Madras High Court
A.C. Lakshmipathy And Another vs A.M. Chakrapani Reddiar And Five Others on 14 November, 2000
Equivalent citations: AIR2001MAD135, (2001)1MLJ1, AIR 2001 MADRAS 135, (2002) 2 LANDLR 257, (2001) 1 MAD LW 257, (2001) 2 RECCIVR 23, (2001) 1 ICC 755, (2001) 2 CIVILCOURTC 105
Author: C. Nagappan
Bench: C. Nagappan
ORDER Mr. A.S. Venkatachalamoorthy, J.
1. O.S.A.No.237 of 2000 has been filed by the plaintiff in the suit C.S.No.545 of 1985 against the order passed by a learned single Judge, holding that the unregistered document dated 29.12.1974 styled as 'Memorandum of partial partition' can be admitted in evidence and looked into for collateral purposes. O.S.No.274 of 2000 has been filed by the 2nd defendant in the suit against the same order of the learned single Judge, claiming that the document in question is a mere record of family arrangement and the same does not require registration and is admissible in evidence and can be looked into for all purposes.
2. For the purpose of convenience, we adopt the cause title as given in O.S.A.No.237 of 2000. The appellant as plaintiff, originally instituted the suit as plaintiff as against the father by name Chakrapani Reddiar, since dead, as 1st defendant and his brother by name Kulasekaran as 2nd defendant. Pending suit, the 1st defendant died and the defendants 2 to 7 were recorded as legal representatives of the 1st defendant as per the Order dated 18.3.1987 in Application No.4137 of 1986.
3. The appellant/plaintiff filed the said suit praying the Court as the first relief to pass a decree declaring that the Memorandum dated 29.12.1974 as void, illegal and unenforceable. However, pending suit, the appellant on 9.1.2000, filed a memo to the effect that he is not pressing the above said first relief as he felt the same as unnecessary.
4. The other prayers made by the appellant in the plaint are, to declare that the properties described in the Schedule 'A' to 'D' are joint family properties available for general partition and to allot 1/3rd share in all such family properties and for other reliefs. In substance, the plea of the appellant is that the family continues to be joint even now and that for convenient possession and enjoyment a scheme and separate possession was thought of as between the members of the coparceners, nearly 20 years after the father (1st defendant) assumed charge of the family properties- It is the case of the appellant/plaintiff, the memorandum dated 29.12.1974 though styled as memorandum of partial partition was, in substance and effect an arrangement inter se pursuant to a meaningful Tax Planning arrangement as between the parties for the purpose of possession and enjoyment and that it was never the intention of the parties that the arrangement dated 29.12.1974 was to be understood, interpreted and given effect to as if it was a partition of joint family properties as it is traditionally, customarily and legally understood. It is also contended by the appellant that the so called memorandum of partition made on 29.12.1974 continued and continues still to be an arrangement and not with the intention of the plaintiff or the defendants, partitioning the property.
We are not referring to the other pleadings as the same are not necessary for the disposal of this appeal.
5. The father as 1st defendant filed a written statement in February, 1086. The brother of the appellant as 2nd defendant in the suit filed a separate written statement.
In substance, the case of the defendants as set out in the written statements is that under the memorandum of partial partition of family assets, entered into on 29.12.1974, viz., the document in question, the partition of the house properties and some other properties were recorded. Thereafter, the remaining agricultural lands were also partitioned on 1.9.1997 and that partition which was carried out on 1.1.1997 was reaffirmed by a registered document dated 21.7.1980. The specific case of the defendant is that series of partition commencing from 29.12.1974 to 21.7.1980 resulted in full and final partition of all the joint family properties following the earlier division in status which was acted upon by all the parties and was meant to be of a permanent in nature.
6. When the trial was commenced, the plaintiff was examined as P.W.1 and during the cross examination, the counsel for the defendants wanted to mark the document described as Memorandum recording partial partition of the family. This was objected to by the learned counsel appearing for the appellant on the ground that it is an unregistered and unstamped document which is partly a partition deed and partly a settlement deed.
7. The learned single Judge thought it fit to consider at that stage the admissibility of the document in question. The learned single Judge came to the conclusion that the document in question is an unregistered partition deed and the same can be admitted in evidence only for collateral purposes.
8. Aggrieved by this order of the learned single Judge, the appellant has filed the above appeal. The learned counsel appearing for the appellant put forth the following submissions:
(a.) The document in question is an unstamped and unregistered partition-cum-settlement deed and the same cannot be admitted in evidence and/or looked into for any purpose in view of the clear provisions in the Indian Stamp Act and the Indian Registration Act.
(b.) The learned single Judge has though in the earlier part of the judgment has took note of the fact that it is an unstamped document, in the later part of the judgment while considering the point in issue, has only considered the legal effect of non-registration.
(c.) In the impugned order, atleast in three places, the learned single Judge has referred to the submission made by the counsel for the respon-
dents/defendants that the document in question is an unregistered parti-tion deed and that having taken such a categorical stand, it is not open to the respondents to raise a plea and file a separate appeal, contending that the document in question is a mere record of a family arrangement which need not be stamped and does not require registration and is admissible in evidence.
(d.) In the memorandum of grounds of appeal filed by the 2nd defendant, no ground has been taken to the effect that a stand now taken was in fact taken before the learned single Judge and hence the appeal filed by the respondents has to be dismissed.
9. The respondent inter alia contended before this Court that the document in question was only a record of the family arrangement and hence it did not require stamping or registration. An alternative plea has been raised that even assuming that the document requires stamping and registration, the same could be looked into for collateral purposes.
10. Before we endeavour to decide the issue in question, certain legal positions as settled by various rulings of this Court and Supreme Court, can be briefly referred to.
The term 'partition' has not been explained or defined in the Act, but however in the ruling reported in Radhakrishnayya v. Sarasamma, (DB) , the said term has been explained thus:
"Partition, therefore, is really a process in and by which a joint enjoyment is transformed into an enjoyment in severalty. Each one of the sharers had an antecedent title and therefore, no conveyance is involved in the process as a conferment of a new title is not necessary."
11. A Full Bench of this Court in a case reported in Board of Revenue v. G. Lakshmanasami, had dealt with a case where the respondent executed a document in favour of his daughters stating that he was partitioning his ancestral as well as his self acquired properties between the daughters. But, however, nowhere in the document any right to the daughters or their being co-owners was mentioned. In fact, what was mentioned was that each sharer will become entitled to their share on the date of the execution and be in possession from that date. The Full Bench ruled that the daughters having had no right to the properties, they could not be called as co-owners on the date of the document, and therefore, there could be no partition, but only a settlement.
12. The next aspect to be considered and dealt with is as to who can be the parties to the family arrangement or in other words, how the term 'family' has to be understood while understanding the family arrangement,
13. In Ram Charan Das v. Girja Nandini Devi and others, , the Supreme Court held that the word family has not to be understood in a narrow sense of being group of persons whom the law recognizes as having a right of succession or having a claim to a share in the disputed property. In fact, in a subsequent ruling reported in M/s. D.N. Roy v. State of Bihar, , the Supreme Court held that if the dispute is settled between near relations, then the settlement of dispute can be considered as a family arrangement.
14. A learned single Judge of this Court in a ruling reported in Thirumathi Ramayammal v. Thirumathi Muthammal, 1974 (2) M.L.J. 34 ruled that, ".......it is well established that a party who takes benefit under a family settlement need not necessarily be shown to have, under the law, a share in the property and all that is necessary to show is that the parties are related to each other in someway and have a possible claim to the property or even a semblance of a claim on some ground or other. This is clear from the decision of the Judicial Committee in Rangasami Gounden v. Nachiappa Gounden and the decision of the Supreme Court in Ram Charan Das v. Girja v. Nandini."
In Kale v. Deputy Director of Consolidation, , the Supreme Court ruled, "That is why the term 'family' has to be understood in a wider sense so as to include within its fold not only close relations or legal heirs but even those persons who may have some sort of antecedent title, a semblance of a claim or even if they have a spes successionis so that future disputes are sealed forever and the family instead of fighting claims inter se and wasting time, money and energy on such fruitless and futile litigation is able to devote its attention to more constructive work in the larger interest of the country."
The Supreme Court further held:
"Even if one of the parties to the settlement has no 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 courts will find no difficulty in giving assent to the same."
In Lakshmi Ammal and others v. Chakravarthi and others, , the Supreme Court held that, ".....it is not necessary that the parties being members of the family and claiming right in the property are in law entitled to some share."
The next question is as to when such a family arrangement can be effected or what can be the provocation.
15. It is now settled law that to effect a family arrangement, "all that is necessary is that the parties must be related to one another in some way and have a possible claim to the property or a claim or even a semblance of a claim on some ground as, say affection". It was so held by the Apex Court in Ram Charan Das's case (cited supra) .
For the purpose of completeness, reference can be made to:
a. Pullaiah v. Narasimhan, AIR 1966 SC 1836; b. Shambhu Prasad v. Phool Kumari,
16. In the ruling reported in Kale v. Deputy Director of Consolidation, , the Court after referring to various earlier rulings, observed thus:-
"Conflict of legal claims in praesenti or in futuro is generally a condition for the validity of the family arrangement, it is not necessarily so. Even bona fide disputes, present or possible, which may not involve legal claims will suffice. Members of a joint family may, to maintain peace or to bring about harmony in the family, enter into such a family arrangement. If such a family arrangement is entered into bona fide and the terms thereof are fair in a circumstance of a particular case, Courts will more readily give accent to such an agreement than to avoid it.
Family arrangements are bring about harmony in a family and do justice to its various members and avoid, in anticipation, future disputes which might ruin them all will be favoured."
17. Even disputes based upon ignorance of the parties as to their rights were sufficient to sustain the family arrangement Pullaiah v. Narasimhan, AIR 1966 SC 1836.
To sum up: To effect a family arrangement all that is necessary is that the parties must be related to one another in some way and have a claim or a possible claim to the property or even a semblance of a claim or spes succesionis or even on some other ground as, say, affection or ignorance of the parties of their rights and with the purpose or object of maintaining peace and harmony in the family.
18. Coming back to a partition transaction, the question is, in law, how a partition has to be effected. Section 17 of the Registration Act deals with documents for which registration is compulsory. Section 17(1) reads thus:
"17. Documents of which registration is compulsory:-- (1) The following documents shall be registered, if the property to which they relate is situate in a district in which, and if they have been executed on or after the date on which, Act No. XVI of 1864, or the Indian Registration Act 1866 (20 of 1866) or Indian Registration Act, 1871 (8 of 1871) or the Indian Registration Act, 1877 (3 of 1877) or this Act came or comes into force, namely-
(a)........
(b) other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards to or in immovable property;
19. The Indian Stamp Act, Section 2(15) defines, (15) "Instrument of Partition ".--"Instrument of partition" means any instrument whereby co-owners of any property divide or agree to divide such property in severally, 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.
20. The next relevant provision is Section 3 which deals with instruments chargeable with duty. It is necessary to quote the relevant portion of the Section.
S. 3. Instruments chargeable with duty.--Subject to the provisions of this Act and the exemptions contained in Schedule I, the following instruments shall be chargeable with duty of the amount indicated in that schedule as the proper duty therefore, respectively, that is to say:--
(a) every instrument mentioned in that Schedule which, not having been previously executed by any person, is executed in India on or after first day of July, 1899*;
(b) every bill of exchange payable otherwise than on demand or promissory note drawn or made out of India on or after that day and accepted or paid, or presented for acceptance or payment, or endorsed, transferred or otherwise negotiated, in India; and
(c) every instrument (other than a bill of exchange or promissory note) mentioned in that Schedule, which, not having been previously executed by any person, is executed out of India on or after that day, relates to any property situate, or to any matter or thing done or to be done, in India and is received in India:
Provided that no duty shall be chargeable in respect of-
(1) any instrument executed by or on behalf of, or in favour of the Government in cases where, but for this exemption, the Government would be liable to pay the duty chargeable in respect of such instrument;
(2) any instrument for the sale, transfer or other disposition, either absolutely or by way of mortgage or otherwise, of any ship or vessel, or any part, interest, share or property of or in any ship or vessel registered under the Merchant Shipping Act, 1894, or under Act XIX of 1838, or the Indian Registration of Ships Act, 1841 (X of 1841), as amended by subsequent Acts.
* For Banganapalle read this: "as the first day of December, 1948", GO Ms. No.2722 Rev., dated 16th November, 1948. For Pudukottai read this: "as the 12th day of August, 1948", GO Ms. No.1872, Rev dated 5th August, 1948.
21. Article 45 to the Schedule 1 to the Indian Stamp Act, prescribes the stamp duty payable.
22. A Division Bench of this Court in a ruling reported in Panchapagesa v. Kalyanasundaram, , ruled thus:
"On account of the fact that though the Registration is a very useful and beneficent enactment, as it is extremely stringent, the Act has got to be strictly construed..........."
23. It is now fairly well settled that the co-owners can partition the immovable properties orally. But, however where a document is employed to effectuate a partition or any of the transactions specified in Section 17 of the Registration Act such document must be registered, notwithstanding with the transaction is one which the law does not require to be put into writing. Such unregistered document cannot be looked into to prove the terms of the partition. But, however the same if inadmissible in evidence for the purpose of creating, declaring, assigning, limiting or extinguishing a right to immovable property. The expression "collateral purposes" is no doubt a very vague one and the Court must decide in each case whether the parties who seek to use the unregistered document for a purpose which is really a collateral one or as is to establish the title to the immovable property conveyed by the document. But by the simple devise of calling it "collateral purpose", a party cannot use the unregistered document in any legal proceedings to bring about indirectly the effect which it would have had if it registered.
24. The Courts have in some rulings endeavored to explain what are collateral purposes. It has to be remembered that it is not possible to give an exhaustive list as to what are all the collateral purposes.
This Court, in the ruling reported in Panchapagesa v. Kalyanasundaram , has observed thus:-
"To sum up it is well settled in a long series of decisions which have since received statutory recognition by the Amending Act of 1929 (vide the concluding words of the new proviso to S. 49 of the Registration Act) that a compulsorily registerable but an unregistered document is admissible in evidence for a collateral purpose that is to say, for any purpose other than that of creating, declaring, assigning, limiting or extinguishing a right to immovable property.
The expression "collateral purpose" is no doubt a very vague one and the Court must decide in each case whether the purpose for which it is sought to use the unregistered document is really a collateral one or is to establish directly title to the immovable property sought to be conveyed by the document. But by the simple device of calling it a "collateral purpose", a party cannot use the unregistered document in any legal proceedings to bring about indirectly the effect which it would have had if registered."
Then the Court quoted a passage from the ruling which reads as under:-
"The expression "collateral" transaction in the proviso to Section 49, Registration Act, is not used in the sense of an ancillary or a subsidiary transaction to a main or principal transaction. The transaction as recorded could be a particular or specific transaction. But it would be possible to read in that transaction what may be called the purpose of transaction and what may be called a collateral purpose; the fulfilment of that collateral purpose would bring into existence a collateral transaction, a transaction which may be said to be a part and parcel of the transaction but nonetheless a transaction which runs together with or an parallel lines with the same.
A memo of partition of immovable property belonging to a Hindu joint family which is required to be registered but which is not registered would be inadmissible under the main provisions of Section 49 of the Registration Act as evidence of the terms or details of the partition. But, the partition ie., the severance of joint status which is not required to be effected by a registered instrument would be a collateral transaction, evidence of which would certainly be admissible under the proviso to Section 49 and the memo of partition though unregistered would be admissible to prove the fact of such partition."
Some more rulings in this regard can also be referred to:
(a.) Siromani v. Hemkumar, "Of course, the document is admissible to prove an intention on the part of the coparceners to become divided in status; in other words, to prove that the parties ceased to be joint from the date of the instrument...."
(b.) Roshan Singh v. Zile Singh, AIR 1988 S.C. 881 "It is well-settled that the document though unregistered can however be looked into for the limited purpose of establishing a severance in status, though that severance would ultimately affect the nature of the possession held by the members of the separated family co-tenants....."
(c.) C.S. Kumaraswami v. A. Gounder, "Therefore, we hold that Ex.B-1 is admissible for the collateral purpose, namely, to determine the nature and character of possession and that the other materials on record could also be taken into consideration for the purpose of coming to a decision that the possession of the properties in question by Nallasami Gounder was referable to a division of the properties between the parties concerned, and accordingly Nallasami Gounder and the first defendant had perfected title to the properties by adverse possession."
25. A memorandum or a Chit or a list written and signed by the parties referring to an earlier oral partition which parties intended to be only a record of earlier partition and not a proof of what they have partitioned and how they have partitioned and consequently to claim their rights/title, under the agreement need not be registered.
In the decision reported in Panchapagesa v. Kalyanasundaram, , this Court has observed as under:-
"Bearing these principles in mind, if we examine the partition lists in this case, set out above, they do not constitute compulsorily registerable instruments. These lists had been drawn up with the intention of reciting an already completed oral partition and were not intended by the parties to form an integral and essential part of the process of dividing the properties and to be the only evidence of and to be the formal instrument of partition superseding and embodying the oral bargain and were certainly not intended as the sole repository of the arrangement of partition arrived at by them & constituting the bargain between the parties."
26. The next question would be what is the position is the said document is not only registered, but it is also not stamped i.e. unstamped. Section 35 of the Indian Stamp Act reads thus:
S. 35. Instruments not duly stamped inadmissible in evidence, etc.--No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered or authenticated by any such person or by any public officer, unless such instrument is duly stamped.
Provided that-
(a) any such instrument not being an instrument chargeable with a duty not exceeding ten naye paise only, or a bill of exchange or promissory note, shall;
subject to all just exceptions, be admitted in evidence on payment of the duty with which the same is chargeable, or, in the case of an instrument insufficiently stamped, of the amount required to make up such duty, together with a penalty of five rupees, or, when ten times the amount of the proper duty of deficient portion thereof exceeds five rupees, of a sum equal to ten times such duty or portion.
27. Courts have interpreted the terms any purpose as for each and every purpose including collateral purposes or in other words such document is inadmissible and such a document cannot be looked into for any purpose. A Division Bench of this Court in Pentapatti Nageswara Rao v. Moka Narayanamurthi and another, 1937 (II) M.L.J.805, ruled thus:-
"The section Itself, in my opinion, provides a complete answer to the petitioner's case. If an unstamped document cannot be admitted for any purpose, it must mean, if the words are to be given their ordinary and plain meaning that it cannot be admitted under any circumstances in a civil suit. If the legislature in placing this provision of law on the statute book had intended to allow unstamped instruments to be admitted for collateral purposes, it would surely have said so. It did not say so, but on the other hand, it provided that a negotiable instrument which is insufficiently stamped at the time of execution cannot be properly stamped afterwards, even on payment of a penalty which is allowed in the case of other documents."
A Division Bench of this Court in the ruling reported in Yasodammal v. Janaki Ammal, , held as under:
".....But in the case of an unstamped document it has been held that as the prohibition contained in Section 35 of the Stamp Act is wide and absolute even though in the pleadings the contesting party may admit the execution of the unstamped document, no relief could be granted on the basis of the admission, as it would amount to acting upon the unstamped document."
Also see,
(a) S, Reddy v. Johanputra,
(b) MT. Bibbo v. Gokaran Singh, AIR 1937 All. 101
(c) Subbu Naidu v. Varadarajulu Naidu, 1907 M.L.J. 308
(d) Thaji Beebi v. Tirumalai Appa Pillai, 30 ILR 386
(e) Subbu Naidu v. Varadarajulu Naidu, 1947 MLJ 90
(f) Ram Rattan v. Parama Anand, AIR 1946 PC 51
28. Similarly, Courts have held that the parties cannot let in any oral evidence for proving mortgage and character of possession because on the basis of the unstamped and unregistered document and if such evidence is admitted, it amounts to acting on the unstamped document, which is against Section 35 of the Indian Stamp Act, .
29. The next question is how a family arrangement can be effected and what are the aspects to be considered or noted in testing the validity and binding nature of a family arrangement.
The family arrangement can even be made orally and in which obviously the question of registration does not arise. What is required to be seen is whether the family settlement is a bona fide one so as to resolve family disputes and rival claims at a fair and equitable decision or allotment of properties between the various members of the family. Similarly, the family arrangement should not be result of any fraud or undue influence etc. played on the member/members of the family. In other words such a family arrangement must be voluntary and entered into by the parties on their own accord and free will.
It is only when the family arrangement reduced into writing with the purpose of using that writing as proof of what they had arranged and where the arrangement is brought about by the document as such, that the document requires registration, then it would amount to a document of title declaring for future what rights and what properties the parties to possess.
30. But, however after family arrangement if a mere memorandum is prepared for the purpose of record or for information of the Court for making necessary mutation, such memorandum itself does not create or extinguish any rights in immovable properties and therefore does not fall within the mischief of Section 17 of the Indian Registration Act and therefore, not compulsorily registerable. Similarly, a mere list prepared by the parties, not setting out the entire terms of the family arrangement need be registered.
In the decision , the Apex Court has observed as under :-
"In Tek Bahadur Bhujil v. Debi Singh Bhujil, , it was pointed out by this Court that a family arrangement could be arrived at even orally and registration would be required only if it was reduced into writing. It was also held that a document which was no more than a memorandum of what had been agreed to did not require registration. This Court had observed thus:-
"Family arrangement as such can be arrived at orally, its terms may be recorded in writing as a memorandum of what had been agreed upon between the parties. The memorandum need not be prepared for the purpose of being used as a document on which future title of the parties be founded. It is usually prepared as a record of what had been agreed upon so that there be no hazy notions about it in future. It is only when the parties reduce the family arrangement in writing with the purpose of using that writing as proof of what they had arranged and, where the arrangement is brought about by the document as such, that the document would require registration as it is then that it would be a document of title declaring for future what rights in what properties the parties possess.
............
A Full Bench of the Allahabad High Court in Ramgopal v. Tulshi Ram, AIR 1928 All. 641, 649 has also taken the view that a family arrangement could be oral and if it is followed by a petition in Court containing a reference to the arrangement and if the purpose was merely to inform the Court regarding the arrangement, no registration was necessary. In this connection the full bench adumbrated the following propositions in answering the reference:
We would, therefore return the reference with a statement of the following general propositions:
With reference to the first question:
(1) A family arrangement can be made orally.
(2) If made orally, there being no document, no question of registration arises. With reference to the second question:
(3) If though it could have been made orally, it was in fact reduced to the form of a 'document' registration when the value is Rs.100 and upwards is necessary.
(4) Whether the terms have been 'reduced to the form of a document' is a question of fact in each case to be determined upon a consideration of the nature and phraseology of the writing and the circumstances in which and the purpose with which it was written.
(5) If the terms were not "reduced to the form of a document" registration was not necessary (even though the value is Rs. 100 or upwards); and, while the writing cannot be used as a piece of evidence for what it may be worth, e,g. as corroborative of other evidence or as an admission of the transaction or as showing or explaining conduct.
(6) If the terms were "reduced to the form of a document" and, though the value was Rs.100 or upwards, it was not registered, the absence of registration makes the document inadmissible in evidence and is fatal to proof of the arrangement embodied in the document............
Similarly, the Patna High Court in Awadh Narain Singh v. Narain Mishra, pointed out that a compromise petition not embodying any terms of agreement but merely conveying information to the Court that family arrangement had already been arrived at between the parties did not require registration and can be looked into for ascertaining the terms of family arrangement. This is what actually seems to have happened in the present case when the mutation petition was made before the Assistant Commissioner."
31. Whether the terms have been reduced to the form of a document, is a question of fact and each case has to be determined upon a consideration of the nature and phraseology of the writing and the circumstance in which and the purpose with which it was written.
32. Presence of certain aspects/phraseology/conditions may be indicative of a family arrangement reduced to writing with the purpose of using that as a proof of that they had arranged.
(a) Document setting out all the terms and conditions of the family settlement in extenso.
(b) Document mentioning that till then (execution of the said document) parties have been members of the joint Hindu Family.
(c) Where the document was written immediately after the understanding between the parties with regard to the arrangement.
(d) Document containing Clause to the effect that parties are under the document release their rights under the document.
(e) The settled legal position is that a document must be read as a whole and as to the nature of transaction under the document, it can not be decided by merely seeing the nomenclature.
(f) mere usage of past tense in the document should not be taken as indicative of a prior arrangement. AIR 1998 SC 881
33. However, family arrangement which is compulsorily registerable if not registered, the same can be looked into by the Court for collateral purposes. In this regard we have already referred to in the earlier paragraphs as to what are all the collateral purposes while dealing with the registration of a partition deed, the same will apply here also.
34. The next rather important question that arises for consideration is, if the family arrangement which is registerable as the same in the nature of declaring the title of the parties is also not stamped, whether it can be looked into by the Court for collateral purposes. Section 35 of the Stamp Act has already been extracted by us.
The Courts in various rulings, which we have already referred, interpreted the Section to mean that if a family arrangement which is compulsorily registerable is not stamped, then the same cannot be looked into for any purpose including for collateral purposes.
35. As far as the present case is concerned, while the learned counsel for the appellant would contend that the document in question is partly a partition deed and partly a settlement deed, the respondents have taken a stand in the written statement that it is a memorandum of partial partition and now before this Court in the appeal filed by the respondents, they claim the document in question as a family arrangement.
In the document in question, not only that the plaintiff and defendants 1 and 2 partitioned among themselves some properties, but also had allotted certain immovable properties to the sisters of the plaintiff and the 2nd defendant. The document reads that they entered into an arrangement with a view to keep the family harmony and to preserve amity and good relationship, all the three parties agreed to set apart properties set out in the schedule G.M.K.J. to the respective married daughters.
Eventhough it is not a case that the daughters raised claim for a share in the properties, from the recital of the document, it is clear that those properties were given to the four sisters out of affection and also to maintain good relationship with them. We have already seen that the affection between the parties is a sufficient ground to enter into a family arrangement. We are of the view that the document in question is a family arrangement notwithstanding the fact that the sisters of the plaintiff and 2nd defendant have not signed in it. Simply because the defendants 1 and 2 have taken a stand in the written statement that it was a partition/evidencing partition, it is not as if the Court should accept it or that the defendants are prevented now to take a stand before this Court that it was only a family arrangement and not a partition since under the document in question, the father and sons have also partitioned the properties among themselves.
36. Now, coming to the present case, we are of the view that the document in question is a family arrangement under which the parties claim their rights.
37. We may straight away point out the reasonings for our coming to such a conclusion:-
(A) The document sets out all the terms and conditions of the family arrangement.
(B) The opening words read "Memorandum of partial partition of the family, effected on this 29th Day of December......"
(C) The document reads "the parties to it hereto desire to effect partial partition".
(D) The document recites that 'the parties here to decide to divide immovable properties and are entering this declaration'.
(E) The document reads "the parties hereto renounce, relinquish and release their respective right in respect of properties allotted to the parties other than relating to themselves".
(F) The document refers to right to collect rent, and other terms, viz., "That the parties hereto have the right to collect the rents from the properties allotted to them and to effect the transfer in their individual names in the municipal register, to pay all taxes due thereon and maintain the properties at their individual cost.
The arrears of rent due from the tenants shall be recoverable by the party to whom the property to which arrears relate and have been allotted and similarly the rent paid in advance by the tenants shall be adjusted against the rent payable by the party and also any Court decree obtained for the arrears of the rent due in respect of properties allotted to each one of them.
Liabilities of the family consisting of cash credits in the books of account relating to the parties hereto which have arisen consequent to earlier partial partition occurred thereon and which stands credited in the books of the family in their respective names have been duly considered and taken into account in the manner of the allocation of various properties in this partial partition. It is hereby affirmed by the Kartha, Coparcener No.1 and Coparcener No.2 that in view of the properties allotted to each one of them, they do not have any claim or interest on the amounts standing to their credit in the Oil Mundy and money lending books of account."
(G) The further recitals are "whereas the parties hereto have divided the immovable properties........"
(H) The document reads "this partial partition is absolute and irrevocable". (I) There are two attesting witnesses to the deed.
(J) In the written statement, it is nowhere stated that a prior oral agreement was entered into to divide the properties. The reading of the document and the pleadings would show that immediately after the parties discussing and deciding, the document was written, parties intended that such document to be an evidence of the arrangement and the parties to claim their rights under the deed.
(K) The recitals in the deed that "entering this declaration to put forth the partition already made of immovable properties" would not in the facts and circumstances mean that properties were divided already.
(L) Para.5 of the Written Statement reads "Thus series of partition commenc-ing from 29.12.1974........"
(M) The clause which reads that "whereas the parties hereto have divided the immovable properties and are entering this declaration to put forth partition already made of immovable properties" cannot be understood or mean that there was an earlier arrangement and that the same has been subsequently, at a later point of time, was reduced to writing for the reason that past tense is used. A reading of the document as a whole would only show that immediately after the understanding between the parties, it was reduced to writing.
38. From the above, we are inclined to hold that the document in question was executed with the intention that the document itself should constitute the sole repository as a document of title. When that is so, inasmuch as the document has not been stamped or registered, it cannot be looked into for any purpose.
39. The next question is whether in view of the fact that the appellant himself produced the document before Court along with the plaint, is it be taken that the appellant cannot object to for the admission of the document, so also to look into the contents of the document. It may be straight away said that the settled legal position is that if acting on the admission of execution, the document is admitted and looked into then it would amount to acting upon the unstamped document which will be violative of Section 35 of Indian Stamp Act. Reference can also be made to the following rulings:-
(i)Raghava Reddi v. Venkata Reddi, 1954 M.L.J. 131; (ii) Madho Rao v. Mukund Ram, ; (iii) Mallappa v. Naga, AIR 1919 Mad. 833; (iv) Ram Rattan v. Parma Nand, AIR 1946 P.C. 51; (v) Achutaraman v. Jagannadham, AIR 1933 Mad. 117
40. The next question may arise whether the rule of estoppel will apply and that inasmuch as the appellant was a signatory to the document in question, can it be said that it would be binding on him as it would operate as an estoppel. Such a plea of estoppel can be applied only were the defect in the document is in the nature of formal defect or legal lacunae. . Say for instance, a case where the document is stamped but not registered. But, however in a case where the document is not even stamped as required under the Indian Stamp Act, the defect cannot be said to be the formal legal defect or merely a lacuna, as otherwise, it would go against the very provisions of the Indian Stamp Act.
41. We hold that the document in question is being an unstamped and unregistered, the same cannot be looked into for any purpose. Similarly, oral evidence cannot be let in about the contents of the said document.
42. To sum up the legal position (I) A family arrangement can be made orally.
(II) If made orally, there being no document, no question of registration arises.
(III) If the family arrangement is reduced to writing and it purports to create, declare, assign, limit or extinguish any right, title or interest of any immovable property, it must be properly stamped and duly registered as per the Indian Stamp Act and Indian Registration Act.
(IV) Whether the terms have been reduced to the form of a document is a question of fact in each case to be determined upon a consideration of the nature of phraseology of the writing and the circumstances in which and the purpose with which it was written.
(V) However, a document in the nature of a Memorandum, evidencing a family arrangement already entered into and had been prepared as a record of what had been agreed upon, in order that there are no hazy notions in future, it need not be stamped or registered.
(VI) Only when the parties reduce the family arrangement in writing with the purpose of using that writing as proof of what they had arranged and, where the arrangement is brought about by the document as such, that the document would require registration as it is then that it would be a document of title declaring for future what rights in what properties the parties possess.
(VII) If the family arrangement is stamped but not registered, it can be looked into for collateral purposes.
(VIII) Whether the purpose is a collateral purpose, is a question of fact depends upon facts and circumstances of each case. A person can not claim a right or title to a property under the said document, which is being looked into only for collateral purposes.
(IX) A family arrangement which is not stamped and not registered cannot be looked into for any purpose in view of the specific bar in Section 35 of the Indian Stamp Act.
43. In the result, the appeal viz., OSA.No.237 of 2000 stands allowed and the Judgment of the learned Single Judge dated 14.8.2000 in C.S.No.545 of 1985 is hereby set aside. In view of the above finding, the appeal viz., O.S.A.No.274 of 2000 has to be dismissed and consequently, the same is dismissed. However, there will be no order as to cost in both the appeals.