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), 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 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). Mohd. Yusuf v. Rajkumar, (2020) 10 SCC 264.
Tag Archives: Registration Act
Compromise Decree Comprising of Immovable Property Other Than That Which is subject matter of Suit or Proceeding – Requires Registration
A gift deed is required to be compulsorily attested in terms of Section 123 of the Transfer of Property Act, 1882. Similar is the provision in respect of execution of a Will which is required to be attested in terms of Section 63 of the Succession Act, 1925. Section 68 of the Evidence Act makes it mandatory to examine one of the attesting witnesses for the purpose of proving of the execution of the Will but such limitation is not applicable in respect of proof of execution of any document which has been registered in accordance with the provisions of the Registration Act, 1908, unless the execution is specifically denied. Govindbhai Chhotabhai Patel v. Patel Ramanbhai Mathurbhai, (2020) 16 SCC 255.
An arbitration agreement does not require registration under the Registration Act. Even if it is found as one of the clauses in a contract or instrument, it is an independent agreement to refer the disputes to arbitration, which is independent of the main contract or instrument. Therefore having regard to the proviso to Section 49 of the Registration Act read with Section 16(1)(a) of the Arbitration and Conciliation Act, an arbitration agreement in an unregistered but compulsorily registerable document can be acted upon and enforced for the purpose of dispute resolution by arbitration. Garware Wall Ropes Ltd. v. Coastal Marine Constructions and Engineering Ltd., (2019) 9 SCC 209.
In Ratna Shankar Dwivedi v. State of U.P., 2012 (116) RD 17 it was held as under:
“The term ‘market value’ has not been defined under the Act. However there are some precedents laying down certain guidelines as to how and in what manner a market value would be determined. The consensus opinion is that the market value of any property is the price which the property would fetch or would have fetched if sold, in the open market, if sold by a willing seller, unaffected by the special need of a particular purchaser. It is interesting to note that the Act provides first for determination of minimum value of the property and further says that if the market value of the property set forth in the instrument is less than the minimum value determined under the Act, in such case before registering the instrument the registering authority shall refer the instrument to Collector for determination of market value of the property and the proper duty payable thereon and when the Collector determines market value of the property thereafter the parties shall proceed accordingly. Therefore, a market value of the property in all cases cannot be said to be higher than the alleged minimum value determined under the rule by the concerned authority, in as much as, it is only a kind of guideline provided to the authorities for the purpose of considering as to whether the proper stamp duty is being paid by setting forth true market value of the property in question in the instrument. The various provisions with respect to minimum value etc. are only in aid and assistance of the authorities to find out true amount of consideration on which the parties have entered into transaction so that the correct duty is collected therefrom.”
It has also been repeatedly held that once a document is registered and stamp duty is paid, burden to prove that the value mentioned in the instrument was less than the market value is upon Collector. Ganga Dhar Gupta v. CCRA, 2019 (4) AWC 3587.
To put binding effect and the essentials of a family settlement in a concretized form, the matter may be educed into the form of following propositions:
(1) The family settlement must be 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 oral even in which case no registration is necessary.
(4) It is well settled that registration would be necessary only if the terms of the family arrangements 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 not 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 dispute, present or possible, which may not involve legal claims are settled by a bona fide family arrangement which is fair and equitable is final and binding on the parties to the settlement. Smt. Rama Devi v. Mahendra Pal, 2016 (114) ALR 852.