SH SUNIL AHUJA & ANR. vs SH.PREM AHUJA & ORS.

2024-02-14 Information

$~20
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 14th February, 2024
+ CS(OS) 251/2022 and CRL.M.A. 25148/2022, 7020/2022, 6288/2023
SH SUNIL AHUJA & ANR. ….. Plaintiffs
Through: Mr Puneet Taneja, Mr Manmohan Singh Narula & Mr Amit Yadav, Advs. (M-9999827572)

versus
SH. PREM AHUJA & ORS. ….. Defendants
Through: Mr. Dhruv Rajpoot, Adv. for D-1 to 4.
CORAM:
JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J. (Oral)
1. This hearing has been done through hybrid mode.
2. The present suit has been filed, inter alia, challenging the family settlement dated 2nd August, 2021, between the Plaintiff No.1 and the Defendant Nos. 1 & 3 and the Relinquishment Deed dated 21st September, 2021 executed by the Plaintiffs in favour of the Defendants.
3. The matter was taken up for hearing of some of the pending applications. The disputes are between siblings. Plaintiff No.1, Defendant No.1 and Defendant Nos.3 to 5 are real brothers and sisters and sons and daughters of Late Bhagwan Das Ahuja. Plaintiff No.2 is the wife of Plaintiff No.1 and Defendant No.2 is the wife of Defendant No.1. Their names are set out herein below:
Mr. Sunil Ahuja (son) – Plaintiff No.1
Ms. Anita Ahuja (wife of Plaintiff No.1). – Plaintiff No.2
Mr. Prem Ahuja (son) – Defendant No.1
Smt. Gagan Ahuja (wife of Defendant No.1).- Defendant No.2
Smt. Chander Kanta Malhotra (daughter) – Defendant No.3
Smt. Usha Kiran Kataria (daughter) – Defendant No.4
Smt. Shashi Sial (daughter) – Defendant No.5
4. A deed of family settlement was executed on 2nd August, 2021 against which various declarations are sought. The grievance appears to be that the Defendants have not abided by the family settlement and hence, the family settlement ought to be cancelled, declared void and be held to be not binding on the parties.
5. Mr. Taneja, ld. Counsel appearing for the Plaintiffs submits that the settlement, in fact, had taken place in front of the chartered accountant of the parties and the properties were divided between the Plaintiffs and Defendants. The residence at 7/56, Rajender Nagar, Delhi was valued at Rs.4.5 crores and fell into the share of the Defendants, but the value was taken as Rs.3.25 crores as there were some other relatives who were occupying the property, who were to be paid some money to vacate the property. Accordingly, Rs.1.25 crores was paid by the Plaintiffs to the Defendants towards the said residence. However, the Defendants only spent Rs. 30 lakhs in evicting the said occupants. The remaining amount ought to be therefore returned to the Plaintiffs. Further grievance of the Plaintiffs is that in respect of Khayala property and other properties, which were falling in the share of the Plaintiffs, the relinquishment deeds are not being executed by the Defendants. The Defendants also have to resign from one of the businesses. In addition, it is submitted that a sum of Rs.21 lakhs has been paid in excess to the Defendants.
6. On behalf of the Defendants, it is submitted that the Defendants are willing to fully abide by the family settlement, which is placed on record. It is submitted on behalf of the Defendants that Rs.21 lakhs is not payable due to certain withdrawals, which were unlawfully made by the Plaintiffs. It is further submitted that the documents, which the Defendants wish to place on record, would have demonstrated the same. However, ld. Counsel for the Defendants submits that the Defendants are fully willing to abide by the family settlement if the Plaintiffs are willing to abide by the same.
7. The Court has perused the settlement dated 2nd August, 2021, along with the annexures to the same. The said settlement is a comprehensive settlement between the parties and has been signed by the parties. It is not even disputed that the same has been executed between the parties.
8. The Supreme Court has, in categorical terms, in Kale and Others v. Deputy Director of Consolidation and Others, (1976) 3 SCC 119 held that the family settlements have to be given utmost recognition and ought to be enforced even if there are any technical difficulties. Relevant extract of the said judgment is extracted below:
9. Before dealing with the respective contentions put forward by the parties, we would like to discuss in general the effect and value of family arrangements entered into between the parties with a view to resolving disputes once for all. By virtue of a family settlement or arrangement members of a family descending from a common ancestor or a near relation seek to sink their differences and disputes, settle and resolve their conflicting claims or disputed titles once for all in order to buy peace of mind and bring about complete harmony and goodwill in the family. The family arrangements are governed by a special equity peculiar to themselves and would be enforced if honestly made. In this connection, Kerr in his valuable treatise Kerr on Fraud at p. 364 makes the following pertinent observations regarding the nature of the family arrangement which may be extracted thus:
The principles which apply to the case of ordinary compromise between strangers do not equally apply to the case of compromises in the nature of family arrangements. Family arrangements are governed by a special equity peculiar to themselves, and will be enforced if honestly made, although they have not been meant as a compromise, but have proceeded from an error of all parties, originating in mistake or ignorance of fact as to what their rights actually are, or of the points on which their rights actually depend.
The object of the arrangement is to protect the family from long-drawn litigation or perpetual strifes which mar the unity and solidarity of the family and create hatred and bad blood between the various members of the family. Today when we are striving to build up an egalitarian society and are trying for a complete reconstruction of the society, to maintain .and uphold the unity and homogeneity of the family which ultimately results in the unification of the society and, therefore, of the entire country, is the prime need of the hour. A family arrangement by which the property is equitably divided between the various contenders so as to achieve an equal distribution of wealth instead of concentrating the same in the hands of a few is undoubtedly a milestone in the administration of social justice. 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 for ever and the family instead of fighting claims inter se and wasting time, money and energy on such fruitless or futile litigation is able to devote its attention to more constructive work in the larger interest of the country. The courts have, therefore, leaned in favour of upholding a family arrangement instead of disturbing the same on technical or trivial grounds. Where the courts find that the family arrangement suffers from a legal lacuna or a formal defect the rule of estoppel is pressed into service and is applied to shut out plea of the person who being a party to family arrangement seeks to unsettle a settled dispute and claims to revoke the family arrangement under which he has himself enjoyed some material benefits. The law in England on this point is almost the same. In Halsbury’s Laws of England, Vol. 17, Third Edition, at pp. 215-216, the following apt observations regarding the essentials of the family settlement and the principles governing the existence of the same are made:
A family arrangement is an agreement between members of the same family, intended to be generally and reasonably for the benefit of the family either by compromising doubtful or disputed rights or by preserving the family property or the peace and security of the family by avoiding litigation or by saving its honour.
The agreement may be implied from a long course of dealing, but it is more usual to embody or to effectuate the agreement in a deed to which the term family arrangement is applied.
Family arrangements are governed by principles which are not applicable to dealings between strangers. The court, when deciding the rights of parties under family arrangements or claims to upset such arrangements, considers what in the broadest view of the matter is most for the interest of families, and has regard to considerations which, in dealing with transactions between persons not members of the same family, would not be taken into account. Matters which would be fatal to the validity of similar transactions between strangers are not objections to the binding effect of family arrangements.
10. In other words to put the binding effect and the essentials of a family settlement in a concretised form, the matter may be reduced into the form of the following propositions:
(1) The family settlement must be a bona fide one so as to resolve family disputes and rival claims by a fair and equitable division or allotment of properties between the various members of the family;
(2) The said settlement must be voluntary and should not be induced by fraud, coercion or undue influence;
(3) The family arrangement may be even oral in which case no registration is necessary;
(4) It is well settled that registration would be necessary only if the terms of the family arrangement are reduced into writing. Here also, a distinction should be made between a document containing the terms and recitals of a family arrangement made under the document and a mere memorandum prepared after the family arrangement had already been made either for the purpose of the record or for information of the court for making necessary mutation. In such a case the memorandum itself does not create or extinguish any rights in immovable properties and therefore does not fall within the mischief of Section 17(2) of the Registration Act and is, therefore, not compulsorily registrable;
(5) The members who may be parties to the family arrangement must have some antecedent title, claim or interest even a possible claim in the property which is acknowledged by the parties to the settlement. 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 the courts will find no difficulty in giving assent to the same;
(6) Even if bona fide disputes, present or possible, which may not involve legal claims are settled by a bona fide family arrangement which is fair and equitable the family arrangement is final and binding on the parties to the settlement.

9. A perusal of the family settlement would show that the parties have agreed to the manner in which the properties and the businesses are to be divided. The said family settlement has been executed on 2nd August, 2021 in writing – though it is the case of the parties that the same was an oral partition, which was entered into earlier and has been, therefore, put into writing.
10. In terms of the decision in Nitin Jain v. Anuj Jain & Anr., AIR 2007 Del 219 if there is an oral partition which has been reduced into writing, even the technical formalities, stamping etc. would not be required to be undertaken. The relevant portion of the above stated judgement is extracted herein below:
8. The Courts have recognised that it is legally permissible to arrive at an oral family settlement dividing/partitioning the properties and thereafter record a memorandum in writing whereby the existing joint owners for the sake of prostriety record that the property has been already partitioned or divided. The memorandum does not by itself partition the properties but only records for information what has already been done by oral partition. The memorandum itself does not create or extinguish any rights. A record of oral partition in writing is created. The writing records a pre existing right and does not by itself partition the properties for the first time. As the memorandum only records oral partition which has already taken place but does not in praesenti create any right, it cannot be treated as an instrument creating partition. [Refer, Tek Bahadur Bhujil v. Debi Singh Bhujil reported in AIR 1966 SC 292), Bakhtawar Singh v. Gurdev Singh reported in (1996) 9 SCC 370, Kale v. Dy. Director of Consolidation reported in (1976) 3 SCC 119, Roshan Singh v. Zile Singh reported in AIR 1988 SC 881 and Bachan Singh v. Kartar Singh and others reported in 2001 (10) JT (SC) 64.]
9. In view of the legal position explained above, it follows that a decree of partition is an instrument of partition and therefore is required to be stamped under Schedule 1 of Article 45 r/w Section 2(15) of the Stamp Act. However, an oral family settlement dividing or partitioning the property is not required to be stamped. Similarly, a memorandum recording an oral family settlement which has already taken place is not an instrument dividing or agreeing to divide property and is therefore not required to be stamped.

11. Annexures 1 & 2 of the settlement clearly give the values of all the assets and the manner in which they have to be divided between the parties. In the opinion of this Court, there is, in fact, no lis between the parties.
12. Insofar as the amount of Rs.21 lakhs is concerned, the case of the Defendants is that there was some withdrawal by the Plaintiffs. However, this Court would not go behind the family settlement. The family settlement being an admitted document, if there are any excess payments, the same would be liable to be returned by the Defendants to the Plaintiffs and vice versa. All the documents required to give effect to the family settlement, be executed by the parties within four weeks from today.
13. The parties shall fully abide by the family settlement, which is placed on record along with Annexures 1 & 2. For the sake of clarity, the terms of the family settlement in paragraphs 1 to 13 are taken as full and final settlement between the parties along with the annexures.
14. The suit shall stand decreed in terms of the settlement between the parties. In view of the fact that certain documents have to be executed between the parties, let drafts be exchanged between the parties as also documentation that needs to be executed along with the amounts, that is to be paid by the Defendants to the Plaintiffs.
15. Upon the said drafts being exchanged, the parties shall appear before the Local Commissioner, for execution of all the documents. If the said documents require any registration before the Sub-Registrar, the same shall also be done by the parties in terms of the family settlement.
16. The interim order already granted shall continue for the period of three months to enable the parties to execute the relevant documents. If any further extension is required, any of the parties is permitted to approach this Court.
17. Mr. J.P. Singh, Advocate (M:8010004000), who is present in Court is appointed as the Local Commissioner in the matter. The Local Commissioner shall be paid a sum of Rs.1 lakh as fee, Rs.50,000/- to be equally shared by Plaintiffs and Defendants.
18. The suit is decreed in the above terms. Next date of hearing before the Joint Registrar stands cancelled. All pending applications are also disposed of.

PRATHIBA M. SINGH
JUDGE
FEBRUARY 14, 2024/dk/ks

CS(OS) 251/2022 Page 2 of 2