A document of partition which provides for effectuating a division of properties in future would be exempt from registration

In K. ARUMUGA VELAIAH v. P.R. RAMASAMY AND ANR, an appeal was filed before the Supreme Court against the order of the Madras High Court dismissing the suit filed by the Appellant seeking share in a joint ancestral property. The contention raised by the learned counsel for the appellant was that the so-called partition which took place in the year 1964 was by virtue of an award passed by the panchayatdars (arbitrators) and the same, not having been registered, was not made a rule of the court and hence had no validity in the eye of law. The counter to the aforesaid argument by learned counsel for the respondent is that the said award did not require registration at all. 

Analysis

The Supreme Court while approving the order of the High Court referred extensively to various judgments and observed that in Division Bench of the Madras High Court in Ramaswamy Ayyar and Anr. v. Tirpathi Naik, ILR 27 Mad 43 , wherein it was observed that it is necessary to read a document in order to ascertain, not what the document intends to convey really but what it purports to convey. In other words, it is necessary to examine not so much what it intends to do, but what it purports to do. The court had held that the real purpose of registration is to secure that every person dealing with the property, where such document requires registration may rely with confidence upon statements contained in the register as a full and complete account of all transactions by which title may be affected. Section 17 of the said Act being a disabling section, must be construed strictly. Therefore, unless a document is clearly brought within the provisions of the section, its non-registration would be no bar to its being admitted in evidence. 

After reviewing several judgments of this Court, the Privy Council and other High Courts, the Supreme Court had with reference to family settlements decided on the following general propositions: 

(1) A family arrangement can be made orally. 

(2) If made orally, there being no document, no question of registration arises. 

(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. 

Even if the family arrangement could not be registered it could be used for collateral purpose, i.e. to show the nature and character of possession of the parties in pursuance of the family settlement and also for the purpose of applying the rule of estoppel which flowed from the conduct of the parties.

Judgment

The Supreme concluded that the said award was a mere arrangement to divide the properties in future by metes and bounds as distinguished from an actual deed of partition under which there is not only a severance of status but also division of joint family properties by metes and bounds in specific properties. Hence it was exempted from registration under Section 17 (2) (v) of the Act. A document of partition which provides for effectuating a division of properties in future would be exempt from registration under section 17 (2) (v). The test in such a case is whether the document itself creates an interest in a specific immovable property or merely creates a right to obtain another document of title. If a document does not by itself create a right or interest in immovable property, but merely creates a right to obtain another document, which will, when executed create a right in the person claiming relief, the former document does not require registration and is accordingly admissible in evidence vide Ranjangam Iyer v. Ranjangam Iyer, AIR 1922 PC 266. 

Note

It would be pertinent to mention here that in an earlier judgement KORUKONDA CHALAPATHI RAO & ANR. vs KORUKONDA ANNAPURNA SAMPATH KUMAR, the Supreme Court has already decided that a family settlement document which merely sets out the existing arrangement and past transaction will not be compulsorily registrable under Section 17(1)(b) of the Registration Act, 1908, if it doesn't by itself creates, declares, limits or extinguishes rights in the immovable properties.