B.S. Goel And Ors. vs The Registrar, High Court Of Delhi
2006 Latest Caselaw 1812 Del

JUDGMENT

Hima Kohli, J.

1. The present appeals arise out of the order dated 14th January, 2005 passed by the learned Single Judge in a suit filed by appellant No.1 as plaintiff for declaration to the effect that the oral family settlement dated 2nd October, 2002, reduced into writing on 31st October, 2002 by way of a memorandum of family settlement is binding on all the defendants, appellant Nos.2 to 13 herein. By the impugned order, the learned Single Judge dismissed an application (IA No.9823/2003) preferred by the appellant No.5/defendant No.4 in the suit proceedings praying, inter alia, that the objections raised by the registry calling upon the parties to file the court fee and/or stamp duty before drawing up a decree as affixed in a partition suit, are liable to be dropped. The learned Single Judge rejected the said application by holding that the requirement of the registry was as per law and that the compromise application accepted by this Court vide order dated 13th June, 2003 resulted in extinguishing rights and corresponding creation/acceptance of rights in favor of the parties to the suit. Hence it was held that the decree related to immovable property and it shall have to be drawn on stamp paper of adequate value. Aggrieved by the said order, the appellants have filed the present appeals.

2. Along with the present appeals, the appellants have also filed an application (CM No.8100/2006) under Section 5 of the Limitation Act for condensation of delay in filing and refiling of the present appeals totalling to 375 days. As per the report of the registry, there is a delay of 91 days in filing the appeals. The remaining delay is in refiling the same after removal of objections. The appeal was filed in the first instance on 15th April, 2005 and was returned under objections on 23rd April, 2005. Thereafter the same was refiled by the learned Counsel for the appellants only on 6th May, 2006. The counsel for the appellants have sought to explain the delay in filing and subsequently refiling the appeal by stating that in the month of May, 2005, he was detected with the ailment Myasthenia Gravis. The side effect of the said disease resulted in detachment of the retina of his right eye for which he had to undergo surgery and prolonged treatment and thus he was confined to bed for a long time and could rejoin work only in March, 2006. In support of his explanation, the medical record of the treatment of the counsel for the appellants is also enclosed. Upon perusing the same, we are satisfied that sufficient cause has been given in the application for explaining the delay in filing and refiling the appeals. The delay is condoned and the appeals are taken on record.

3. We have heard the learned Counsel for the appellants and have also called for the records of the suit and perused the same. We have also called upon Mrs.Avnish Ahlawat to assist us on behalf of the High Court in deciding the appeals.

4. Before dealing with the legal issue at hand, the following facts need to be taken note of. During the pendency of the suit proceedings, an application (IA No.6636/2003) was filed by all the parties jointly under Order XXIII Rule 3 of the Code of Civil Procedure (for short `CPC') praying inter alia, that the aforesaid suit be decreed in terms of the compromise arrived at between the parties and stated in the application. Vide order dated 13th June, 2003, the learned Single Judge disposed of the suit and ordered that compromise be recorded as stated in para 3 of the aforesaid application and decree be drawn up in terms of the compromise. The aforesaid order is reproduced hereinbelow:

This is an application for decreeing the suit in terms of the compromise arrived at between the parties. Earlier, there was an oral family settlement, a memorandum of which was reduced to writing. The said memorandum of oral family settlement has been filed in this Court and is at pages 29-46 in the main suit file. That memorandum was recorded on 31.10.2002. However, subsequently, there has been slight change in the memorandum of oral family settlement and the changes are reflected in the present application which is the final document of compromise arrived at between the parties. The terms of the compromise are recorded in paragraph 3 of the said application which contains 14 sub-paras. The compromise has been arrived at due to the intervention of the mother of the plaintiff and defendant Nos. 1 to 6. She also happens to be the grand mother of defendant Nos. 7 to 12. The said mother of the plaintiff is an old lady and is seriously ill and she has been able to bring about a complete settlement amongst the parties to the suit. The application has been signed by all the parties to the suit and is supported by individual affidavits given by each of them. An additional affidavit of the wife of plaintiff has also been filed. All the parties are also present in the Court and are represented through counsel also. Let the compromise be recorded as set out out in paragraph three of the application and decree be drawn up in terms of the compromise.

Accordingly, suit as well as the application are disposed of.

5. We have perused the joint application filed by the appellants under Order XXIII Rule 3 readwith Section 151 of the CPC in terms of which the aforesaid compromise has been recorded. In the said application, the parties have stated that an oral family settlement was arrived at on 2nd October, 2002, qua the Hindu joint family properties of late Shri Ram Swarup Goel after his demise, between all his sons and major grandsons. The said oral family settlement was reduced into writing on 31st October, 2002 as a memorandum of family settlement. However, by way of the compromise application, the parties submitted that the aforesaid memorandum of family settlement dated 31st October, 2002 recording the oral family settlement arrived at between the parties on 2nd October, 2002 stood modified in terms of the application and the final compromise as arrived at between the parties, was stated in sub-paras (1) to (14) of para 3 of the application.

6. Section 2(15) of the Indian Stamp Act, 1899 (hereinafter referred to as `the Act') defines the expression `instrument of partition' as below:

2(15) 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.

7. Section 3 of the Act stipulates that every instrument specified in Schedule-1 shall be chargeable with the duty of the amount as indicated in that Schedule as the proper duty thereof. Article 45 of Schedule 1 specifies the proper stamp duty payable on instrument of partition as defined in Section 2(15) of the Act. In the present case, it is apparent that the parties have not relied on the memorandum of family arrangement for the purposes of arriving at a compromise, but have instead detailed the settlement arrived at by them as contained in para 3 of the compromise application. It is settled law that a memorandum of family settlement 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, 1908 and is, therefore, not compulsorily registrable. Hence, any decree drawn by the court recognizing an oral partition between the members of the family which had taken place earlier and concretised in a memorandum of family settlement does not require execution on a stamp paper or require compulsory registration. The same has been the conclusion arrived at in a series of judgments rendered by the Supreme Court and this Court including the following decisions:

(i) Tek Bahadur Bhujil v. Debi Singh Bhujil .

(ii) Maturi Pullaiah v. Maturi Narasimham .

(iii) Kale and Ors. v. Deputy Director of Consolidation and Ors. .

(iv) Bhoop Singh v. Ram Singh Major and Ors. .

(v) Taraknath and Anr. v. Sushil Chandra Dey by Lrs. and Ors.JT 1996 (5) 272.

(vi) K.N.Khanna v. B.K.Khanna (deceased) 2001 II AD(Delhi) 196.

(vii) Mahip Singh Thakur v. Hema Thakur .

8. All the aforementioned judgments reiterate the proposition that only such of the decrees are required to be drawn on a stamp paper, which allot and vest particular share in each co-sharer as it affects partition of a property and hence requires to be stamped. Such a division of property has the effect of creation of an exclusive right of a person in that portion of the property, which falls to his share and extinguishes his right, title or interest in those portions, which fall to the exclusive shares of the others. Such a decree shall be covered by the definition of instrument of partition as defined in clause (15) of Section 2 of the Act. In such a case, the provisions of Article 45 of Schedule 1 would be attracted and stamp duty would be leviable and as a result, the decree shall have to be drawn up on a stamp paper of adequate value.

9. Similar view also finds expression in the case of Col.Raghuvir Singh Dahiya v. Rajinder Singh and Ors. reported as 1997 (2) CLT 320 rendered by one of us (namely Dr. Mukundakam Sharma, J), to the effect that any division and distribution of properties amongst the co-owners of the properties given effect to by a compromise decree, would be in the nature of a decree for partition and would attract levy of stamp duty as per the provisions of the Indian Stamp Act. Incidentally, in a recent judgment in the case of Rama Narang v. Ramesh Narang and Anr. reported as 2006 (2) JCC 792, the Supreme Court, while deciding the maintainability of contempt proceedings in respect of consent terms arrived at between two groups of members of a family, recorded by the court, held as below:

...A compromise decree is as much a decree passed on adjudication. It is not as has been wrongly held by the Calcutta High Court in Nisha Kanto Roy Chowdhury Vs.Smt. Saroj Bashini Goha an agreement between the parties. In passing the decree by consent, the Court adds its mandate to the consent. A consent decree is composed of both a command and a contract. The Bombay High Court's view in Bajranlal Gangadhar Khemka and Anr. v. Kapurchand Ltd. correctly represents the law that a consent decree is a contract with the imprimatur of the Court. `Imprimatur' means `authorised' or `approved'. In other words by passing a decree in terms of a consent order the Court authorizes and approves the course of action consented to. Moreover, the provisions of Order 23 Rule 3 of the Code of Civil Procedure requires the Court to pass a decree in accordance with the consent terms only when it is proved to the satisfaction of the court that a suit has been adjusted wholly or in part by any lawful agreement.

All decrees and orders are executable under the Code of Civil Procedure. Consent decrees or orders are of course also executable....

10. We do not agree with the submission of the learned Counsel for the appellants that no stamp duty is chargeable and that the decree is not required to be engrossed on a stamp paper inasmuch as, in the present case, a decree was not directed to be drawn up by the learned Single Judge by recognizing the oral family settlement arrived at between the appellants and reduced into writing by way of a memorandum of family settlement dated 31st October, 2002. Instead, a decree was directed to be drawn up in terms of the compromise arrived at between the parties as contained in the compromise application, specifically, in para 3 thereof. By virtue of the said compromise, properties were divided, rights of the parties were created and defined in particular properties/portions of properties and rights also got extinguished in other properties/portions of properties which fell in the share of others.

11. The judgments cited by the learned Counsel for the appellants in the cases of Rajinder Kumar v. Iqbal Singh and Ors. reported as 2003 V AD (Delhi) 469 and Ravinder Kumar Rishi v. Sushma Rishi 2003 Rajdhani Law Report 166, do not come to the aid of the appellants. In Rajinder Kumar (supra), the learned Single Judge noted that the application of compromise was arrived at between the family members in terms of the family settlement and disclaimer agreement etc.and hence the same was not required to be engrossed on the stamp paper. In the present case, as observed above, the appellants have not relied on the memorandum of family arrangement for arriving at a compromise, but have chosen to reduce their compromise into writing as contained in the compromise application specifically in para 3 thereof. Hence, the said case is clearly distinguishable from the present case for the reason that the appellants have not merely stated an existing fact in the memorandum of oral family settlement which would not amount to creating or declaring any right, title or interest in the immovable properties. They have agreed to divide immovable property in severalty in terms of the compromise application thus creating rights and extinguishing rights in the immovable properties which compulsorily requires a decree to be drawn up on a stamp paper of adequate value. Reliance on the case of Ravinder Kumar Rishi (supra), is also misplaced for the reason that in the said case, the court was not dealing with the issue of requirement of stamp duty for drawing up a decree of compromise, but the payment of ad-valorem court fee under the Court Fee Act as a condition precedent for drawing up a decree in terms of a compromise arrived at between the parties.

12. Hence, the registry cannot be faulted in calling upon the appellants to file the requisite stamp papers to draw up a decree in the present case. There is no infirmity in the order passed by the learned Single Judge.

13. The appeals being devoid of any merits, are dismissed accordingly.