The Delhi High Court has observed that there is no need to register and pay stamp duty on settlements arrived orally between the family and reduced into a Memorandum for remembrance.
The single-judge bench of Justice Pratibh M Singh while allowing application for waiver of stamp duty in a partition suit regarding assets inherited by the various parties, noted:
"It is in the nature of a family settlement which was arrived at between the parties. The partition had been agreed upon between the parties by way of oral agreement with the intervention of their counsels. The memorandum of settlement does not itself partition the properties, but only records the same as an aid of memory."
The Registry in order to prepare the decree sheet directed furnishing of valuation reports of the assets for the purpose of calculating the stamp duty, the waiver of which the application seekks.
During the pendency of the suit pertaining to which the application has been filed, a settlement was arrived at between the family members. Thereafter, the terms of settlement were incorporated into the ‘Memorandum of Family Settlement and Arrangement’.
The Court noted that the memorandum itself makes it clear that parties had orally agreed to partition and the settlement which was agreed upon by the parties had merely been put into writing in the said Memorandum.
The Court noted that the legal heirs of the deceased persons became part owners of the assets belonging to the two deceased.
"The said assets were not transferred to the legal heirs, but have been inherited by them upon the demise of Mr. S.S. Walia and Dr. Urmila Walia. The ‘Memorandum of Family Settlement and Arrangement’ dated 16th October, 2018, is merely a recordal of the oral agreement as to the mode and manner of partition."
The Court added that the issue of registration of family settlements is no longer res integra as it mentioned Kale & Ors Vs. Deputy Directorof Consolidation Ors, 1976 Latest Caselaw 7 SC wherein it was held that if an understanding has been arrived at between the parties previously, and it is only written down in a document after the settlement has been arrived at, the same would not require registration.
"Family settlements are not required to be compulsorily registered, and stamp duty is not required to be compulsorily paid in respect of the same, when the settlement has been arrived at initially as an oral partition and is thereafter put into writing for the purpose of information."
It also mentioned Sita Ram Bhama Vs. Ramvatar Bhama, 2018 Latest Caselaw 202 SC
In view of the above, the Court held that that there is no requirement of valuation of the suit properties in the present case.
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