REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.5167 of 2010

KHUSHI RAM & ORS. …APPELLANT(S)

VERSUS

NAWAL SINGH & ORS. …RESPONDENT(S)

J U D G M E N T

ASHOK BHUSHAN, J.

This appeal has been filed by the plaintiffs ofCivil Suit challenging the judgment dated 16.04.2009of High Court of Punjab & Haryana dismissing thesecond appeal filed by the appellant.

2.The brief facts of the case as emerged from thepleadings of the parties are:

2.1One Badlu, who was the tenure-holder ofagricultural land situate in Village GarhiBajidpur, Tehsil and District Gurgaon, hadtwo sons Bali Ram and Sher Singh. Sher Singh died in the year 1953 issueless leaving hiswidow Smt. Jagno.

2.2Plaintiffs-appellants are descendents of BaliRam. After death of Sher Singh, his widowinherited share of her late husband, i.e.,the half of the agricultural property ownedby Badlu. A Civil Suit No.317 of 1991 wasfiled by Nawal Singh and two others againstSmt. Jagno in the Court of Sub-Judge, Gurgaonclaiming decree of declaration as owners inpossession of the agricultural land mentionedin the suit to the extent of half sharesituate in Village Garhi Bajidpur. Theplaintiffs claim was that Smt. Jagno, who wassharer of the half share, has in a familysettlement settled the land in favour of theplaintiffs, who were the brother’s sons ofSmt. Jagno.

2.3Smt. Jagno filed a written statement in thesuit admitting the claim of the plaintiffs.Smt. Jagno also made a statement in the suitaccepting the claim of plaintiffs, the trial court vide its judgment and decree dated19.08.1991 passed the consent decree infavour of the plaintiffs declaring theplaintiffs owners in possession of the halfshare in the land.

2.4The plaintiffs, who were descendents ofbrother of husband of Smt. Jagno filed aCivil Suit No.79 of 1991 in the Court ofSenior Sub-Judge Gurgaon praying fordeclaration that the decree passed in CivilSuit No.317 of 1991 dated 19.08.1991 isillegal, invalid and without legal necessity. The plaintiffs also claimed decree ofdeclaration in their favour declaring themowners in possession of land in question. InSuit No.79 of 1991, a joint written statementwas filed by the defendants. Smt. Jagno wasalso defendant No.4 in the civil Suit No.79of 1991. The defendants supported the decreedated 19.08.1991. The defendants No.1 to 3claimed land by family settlement out of loveand affection by the defendant No.4, which family settlement was duly affirmed by CivilCourt decree dated 19.08.1991. 2.5The trial court framed nine issues. IssueNo. 5 being “Whether the decree dated19.08.1991 passed in civil suit no.317/91titled Nawal Singh Etc. Vs. Smt. Jagno passedby Sh. K.B. Aggarwal SJIC, Gurgaon isillegal, invalid without jurisdiction andagainst custom, without legal necessity andconsideration and a result of fraud and undueinfluence and is liable to be set aside?2.6Issue Nos. 2 to 5 were answered in favour ofdefendants. The trial court also rejected the argument of the plaintiffs that inabsence of registration of decree, no rightor title would pass in favour of thedefendants. Trial court held thatregistration is required when fresh rightsare created for the first time by virtue ofdecree itself. It was held that in the casein hand, defendants were having pre-existingright in the suit property under as in a family settlement defendant No.4 acknowledgedthem as owner and surrendered the possessionof the suit property in their favour at thetime of family settlement and the decreedated 19.08.1991 merely affirms their pre-existing rights and hence, does not require registration.

2.7The plaintiffs aggrieved by the judgmentfiled first appeal before the learnedDistrict Judge, which too was dismissed. TheFirst Appellate Court held that under Section14(1) of the Indian Succession Act, a Hindufemale become full owner of the property,which she acquires before the commencement ofthe Act and not as a limited owner. TheFirst Appellate Court also held thatdefendants being near relations of defendantNo.4, they cannot be said to be strangers toher. First Appellate Court also held thatdecree did not require registration. The findings of the trial court were affirmed bythe First Appellate Court dismissing the appeal. Aggrieved against the judgment ofthe First Appellate Court, the plaintiffsfiled R.S.A. No.750 of 2002. Second appealwas admitted on following question of law:-

“Whether in the absence of anypre-existing right with thedefendant- respondents 1 to 3,a decree ( Exhibit P.2)suffered by Jagno (who isfather’s sister of defendant-respondent) requiredregistration under Section17(1) of the IndianRegistration Act, 1908?”

2.8 The High Court answered the above questionof law against the plaintiffs and in favourof the defendants-respondents. The HighCourt held that judgment and the decreerendered in Civil Suit No.317 of 1991 dated19.08.1991 merely recognise the existingright which was created by the oral familysettlement. High Court further held thatapart from relationship of Smt. Jagno withdefendants-respondents 1 to 3, she hasdeveloped close affinity, love and affectionfor defendant respondent Nos.1 to 3 as perthe findings recorded by the learned Courts below. The High Court dismissed the secondappeal, aggrieved against which judgment,this appeal has been filed.

3.We have heard Shri Ranbir Singh Yadav, learnedcounsel for the appellant and Shri Manoj Swarup,learned senior counsel for the respondent.

4.Learned counsel for the appellants, Shri Yadavsubmits that no family settlement could have beenentered by Smt. Jagno in favour of defendant Nos.1 to3, they being strangers to the family. A Hindu widowcannot constitute a Joint Hindu Family with thedescendants of her brother, i.e., her parental side.Family settlement can take place only betweenmembers, who have antecedent title or pre-existingright in the property proposed to be settled. Smt. Jagno could have transferred her absolute share infavour of the respondents or to any stranger only inaccordance with law by complying with the provisionsof the Transfer of Property Act, 1882, the IndianRegistration Act, 1908 and the Indian Stamp Act, 1899. Learned counsel further contends thatregistration of compromise decree was compulsory byvirtue of Section 17 of the Indian Registration Actand the decree dated 19.08.1991 having not beenregistered, it did not confer any valid title to thedefendant Nos.1 to 3. All the Courts below committederror in upholding the decree dated 19.08.1991whereas the decree being an unregistered decree wasliable to be ignored and declared in operative.

5.Shri Manoj Swarup, learned senior counsel for therespondents refuting the submissions of the learnedcounsel for the appellant contends that defendantNos.1 to 3 had pre-existing right in the suitproperty, which was clear from the pleadings of CivilSuit No.317 of 1991. In the above suit, it wascategorically pleaded that familysettlement/arrangement took place about two yearsback and since then plaintiffs are owners inpossession of land and defendant No.4 hadrelinquished all her rights therein.

6.It is submitted that decree passed in the CivilSuit dated 19.08.1991 only declared the existingrights of the defendant Nos.1 to 3, which was basedon the family settlement. It is submitted that thedefendant Nos.1 to 3 being brother’s sons of Smt.Jagno, they were not strangers to Smt. Jagno andfamily settlement could have been very well enteredby Smt. Jagno with them. It is submitted that theexpression “family” for the purpose of familysettlement is not to be given any narrow meaning; itshould be given a wide meaning to cover the members,who are by any means related. It is furthersubmitted that the decree dated 19.08.1991 did not require any registration under Section 17 of theIndian Registration Act, 1908. The decree was passedwith regard to subject matter of the suit property,it was exempted from registration by virtue ofSection 17(2)(vi) of the Indian Registration Act,1908. Shri Swarup further contends that the familysettlement could have been made out of love andaffection with regard to which there was amplepleading in the Civil Suit No.317 of 1991 and out of love and affection defendant No.4, Smt. Jagno couldhave very well settled the properties in favour ofdefendant Nos.1 to 3, her nephews being brother’s sons.

7.Learned counsel for the parties have relied onjudgments of this Court for their respectivesubmissions, which shall be referred to whileconsidering the submissions in detail.

8.The Civil Suit No.79 of 1991, which gives rise tothis appeal was a suit where following reliefs wereclaimed by plaintiffs-appellants:-

“10.That the plaintiffs, therefore, praythat a decree for declaration to theeffect that the decree in question passedin Civil Suit No.317 of 1991 dated19.8.1991 is illegal, invalid, withoutlegal necessity and consideration on thegrounds stated above in the plaint, andthe same does not convey any title infavour of the defendants No.1 to 3 anddoes not effect any reversionary rights ofthe plaintiffs and the plaintiffs areowners in possession of the land inquestion, fully detailed and described inpara no.3 of the plaint above, withconsequential relief of permanentinjunction restraining the defendantsfurther alienating the land in question to anyone else, may kindly be passed infavour of the plaintiffs and against thedefendants with costs of this suit.

Any other relief which this Hon’ble Courtmay deems fit and proper may also begranted to the plaintiffs.”

9. There is no dispute between the parties thatShri Sher Singh, husband of Smt. Jagno had half sharein the agricultural land situate in village GarhiBajidpur, which was suit property. Sher Singh diedin 1953. Smt. Jagno after enforcement of the HinduSuccession Act, 1956 by virtue of Section 14 becamethe absolute owner of the half share of the suitproperty. The bone of contention between the partiescentres round the decree dated 19.08.1991 passed bythe Sub-Judge in Civil Suit No.317 of 1991 filed bydefendant Nos.1 to 3 against Smt. Jagno seekingdeclaration that they are owners in possession of thesuit land. In Civil Suit No.317 of 1991, following was pleaded in paragraphs 2 and 3:-

“2.That the parties are closely relatedto each other, the plaintiffs are nephewsof the deft and constituted a Joint HinduFamily. The deft Smt. Jagno Devi is thedaughter of Sh. Shib Lal, the grand fatherof the plaintiffs.

3.That the defendant is living with theplaintiffs at Village Chakerpur and theplaintiffs are looking after her in herold age and the deft has no issue. Thedeft is very happy with the services ofthe plaintiff rendered to her and out oflove and affection, the deft had allottedthe above mentioned land to the plaintiffsin equal share in a family settlement/arrangement, which took place about 2years back and since then the plaintiffsare owners in possession of the said landand the deft had relinquished all rightstherein.”

10. In the aforesaid suit, written statement wasfiled by Smt. Jagno admitting the claim of thedefendants. The trial court in its decree dated19.08.1991 held following in paragraph 2:-

“2. The defendant appeared and filedwritten statement admitting in toto theclaim of the plaintiffs. Statements ofthe parties were also recorded. In viewof the written statement and statements ofparties, a consent decree in favour of theplaintiffs and against the defendant ispassed for declaration as prayed for,leaving the parties to bear their owncosts. Decree sheet be prepared and filebe consigned to the record room.”

11.In this appeal, following two questions arise forconsideration:-

(1)Whether the decree dated 19.08.1991 passed inCivil Suit No.317 of 1991 requiresregistration under Section 17 of the IndianRegistration Act, 1908?; and

(2)Whether the defendant Nos.1 to 3 werestrangers to defendant No.4 so as to disableher to enter into any family arrangement withdefendant Nos.1 to 3?

Question No.(1)12.There is no dispute that in the earlier CivilSuit No.317 of 1991 in which consent decree waspassed on 19.08.1991, the subject matter of suit wasthe agricultural land situated in Village Garhi,Bajidpur. Further the suit was decreed on thewritten statement filed by Smt. Jagno accepting theclaim of plaintiffs that there was family settlementbetween the parties in which the half share in theland was given to the plaintiffs of Civil Suit No.317of 1991. The question is as to whether the decreepassed on 19.08.1991 required registration under Section 17 of the Indian Registration Act, 1908.Sections 17(1) and 17(2)(vi), which are relevant forthe present case, are as follows:-

“17.Documents of which registration iscompulsory.—(l) The following documentsshall be registered, if the property towhich they relate is situate in a districtin which, and if they have been executedon or after the date on which, Act No. XVIof 1864, or the Indian Registration Act,1866, or the Indian Registration Act,1871, or the Indian Registration Act,1877, or this Act came or comes intoforce, namely:—

(a)instruments of gift of immovableproperty;

(b)other non-testamentary instrumentswhich purport or operate to create,declare, assign, limit or extinguish,whether in present or in future, anyright, title or interest, whether vestedor contingent, of the value of one hundredrupees and upwards, to or in immovableproperty;

(c)non-testamentary instruments whichacknowledge the receipt or payment of anyconsideration on account of the creation,declaration, assignment, limitation orextinction of any such right, title orinterest; and

(d)leases of immovable property from yearto year, or for any term exceeding oneyear, or reserving a yearly rent;

(e)non-testamentary instrumentstransferring or assigning any decree ororder of a Court or any award when suchdecree or order or award purports or operates to create, declare, assign, limitor extinguish, whether in present or infuture, any right, title or interest,whether vested or contingent, of the valueof one hundred rupees and upwards, to orin immovable property:]

Provided that theState Governmentmay, by order published in the OfficialGazette, exempt from the operation of thissub-section any lease executed in anydistrict, or part of a district, the termsgranted by which do not exceed five yearsand the annual rents reserved by which donot exceed fifty rupees.

XXXXXXXXXXXXXXXXXX

(2)Nothing in clauses (b) and (c) of sub-section (l) applies to—

(vi)any decree or order of a Courtexcepta decree or order expressed to be made ona compromise and comprising immovableproperty other than that which is thesubject-matter of the suit or proceeding;or

XXXXXXXXXXXXXXXX”

13. The submission of the learned counsel for theappellant is that there was no existing right in theplaintiffs of Civil Suit No.317 of 1991, hence thedecree dated 19.08.1991 required registration underSection 17(1)(b) since decree created right in favourof the plaintiffs. In support of his submission, hehas placed reliance on judgment of this Court inBhoop Singh Vs. Ram Singh Major and Ors., (1995) 5 SCC 709 where this Court held that decree or orderincluding compromise decree granting new right, titleor interest in praesenti in immovable property ofvalue of Rs.100 or above is compulsorily registrable.In paragraphs 17 and 18 of the judgment, followingwas laid down:-

“17.It would, therefore, be the duty ofthe court to examine in each case whetherthe parties have pre-existing right to theimmovable property, or whether under theorder or decree of the court one partyhaving right, title or interest thereinagreed or suffered to extinguish the sameand created right, title or interestinpraesentiin immovable property of thevalue of Rs 100 or upwards in favour ofother party for the first time, either bycompromise or pretended consent. If latterbe the position, the document iscompulsorily registrable.

18.The legal position qua clause (vi)can, on the basis of the aforesaiddiscussion, be summarised as below:

(1) Compromise decree if bonafide, in the sense that thecompromise is not a device toobviate payment of stamp duty and frustrate the law relating toregistration, would not requireregistration. In a conversesituation, it would requireregistration.

(2) If the compromise decree wereto createfor the firsttimeright, title or interest inimmovable property of the value ofRs 100 or upwards in favour of anyparty to the suit the decree ororder would require registration.

(3) If the decree were not toattract any of the clauses of sub-section (1) of Section 17, as wasthe position in the aforesaidPrivy Council and this Court’scases, it is apparent that thedecree would not requireregistration.

(4) If the decree were not toembody the terms of compromise, aswas the position inLahore case,benefit from the terms ofcompromise cannot be derived, evenif a suit were to be disposed ofbecause of the compromise in question.

(5) If the property dealt with bythe decree be not the “subject-matter of the suit or proceeding”,clause (vi) of sub-section (2)would not operate, because of theamendment of this clause by Act 21of 1929, which has its origin inthe aforesaid decision of thePrivy Council, according to whichthe original clause would havebeen attracted, even if it were toencompass property not litigated.”

14.The decree passed in Bhoop Singh’s case (supra) has been quoted in paragraph 2 of the judgment, whichclearly proved that declaration was granted thatplaintiff will be the owner in possession from today.In the above case, the suit was decreed on the basisof compromise though the decree is on the ground thatdefendant admitted the claim of the plaintiff inwritten statement.

15.Learned counsel for the appellant has furtherplaced reliance on another judgment of this Court inCivil Appeal No.890 of 2008 – Mata Deen Vs. Madan Lal& Ors., in which case also, decree was passed on theground of family settlement in favour of the plaintiffs-defendants. The decree passed wasrequired to be compulsorily registered under Section17(2)(vi) of the Registration Act, which having notbeen done, the judgment was set aside and the casewas remanded for the consideration of the question oflaw. The observation of this Court in the abovejudgment is to the following effect:-

“………………………..The second Appellate Courtwas required to examine this aspect of thecase. As it is a substantial question of law which fell for consideration underSection 100 CPC, as could be seen, theimpugned judgment passed by the High Courtis simply concurred with the finding offact concurred with by the first AppellateCourt in its judgment in exercise of itsappellate jurisdiction and it had notadverted to the substantial question oflaw with respect to compulsoryregistration of a decree in favour of thefirst defendant and the consequences fornon registration of a decree under Section17(2)(vi) of the Act and the law laid downby this Court in the case of Bhoop Singhvs. Ram Singh Major & Ors., (1995) 5 SCC709 is not applied to the case on hand,which rendered the impugned judgment anddecree bad in law.

In view of the reasons stated supra,we set aside the impugned judgment anddecree passed by the High Court and remandthe matter to it with a request toreconsider the matter after framing thesubstantial questions of law that wouldarise for consideration and hear theparties and pass appropriate orders inaccordance with law. Since the matter isof 1995 we request the High Court todispose of the matter as expeditiously aspossible but not later than six monthsfrom the date of receipt of a copy of thisOrder. The appeal is disposed ofaccordingly.”

16.From the above judgment, it is not clear as towhether the decree, which was passed on the basis of family settlement, relate to the suit property or theproperty which was covered in the decree was not partof the suit land. The above fact is crucial and itis yet to be determined in view of the remand by thisCourt, hence, the said judgment cannot be said to belend any support to the learned counsel for theappellant.

17.Shri Manoj Swarup, learned counsel for therespondents has on the other hand placed reliance onjudgment of Som Dev and Ors. Vs. Rati Ram and Anr.,(2006) 10 SCC 788.The above was a case where decreewas based on an admission recognising pre-existingrights under family arrangement. This court heldthat in the above case, the decree did not requireregistration under Section 17(1)(b).

18.This Court in a subsequent judgment in K.Raghunandan and Ors. Vs. Ali Hussain Sabir and Ors.,(2008) 13 SCC 102, Court had occasion to interpretSection 17 and laid down following in paragraphs 23, 24, 25 and 28:-

“23.Sub-section (2) of Section 17 of theAct, however, carves out an exceptiontherefrom stating that nothing in clauses(b) and (c) of sub-section (1) of Section17 would inter alia apply to “any decreeor order of a court except a decree ororder expressed to be made on a compromiseand comprising immovable property otherthan that which is the subject-matter ofthe suit or proceeding”. Even if thepassage was not the subject-matter of thesuit, indisputably, in terms of the Codeof Civil Procedure (Amendment) Act, 1976,a compromise decree was permissible.

24.A plain reading of the said provisionclearly shows that a property which is notthe subject-matter of the suit or aproceeding would come within the purviewof exception contained in clause (vi) ofsub-section (2) of Section 17 of the Act.If a compromise is entered into in respectof an immovable property, comprising otherthan that which was the subject-matter ofthe suit or the proceeding, the same wouldrequire registration. The said provisionwas inserted by Act 21 of 1929.

25.The Code of Civil Procedure(Amendment) Act, 1976 does not and cannotoverride the provisions of the Act. Thepurported passage being not the subject-matter of the suit, if sought to betransferred by the respondent-defendantsin favour of the appellant-plaintiffs orif by reason thereof they haverelinquished their own rights andrecognised the rights of the appellant-plaintiffs, registration thereof wasimperative. The first appellate court held so. The High Court also accepted the saidfindings.

28.Bhoop Singh[(1995) 5 SCC 709], interalia, lays down: (SCC p. 715, para 18)

“18. (1) Compromise decree if bonafide, in the sense that thecompromise is not a device toobviate payment of stamp duty andfrustrate the law relating toregistration, would not requireregistration. In a conversesituation, it would requireregistration.

(2) If the compromise decree wereto createfor the firsttimeright, title or interest inimmovable property of the value ofRs 100 or upwards in favour of anyparty to the suit the decree ororder would require registration.”

(emphasis in original)

Thus, indisputably, if the consent termscreate a right for the first time ascontradistinguished from recognition of aright, registration thereof would berequired, if the value of the property isRs 100 and upwards.”

19.In the above judgment, the case of Bhoop Singhwas also considered and distinguished. In a recentjudgment delivered by Two Judge Bench of this Courtof which one of us was also member (Ashok Bhushan, J.), the judgment of Bhoop Singh and Som Dev came tobe considered in Mohammade Yusuf & Ors. Vs. Rajkumar& Ors., 2020(3) SCALE 146. The question arose in theabove case was also non-registration of a decree onthe basis of which the Court has refused to admit thedecree in evidence in a subsequent suit. This Courthad occasion to interpret Section 17 and had alsoconsidered the Bhoop Singh and Som Dev’s case. Inparagraphs 6, 8, 13 and 14 of the judgment, which arerelevant are as follows:-

“6.A compromise decree passed by a Courtwould ordinarily be covered by Section17(1)(b) but sub-section (2) of Section 17provides for an exception for any decreeor order of a court except a decree ororder expressed to be made on a compromiseand comprising immovable property otherthan that which is the subject-matter ofthe suit or proceeding. Thus, by virtue ofsub-section (2)(vi) of Section 17 anydecree or order of a courtdoes notrequire registration. In sub-clause (vi)of sub-section (2), one category isexcepted from sub-clause (vi), i.e., adecree or order expressed to be made on acompromise and comprising immovableproperty other than that which is thesubject-matter of the suit or proceeding.Thus, by conjointly reading Section 17(1)(b) and Section 17(2)(vi), it is clearthat a compromise decree comprisingimmovable property other than which is the subject-matter of the suit or proceedingrequires registration, although any decreeor order of a court is exempted fromregistration by virtue of Section 17(2)(vi). A copy of the decree passed in SuitNo. 250-A of 1984 has been brought onrecord as Annexure P-2, which indicatesthat decree dated 4-10-1985 was passed bythe Court for the property, which wassubject-matter of the suit. Thus, theexclusionary clause in Section 17(2)(vi)is not applicable and the compromisedecree dated 4-10-1985 was not required tobe registered on plain reading of Section17(2)(vi). The High Court referred to thejudgment of this Court inBhoopSinghVs.Ram SinghMajor and Others,(1995) 5 SCC 709, in which case, theprovision of Section 17(2)(vi) of theRegistration Act came for consideration.This Court in the above case whileconsidering clause (vi) laid down thefollowing in paras 16, 17 and 18:

“16. We have to view the reach ofclause (vi), which is an exceptionto sub-section (1), bearing allthe aforesaid in mind. We wouldthink that the exception engraftedis meant to cover that decree ororder of a court, including adecree or order expressed to bemade on a compromise, whichdeclares the pre-existing rightand does not by itself create newright, title or interest inpraesenti in immovable property ofthe value of Rs 100 or upwards.Any other view would find themischief of avoidance ofregistration, which requires payment of stamp duty, embedded inthe decree or order.

17. It would, therefore, be theduty of the court to examine ineach case whether the parties havepre-existing right to theimmovable property, or whetherunder the order or decree of thecourt one party having right,title or interest therein agreedor suffered to extinguish the sameand created right, title orinterest in praesenti in immovableproperty of the value of Rs 100 orupwards in favour of other partyfor the first time, either bycompromise or pretended consent.If latter be the position, thedocument is compulsorilyregistrable.

18. The legal position qua clause(vi) can, on the basis of theaforesaid discussion, besummarised as below:

(1) Compromise decree ifbona fide, in the sensethat the compromise isnot a device to obviatepayment of stamp duty andfrustrate the lawrelating to registration,would not requireregistration. In aconverse situation, itwould requireregistration.

(2) If the compromise decree were to create for the first timeright,title or interest inimmovable property of thevalue of Rs 100 orupwards in favour of anyparty to the suit thedecree or order wouldrequire registration.

(3) If the decree werenot to attract any of the clauses of sub-section(1) of Section 17, as wasthe position in theaforesaid Privy Counciland this Court’s cases,it is apparent that the decree would not require registration.

(4) If the decree werenot to embody the termsof compromise, as was theposition inLahore case,benefit from the terms ofcompromise cannot bederived, even if a suitwere to be disposed ofbecause of the compromisein question.

(5) If the property dealtwith by the decree be notthe “subject-matter ofthe suit or proceeding”,clause (vi) of sub-section (2) would notoperate, because of theamendment of this clauseby Act 21 of 1929, whichhas its origin in theaforesaid decision of the Privy Council, accordingto which the originalclause would have beenattracted, even if itwere to encompassproperty not litigated.”

8.Following the above judgment ofBhoopSingh(supra), the High Court held thatsince the compromise decree dated 4-10-1985 did not declare any pre-existingright of the plaintiff, hence it requiresregistration. The High Court relied on thejudgment ofGurdwara SahibVs.GramPanchayat Village Sirthalaand another(supra) and made following observations inparas 11, 12 and 13:

“11. In the present case, in theearlier suit CS No. 250-A/1984 thepetitioner had claimed declarationof title on the plea of adversepossession and the compromisedecree was passed in the suit. Thevery fact that the suit was basedupon the plea of adversepossession reflects that thepetitioner had no pre-existingtitle in the suit property. Tillthe suit was decreed, thepetitioner was a mere encroacher,at the most denying the title oflawful owner.

12. The Supreme Court in thematter ofGurdwara Sahibv.GramPanchayat VillageSirthalareported in (2014) 1 SCC669 has settled that declaratorydecree based on plea of adversepossession cannot be claimed andadverse possession can be used only as shield in defence by thedefendant. It has been held that:

“7. In the Second Appeal,the relief of ownershipby adverse possession isagain denied holding thatsuch a suit is notmaintainable. Therecannot be any quarrel tothis extent the judgmentsof the courts below arecorrect and without anyblemish. Even if theplaintiff is found to bein adverse possession, itcannot seek a declarationto the effect that suchadverse possession hasmatured into ownership.Only if proceedings filedagainst the appellant andappellant is arrayed asthe defendant that it canuse this adversepossession as ashield/defence.”

13. The plea of the petitionerbased upon Section 27 of theLimitation Act is found to bedevoid of any merit since itrelates to the extinction of theright of the lawful owner afterexpiry of the Limitation Act, butin view of the judgment of theSupreme Court inGurdwaraSahib(supra), the petitionercannot claim himself to be theowner automatically after theexpiry of the said limitation.”

13.This Court inSom Devv.Rati Ram andAnother, (2006) 10 SCC 788 whileexplaining Section 17(2)(vi) and Sections17(1)(b) and (c) held that all decrees andorders of the Court including compromisedecree subject to the exception asreferred that the properties that areoutside the subject-matter of the suit donot require registration. In para 18, thisCourt laid down the following:

“18. ………………… But with respect, itmust be pointed out that a decreeor order of a court does notrequire registration if it is notbased on a compromise on theground that clauses (b) and (c) ofSection 17 of the Registration Actare attracted. Even a decree on acompromise does not requireregistration if it does not takein property that is not thesubject-matter of thesuit………………..”

14.In the facts of the present case, thedecree dated 4-10-1985 was with regard tothe property, which was the subject-matterof the suit, hence not covered byexclusionary clause of Section 17(2)(vi)and the present case is covered by themain exception crafted in Section 17(2)(vi) i.e. “any decree or order of acourt”. When registration of an instrumentas required by Section 17(1)(b) isspecifically excluded by Section 17(2)(vi)by providing that nothing in clauses (b)and (c) of sub-section (1) applies to anydecree or order of the court, we are ofthe view that the compromise decree dated4-10-1985 did not require registration andthe learned Civil Judge as well as the High Court erred in holding otherwise. We,thus, set aside the order of the CivilJudge dated 7-1-2015 as well as thejudgment of the High Court dated 13-2-2017. The compromise decree dated 4-10-1985 is directed to be exhibited by thetrial court. The appeal is allowedaccordingly.”

20.This Court held that since the decree which wassought to be exhibited was with regard to theproperty which was subject matter of suit, hence, wasnot covered by exclusionary clause of Section 17(2)(vi) and decree did not require registration. Theissue in the present case is squarely covered by theabove judgment. We, thus, conclude that in view ofthe fact that the consent decree dated 19.08.1991relate to the subject matter of the suit, hence itwas not required to be registered under Section 17(2)(vi) and was covered by exclusionary clause. Thus,we, answer question No.1 that the consent decreedated 19.08.1991 was not registrable and Courts belowhave rightly held that the decree did not requireregistration.

Question No.2

21.The submission of the learned counsel for theappellant is that the consent decree was passed infavour of nephews of Smt. Jagno, who do not belong tothe family of the plaintiffs-appellants. It issubmitted that plaintiffs-appellants belonged to thefamily of Badlu, who was the tenure-holder of theproperty. It is submitted that the defendants-respondents belong to family of Smt. Jagno beingbrother’s son of Smt. Jagno, i.e., nephews, hence,they belong to different family and no familyarrangement could have been entered with them.

22.Before we answer the above issue, it is necessaryto find out what is the concept of family with regardto which a family settlement could be entered. AThree-Judge bench of this Court in Ram Charan Das Vs.Girjanandini Devi and Ors., 1965 (3) SCR 841 hadoccasion to consider a family settlement regardingthe immovable property, this Court laid down thatevery party taking benefit under a family settlementmust be related to one another in some way and have apossible claim to the property or a claim or even a semblance of a claim. Following was laid down atpage 851:-

“………………..In the first placeonce it is held that the transaction beinga family settlement is not an alienation,it cannot amount to the creation of aninterest. For, as the Privy Councilpointed out inMst. Hiran Bibi case[AIR1914 (PC) 44] in a family settlement eachparty takes a share in the property byvirtue of the independent title which isadmittedto that extentby the otherparties. It is not necessary, as wouldappear from the decision inRangasamiGoundenv.Nachiaopa Gounden[LR 46 I.A.72] that every party taking benefit undera family settlement must necessarily beshown to have, under the law, a claim to ashare in the property. All that isnecessary is that the parties must berelated to one another in some way andhave a possible claim to the property or aclaim or even a semblance of a claim onsome other ground as, say,affection………………

23.A Three Judge Bench in the celebrated judgment ofthis Court in Kale and Ors. Vs. Deputy Director ofConsolidation and Ors., (1976) 3 SCC 119 hadelaborately considered all contours of the familysettlement. This Court laid down that term “family”has to be understood in a wider sense so as to include within its fold not only close relations orlegal heirs but even those persons who may have somesort of antecedent title, a semblance of a claim oreven if they have a spes successionis. In paragraphs9 and 10, this Court laid down following:-

“9.Before dealing with the respectivecontentions put forward by the parties, wewould like to discuss in general theeffect and value of family arrangementsentered into between the parties with aview to resolving disputes once for all.By virtue of a family settlement orarrangement members of a family descendingfrom a common ancestor or a near relationseek to sink their differences anddisputes, settle and resolve theirconflicting claims or disputed titles oncefor all in order to buy peace of mind andbring about complete harmony and goodwillin the family. The family arrangements aregoverned by a special equity peculiar tothemselves and would be enforced ifhonestly made. In this connection, Kerr inhis valuable treatiseKerr on Fraudat p.364 makes the following pertinentobservations regarding the nature of thefamily arrangement which may be extractedthus:

“The principles which apply tothe case of ordinary compromisebetween strangers do not equallyapply to the case of compromisesin the nature of familyarrangements. Family arrangementsare governed by a special equitypeculiar to themselves, and willbe enforced if honestly made, although they have not been meantas a compromise, but haveproceeded from an error of allparties, originating in mistake orignorance of fact as to what theirrights actually are, or of thepoints on which their rightsactually depend.”

The object of the arrangement is toprotect the family from long-drawnlitigation or perpetual strifes which marthe unity and solidarity of the family andcreate hatred and bad blood between thevarious members of the family. Today whenwe are striving to build up an egalitariansociety and are trying for a completereconstruction of the society, to maintain.and uphold the unity and homogeneity ofthe family which ultimately results in theunification of the society and, therefore,of the entire country, is the prime needof the hour. A family arrangement by whichthe property is equitably divided betweenthe various contenders so as to achieve anequal distribution of wealth instead ofconcentrating the same in the hands of afew is undoubtedly a milestone in theadministration of social justice. That iswhy the term “family” has to be understoodin a wider sense so as to include withinits fold not only close relations or legalheirs but even those persons who may havesome sort of antecedent title, a semblanceof a claim or even if they have a spessuccessionis so that future disputes aresealed for ever and the family instead offighting claims inter se and wasting time,money and energy on such fruitless orfutile litigation is able to devote itsattention to more constructive work in thelarger interest of the country. The courts have, therefore, leaned in favour ofupholding a family arrangement instead ofdisturbing the same on technical ortrivial grounds. Where the courts findthat the family arrangement suffers from alegal lacuna or a formal defect the ruleof estoppel is pressed into service and isapplied to shut out plea of the person whobeing a party to family arrangement seeksto unsettle a settled dispute and claimsto revoke the family arrangement underwhich he has himself enjoyed some materialbenefits. The law in England on this pointis almost the same. InHalsbury’s Laws ofEngland, Vol. 17, Third Edition, at pp.215-216, the following apt observationsregarding the essentials of the familysettlement and the principles governingthe existence of the same are made:

“A family arrangement is anagreement between members of thesame family, intended to begenerally and reasonably for thebenefit of the family either bycompromising doubtful or disputedrights or by preserving the familyproperty or the peace and securityof the family by avoidinglitigation or by saving itshonour.

The agreement may be impliedfrom a long course of dealing, butit is more usual to embody or toeffectuate the agreement in a deedto which the term “familyar rangement” is applied.

Family arrangements aregoverned by principles which arenot applicable to dealings between strangers. The court, whendeciding the rights of partiesunder family arrangements orclaims to upset such arrangements,considers what in the broadestview of the matter is most for theinterest of families, and hasregard to considerations which, indealing with transactions betweenpersons not members of the samefamily, would not be taken intoaccount. Matters which would befatal to the validity of similartransactions between strangers arenot objections to the bindingeffect of family arrangements.”

10.In other words to put the bindingeffect and the essentials of a familysettlement in a concretised form, thematter may be reduced into the form of thefollowing propositions:“

(1) The family settlementmust be a bona fide one so as toresolve family disputes and rivalclaims by a fair and equitabledivision or allotment ofproperties between the variousmembers of the family;

(2) The said settlement mustbe voluntary and should not beinduced by fraud, coercion orundue influence;

(3) The family arrangement maybe even oral in which case noregistration is necessary;

(4) It is well settled that registration would be necessary only if the terms of the familyarrangement are reduced intowriting. Here also, a distinctionshould be made between a documentcontaining the terms and recitalsof a family arrangement madeunderthe documentand a mere memorandumprepared after the familyarrangement had already been madeeither for the purpose of therecord or for information of thecourt for making necessarymutation. In such a case thememorandum itself does not createor extinguish any rights inimmovable properties and thereforedoes not fall within the mischiefof Section 17(2) of theRegistration Act and is,therefore, not compulsorilyregistrable;

(5) The members who may beparties to the family arrangementmust have some antecedent title,claim or interest even a possibleclaim in the property which isacknowledged by the parties to thesettlement. Even if one of theparties to the settlement has notitle but under the arrangementthe other party relinquishes allits claims or titles in favour ofsuch a person and acknowledges himto be the sole owner, then theantecedent title must be assumedand the family arrangement will beupheld and the courts will find nodifficulty in giving assent to thesame;

(6) Even if bona fidedisputes, present or possible,which may not involve legal claimsare settled by a bona fide familyarrangement which is fair andequitable the family arrangementis final and binding on theparties to the settlement.”

24.After reviewing the earlier decision, this Courtlaid down following in paragraph 19:-

“19.Thus it would appear from areview of the decisions analysed abovethat the courts have taken a very liberaland broad view of the validity of thefamily settlement and have always tried touphold it and maintain it. The centralidea in the approach made by the courts isthat if by consent of parties a matter hasbeen settled, it should not be allowed tobe reopened by the parties to theagreement on frivolous or untenablegrounds.”

25.In the above case, the Kale, with whom the twosisters of his mother entered into family settlementwas not a legal heir within meaning of U.P. TenancyAct, 1939 but the family settlement entered with Kalewas upheld by this Court. Following was laid down inparagraph 27:-

“27.As regards the first point it appearsto us to be wholly untenable in law. Fromthe principles enunciated by us and the case law discussed above, it is absolutelyclear that the word “family” cannot beconstrued in a narrow sense so as toconfine the parties to the familyarrangement only to persons who have alegal title to the property. Even so itcannot be disputed that appellant Kalebeing the grandson of Lachman andtherefore a reversioner at the time whenthe talks for compromise took place wasundoubtedly a prospective heir and also amember of the family. Since Respondents 4and 5 relinquished their claims in favourof appellant Kale in respect of KhatasNos. 5 and 90 the appellant, according tothe authorities mentioned above, would bedeemed to have antecedent title which wasacknowledged by Respondents 4 and 5. Apartfrom this there is one more importantconsideration which clearly shows that thefamily arrangement was undoubtedly a bonafide settlement of disputes. Under thefamily arrangement as referred to in themutation petition the Respondents 4 and 5were given absolute and permanent rightsin the lands in dispute. In 1955 when thecompromise is alleged to have taken placethe Hindu Succession Act, 1956, was notpassed and Respondents 4 & 5 would haveonly a limited interest even if they hadgot the entire property which wouldultimately pass to appellant Kale aftertheir death. Respondents 4 & 5 thoughtthat it would be a good bargain if bydividing the properties equally they couldretain part of the properties as absoluteowners. At that time they did not knowthat the Hindu Succession Act would bepassed a few months later. Finally thecompromise sought to divide the propertiesbetween the children of Lachman, namely,his two daughters and his daughter’s sonappellant Kale in equal shares and was,therefore, both fair and equitable. In fact if Respondents 4 & 5 would have gotall the lands the total area of whichwould be somewhere about 39 acres theymight have to give away a substantialportion in view of the ceiling law. Wehave, therefore, to see the circumstancesprevailing not after the order of theAssistant Commissioner was passed on themutation petition but at the time when theparties sat down together to iron outdifferences. Having regard to thecircumstances indicated above, we cannotconceive of a more just and equitabledivision of the properties than whatappears to have been done by the familyarrangement. In these circumstances,therefore, it cannot be said that thefamily settlement was not bona fide.Moreover, Respondents 4 and 5 had at nostage raised the issue before the revenuecourts or even before the High Court thatthe settlement was not bona fide. The HighCourt as also Respondent 1 have bothproceeded on the footing that thecompromise was against the statutoryprovisions of law or that it was notregistered although it should have beenregistered under the Registration Act.”

26.Reverting to the facts of the present case,admittedly, the defendants-respondents were nephews,i.e., brother’s sons of Smt. Jagno. We need to lookinto the Hindu Succession Act, 1956, Section 15,which deals with the general rules of succession inthe case of female Hindus for properties inherited byfemale Hindus, which are devolved in according to Sections 15 and 16. Section 15(1), which is relevantis as follows:-

“15. General rules of succession in thecase of female Hindus.—(1)The property ofa female Hindu dying intestate shalldevolve according to the rules set out insection 16,—

(a)firstly, upon the sons and daughters(including the children of any pre-deceased son or daughter) and the husband;

(b)secondly, upon the heirs of thehusband;

(c)thirdly, upon the mother and father;

(d)fourthly, upon the heirs of thefather; and

(e)lastly, upon the heirs of the mother.”

27.A perusal of Section 15(1)(d) indicates thatheirs of the father are covered in the heirs, whocould succeed. When heirs of father of a female areincluded as person who can possibly succeed, itcannot be held that they are strangers and not themembers of the family qua the female.

28.In the present case, Smt. Jagno, who as a widowof Sher Singh, who had died in 1953, had succeeded tohalf share in the agricultural land and she was theabsolute owner when she entered into settlement. We, thus, do not find any merit in the submission oflearned counsel for the appellants that thedefendants-respondents were strangers to the family.29.In view of our discussions on above twoquestions, we do not find any merit in this appeal.All the Courts have rightly dismissed the suit of theplaintiffs-appellants, which need no interference.This appeal is dismissed. Parties shall bear theirown costs.

………………….J.

( ASHOK BHUSHAN )

………………….J.

( R. SUBHASH REDDY )

New Delhi,February 22, 2021.

 

 

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