Shri Rajinder Kumar vs Shri Iqbal Singh And Ors.
2003 Latest Caselaw 688 Del

JUDGMENT

B.N. Chaturvedi, J.

1. A Suit for declaration, partition, rendition of accounts and injunction was filed by Sh. Rajinder Kumar, plaintiff against his six brothers, a sister and mother (since deceased) which was disposed of in terms of a compromise between the parties by an order dated 18th of August, 2000, operative part of which reads as under :

"Accordingly, the application is allowed. The parties will be bound by the terms of the compromise. Terms contained in compromise application, Family Settlement Along with anneuxres and Disclaimer Agreement Along with annexures shall form part of the decree sheet..."

The Registry wrote to the parties concerned vide their letter dated 11th February, 2002 to file a valuation report of the immovable properties from an approved values and to supply requisite non-judicial stamp papers for drawing up the decree, which is being questioned by Sh. Iqbal Singh, defendant No.1, by means of instant application.

2. It is pleaded that late Sh. Ganga Bishan, the father of the plaintiff and defendants No.1 to 7 and husband of defendant No.8 (since deceased) had executed a registered Will dated 25th February, 1989 bequeathing his immovable and movable properties to the plaintiff and the defendants specifying their respective shares therein. The defendants No.1, 2, 4, 6, 7 and 8 clearly made mention of the said Will in their common written statement. The same was, of course, disputed by the plaintiff and defendants No.3 and 5. During the pendency of the suit, it is stated, the parties arrived at an oral family settlement on 1.4.2000, determining and specifying the shares of the respective parties in the properties, movable and immovable, left by their father late Sh. Ganga Bishan. A document evidencing such family settlement was executed in writing on 4th April, 2000 which was later followed by execution of a registered Disclaimer Agreement dated 16th May, 2000. Shares in the immovable properties of late Sh. Ganga Bishan, forming subject matter of the suit, were allotted to respective parties to the suit in terms of the Will dated 25th of February, 1989. The parties to the suit accordingly retained possession of properties which fell to their respective shares. An application under Order 23 Rule 3 CPC was filed before this Court in pursuance of compromise so arrived at between the parties attaching therewith all the relevant papers including registered Disclaimer Agreement dated 16th of May, 2000 and family settlement dated 4th of April, 2000 with annexures thereto. In view of aforesaid, the learned counsel for the applicant contended that since the compromise/settlement in question did not create or declare on its own force any interest in the properties but only accepted the dictates of the Will left by their father, the decree passed in terms of such a compromise is not required to be engrossed on a non-judicial stamp paper and no stamp duty is chargeable thereon as the same did not amount to an 'instrument of partition' as contemplated under Section 2(15) of the Indian Stamp Act (for short 'the act'). Reference was made to a decision of this Court in "Sheikh Mukarramuddin Vs. Sheikh Rahimuddin & Ors." , AIR 1989 Delhi 268 to support the aforesaid argument. It was further contended that a decree passed on the basis of a compromise relating to partition of immovable properties which formed subject matter of the suit does not require registration. A decision of this Court in "P.K. Nangia Vs. Land & Development Officer, New Delhi & Anr.", and a decision of Supreme Court in "Bachan Singh Vs. Kartar Singh & Ors.", JT 2001 (10) SC 64 were relied upon in this context. It was accordingly sought to be maintained that no stamp duty is chargeable in the present case for drawing up the decree. Alternatively, it was argued that the oral family settlement took place on 1st April, 2000 which was reduced into writing on 4th of April, 2000 simply as memorandum of such oral family settlement and as the settlement dated 4th of April, 2000 in substance records what had already been decided by the parties the same did not compulsorily require registration as the family settlement is based on an assumption that there is an antecedent title of some sort between the parties and the settlement/agreement simply acknowledges and defines what that title is. The learned counsel for the applicant-defendant No.1 went on to add that the parties relinquished all claims to the properties other than those falling to their respective shares and recognized the right of the other allottees, as they had previously asserted it, to the portions allotted to them respectively and that explains why no conveyance was required in these cases to pass the title from the one in whom it resided to the persons receiving it under the family settlement. To enforce the argument in this regard a decision of the Supreme Court in "Tek Bahadur Bhujil Vs. Debi Singh Bhujil & Ors.", was referred to.

3. Stamp duty chargeable on an 'instrument of partition', as defined under Section 2(15) of the Act, in terms of Item 45 of the Schedule I to the Act is the same duty as in respect of a Bond (No.15) for the amount of the value of the separated share or shares of the property. An 'instrument of partition' is defined under Section 2 (15) of the Act and it reads thus :

"Instrument of partition" means any instrument whereby co-owners of any property divide or agree to divide such property in severalty, and includes also a final order for effecting a partition passed by any revenue-authority or any Civil Court and an award by an arbitrator directing a partition."

An oral partition of the properties, movable and immovable, left by late Sh. Ganga Bishan, father of parties to the suit, as per recital in the family settlement annexed to the application under Order 23 Rule 3 CPC, made by the parties in the suit, took place on 1st of April, 2000 which was subsequently reduced into writing in the form of family settlement (Annexure P-1) carrying Annexures X, Y and Z thereto detailing the movable and immovable properties which were subject of partition. Though Annexure P-1 is described as a family settlement, the same in fact is not so as a settlement within the meaning of Section 2(24)(b) could come into existence only if the properties belonged to the settlor(s). Notably, in the present case the properties which were subjected to oral partition between the parties to the suit belonged to their father late Sh. Ganga Bishan only, which were inherited by them, being his legal heirs. Thus, the properties so inherited were of the joint family and the document Annexure P-1 could not, therefore, be described as a settlement. Be that as it may, in the present context, the precise question arising for determination is if the document Annexure P-1 described as Family Settlement and the Disclaimer Agreement with annexuers thereto could be treated to be as 'instruments of partition'. Apart from any other instrument whereby co-owners of any property are agreed to divide such property in severalty, a final order for effecting a partition passed by any Civil Court is also covered within the purview of "Instrument of Partition" as defined in Section 2(15) of the Act. In view of the recital in "Family Settlement" (Annexure P-1) and the Disclaimer Agreement dated 15th of May, 2000, an oral partition of the properties, movable and immovable, had already taken place on 1st of April, 2000. Such oral family partition was subsequently reduced into writing in the form of Annexure P-1 on 4th of April, 2000 and a Disclaimer Agreement was also executed by the parties later in pursuance of that oral family partition/division. Both these documents carry list of properties allotted to the respective co-owners in terms of oral partition, made on 1st of April, 2000. Annexure P-1 was thus executed in the nature of a memorandum of oral partition that took place on 1st of April, 2000 and cannot be characterized as 'instrument of partition' as defined in Section 2(15) of the Act.

4. In an earlier decision of this Court in Laxmi Kant Mukt Vs. Jitender Kumar Aggarwal which was a matter in second appeal by the tenant seeking reversal of the judgment of the learned Rent Control Tribunal dismissing the appeal of the tenant but allowing the appeal filed by the landlord and directing the tenant's eviction under Section 14(1)(e) of the Delhi Rent Control Act and wherein one of the arguments advanced on behalf of the appellant was that the decree making the award recognizing an oral partition between the members of the family, which had earlier taken place as rule of the Court having not been executed on a stamp paper and got registered, the respondent landlord could not base his ownership thereon in respect of the demised premises. This argument was, however, not accepted in terms of following observations :

"7. Now turning to the objections of Mr. Dhir I find that the said award recognizing the oral partition between the members of the family, which had earlier taken place and the decree making it a rule of the Court, has been rightly held by the learned Tribunal not to require execution on a stamp paper or to be compulsorily registered. Mr. Dhir has not cited any authority to show that the award recognizing the past family arrangement is to be executed on a stamp paper or requires compulsory registration. This contention has no force....."

5. It is legally permissible to arrive at a family arrangement orally and details thereof may be recorded in writing as a memorandum of what had been agreed upon. The memorandum need not be prepared for the purpose of being used as a document on which future title of the property is to be founded. It is generally prepared as a record of what had been agreed upon, in order that there are no hazy notions about the same. In case of a memorandum of what had been agreed to between the parties the same is not required to be compulsorily registered under Section 17 of the Registration Act [see Tek Bhadur Bhujil (supra)].

6. Clauses (a) to (e) of sub-section (1) of Section 17 of the Registration Act enumerate the kind of documents which require compulsory registration. The decree in the present case being for partition in relation to immovable properties, apart from movable ones, would fall under Section 17(1)(b) to that extent. However, by virtue of the provisions contained in Section 17(2)(vi), Clause (b) of sub-section (1) of Section 17 would not apply to "any decree or order of a Court except the 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." In the present case, the decree in question, passed on the basis of a compromise between the parties, does not comprise immovable properties other than those which were subject matter of the suit. In the circumstances, the case would not fall in the excepted category of a decree or order made on a compromise comprising immovable properties other than those which were not the subject matter of the suit. Consequently, the decree in question would not require compulsory registration. A decision of Division Bench of this Court in P.K. Nangia (supra) would support such a view.

7. The partition or division of the properties, movable as well as immovable, having already taken place by way of an oral partition on 1st of April, 2000, the Family Settlement (Annexure P-1) or Disclaimer Agreement could not be taken as 'instrument of partition' as contemplated under Section 2(15) of the Act. The Partition Decree that was passed in the suit simply took note of an existing fact of partition in pursuance of compromise between the parties and it did not by itself effect the partition of the properties to make it fall within the definition of 'instrument of partition'. In Sheikh Mukarramuddin (supra) where the deceased mother had orally devised and beqeathed her properties in favor of her sons and daughters in shares which they would have inherited according to Muslim Law of Succession and disputes and differences arose between the husband of the deceased on one hand and sons and daughters of the deceased on the other and such disputes and differences were adjudicated upon by an Arbitrator resulting into an award in favor of the sons and daughters of the deceased in view of her oral Will and the Award was eventually made as Rule of the Court, dealing with the question if the Award amounted to an 'instrument of partition' as defined under Section 2(15) of the Act, it was held :

"A perusal of it shows that it does not create or on its own force declare any interest in the properties. It only accepts the Will of Mst. Johra Begam. The sons and daughters of Mst. Johra Begum have got shares in the properties not because of the award as such but on account of the acceptance of Will which had been made by their mother....."

The Supreme Court in its two decisions being Nawab Usman Ali Khan Vs. Sagar Mal, and Mattapalli Chelamayya Vs. Mattapalli Venkataratnam, laid down that merely stating an existing fact in the Award did not amount to creating or declaring, by virtue of the Award itself any right, title or interest in the immovable property. Similar is the situation in the case on hand where the Family Settlement (Annexure P-1), or the Disclaimer Agreement or the Decree passed on the basis of the compromise simply state the existing fact of oral partition that took place on 1st of April, 2000 and does not on its own force purport to create or declare any right, title or interest in the properties constituting subject matter of the suit. Noticing that the Award which was made as Rule of the Court did not amount to an 'instrument of partition', it was held in Sheikh Mukarramuddin (supra) that no stamp duty was chargeable and the decree was not required to be engrossed on a stamp paper.

8. In view of aforesaid, no stamp duty is chargeable and the decree in terms of order dated 18th August, 2000 is not required to be engrossed on stamp paper. The Registry would in these circumstances do well by not insisting on filing the valuation report from an approved values and supply of requisite stamp paper in terms of their letter dated 11th February, 2002.

9. The application is accordingly allowed and the Registry is directed to draw up the decree in terms of order dated 18th August, 2000 without requiring filing of valuation report and supply of stamp papers.