence, if the appellant-defendant want to mark these documents for collateral purpose it is open for them to pay the stamp duty together with penalty and get the document impounded and the trial court is at liberty to mark Exts. B-21 and B-22 for collateral purpose subject to proof and relevance.
17. Accordingly, the civil appeal is partly allowed holding that Exts. B-21 and B-22 are admissible in evidence for collateral purpose subject to payment of stamp duty, penalty, proof and relevancy.”
15. Following the law laid down by this Court in the above case, we are of the opinion that the document dated 9-9-1994 may be admissible in evidence for collateral purpose provided the appellant gets the document impounded and to pay the stamp duty together with penalty as has been directed in the above case.
16. In the result, this appeal is partly allowed in the following manner. The order of the trial court as well as the High Court holding that the document dated 9-9-1994 required compulsory registration is upheld. Following the aforesaid view of this Court in Yellapu Uma Maheswari case (2015) 16 SCC 787, this appeal is partly allowed holding that the deed dated 9-9-1994 is admissible in evidence for collateral purpose subject to payment of stamp duty and penalty.
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