TMI Blog2016 (4) TMI 1332X X X X Extracts X X X X X X X X Extracts X X X X ..... enter into a settlement? - Held that:- This Court does not see any condition, or barrier in the form a necessity to involve all members of a family. If the disputes are inter se as between two members, there is no bar to the designation of their settlement as a family arrangement or settlement. It has the objective of orderliness in the title of each member of the family and crucially, ensures peace and harmony amongst all of them. If the law is that those not considered family members can enter into binding family arrangements, it cannot be that all members of a family have to be party to a settlement as a precondition for its binding nature. This argument is, accordingly rejected. The impugned judgment, inasmuch as it dismisses Satyapal's suit, is set aside. - RFA (OS) 76/2013, C.M. APPL.10644/2013, RFA (OS) 77/2013, C.M. APPL.10649/2013, FAO(OS) 327/2013 - - - Dated:- 29-4-2016 - Mr. S. Ravindra Bhat And Ms. Deepa Sharma, JJ. Sh. Sanjeev Sindhwani, Sr. Advocate with Sh. Anupam Srivastava, Sh. Anil Kumar Chandel and Sh. Sharmistha Ghosh, Advocates For The Appellant. Sh. Jayant Bhushan, Sr. Advocate with Sh. Atul Sharma and Sh. Nitin Jain, Advocates Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds plot of land being B-316, New Friends Colony [hereafter referred to as the NFC property ] through a registered deed dated 04.12.1979. He built a house on the NFC property. Satyapal alleges that even for the acquisition of NFC property, Sudhir borrowed money from Satyapal HUF. 4. In the declaration suit, Satyapal alleged that since he and Sudhir were brothers, they both agreed that the entire Suit property, including Sudhir's half share would vest in Satyapal HUF and ` 2 lakhs paid by Satyapal for acquiring the half share would be set-off by relinquishing his title in the said property. Satyapal avers that the suit property always belonged to him and that Sudhir never had any interest in the property, having never lived there nor having invested any money in it. In the declaration suit, it was contended by Satyapal that their parents always lived with him and not with Sudhir till their deaths. 5. The suit further avers that: .......the defendant verbally released his half portion in the property in favor of plaintiff in 70s itself when he acquired his own house with a promise to execute the release/relinquishment deed in favor of the plaintiff soon.... 6. The d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso alludes to the fact that in 1995, the parties had agreed that Sudhir would execute the release deed for which a draft was prepared and handed over to Sh. Vinod Kumar Bindal, the consultant to both the parties. However, it could not be signed by Sudhir and thereafter in the course of a raid conducted on the premises of the said consultant, all materials, i.e. the documents were taken into custody. 9. On the basis of these averments and materials, it was asserted that Satyapal was the real owner of the suit property; that the parties intended this to be so through their arrangements, which is further evidenced by materials on record. The declaration that Satyapal was the absolute owner of the property and a consequential perpetual injunction restraining Sudhir from seeking to interfere with Satyapal's peaceful possession of the property was sought. In support of these claims, Satyapal relied upon several documents, including two sale deeds, copy of the unsigned release deed, copies of Sudhir's balance sheets as on 31.03.1991 to 31.03.1996, 31.03.2000 to 31.03.2001 and as on 31.03.2007 to 31.03.2009, copies of bills, receipts etc., disclosing the property tax so paid by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. In the impugned judgment, before the learned Single Judge, it was contended by Satyapal that there was a family arrangement between Satyapal and Sudhir whereby the former was to be owner of the suit property. The judgment of the Supreme Court in Kale and Ors. v. Deputy Director of Consolidation 1976 (3) SCC 199 was relied upon. This contention was denied by Sudhir who urged that no such arrangement was executed and that the only manner through which title could be conferred appropriately was a registered deed or release deed. Since none existed and that even according to the averments in the suit, only a draft release deed had been prepared which was not signed by Sudhir, he continued to be the owner. Sudhir relied upon the provisions of Benami Act, especially Sections 3 and 4 and submitted that the suit contained averments which asserted that the property was purchased by Satyapal in the name of Sudhir. Therefore, the claim was essentially for enforcement of a benami right which by virtue of the Act was unforceable. Besides, Sudhir argued that Satyapal's suit was time-barred and that the relief too for a declaration is contrary to the Benami Act. 13. In the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... absence thereof, SPG cannot be said to have become owner and SKG cannot be said to have ceased to be the owner of the said upper floors of the property. It may be highlighted that SPG has not sued for specific performance of the agreement if any by SKG to transfer the said upper floors to SPG. CS(OS) No.1399/2011 of SPG is premised on SKG having ceased to be the owner and SPG having become the owner pursuant to the agreement between the parties of the year 1991- 1992. Being fully aware that the said transfer is not in accordance with law, the doctrine of Family Settlement qua which it has been held that technicalities cannot be allowed to come in the way, is sought to be invoked. 17. However, for there to be a Family Settlement/arrangement, it has to be first established that there was a family and bona fide disputes in that family and the settlement was to resolve the said family disputes and rival claims by a fair and equitable division or allotment of properties between the various members of the family. It is this essential ingredient, that the claim of SPG is lacking. SPG himself has pleaded that he and his family and SKG and SKG's family have never resided together. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011 is accordingly partly allowed and the plaint of SPG qua relief para (b) is rejected. The plaint qua the other reliefs is also rejected for the reason of not disclosing a cause of action and SPG being not entitled to the relief of declaration as owner on the basis of release as per balance sheet. 28. That brings to the effect thereof on CS(OS) No.1480/2011. The defence of SPG to CS(OS) No.1480/2011 for possession is the same which has already been rejected. It has to thus necessarily follow that the claim of SKG in CS(OS) No.1480/2011 in so far as for the relief of possession, has to be decreed immediately. 17. Sh. Jayant Bhushan, learned senior counsel argues - in support of the two appeals by Satyapal that the learned Single Judge read the plaint in a very technical and narrow manner without considering the overall impact of the pleadings. It was urged that a bare reading of the plaint reveals that Satyapal's basic case before the learned Single Judge was that the premises which comprised the first and second floors of the suit property purchased by him although the owner was shown to be Sudhir in the special circumstances. Learned senior counsel emphasized that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed on the release deed but also on the plea of adverse possession since concededly his occupation and possession of the suit property from 1975 was uninterrupted, peaceful, continuous and unchallenged. It was highlighted that a family settlement need not be entered into by all members but by those who have anticipated disputes between each other. This is a crucial aspect which was ignored by the learned Single Judge. 19. It was urged that the learned Single Judge further fell into error in rejecting the plaint in part - a course of action which is impermissible in law. Learned counsel relied upon various rulings of the Supreme Court and submitted that once it is held that the suit is maintainable, it is not open to the Court to reject it in part and uphold in respect of others. 20. Learned counsel lastly urged that the Court facially erred in decreeing the suit for possession, having held that the relief in prayer (b) was not maintainable and allowing the application under Order VII Rule 11 CPC to that extent the decree for possession could not have followed as a matter of course. Learned senior counsel secondly urged that in the suit for possession, Satyapal could not be tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the entire suit property which was the subject matter of the suit. Learned senior counsel relied upon the decision reported as Kuppuswami v. Arumugam AIR 1967 SC 1395; Popat and Kotecha Property v. SBI Staff Association 2005 (7) SCC 510; Abdul Rahim Ors v Sk. Abdul Zabar Ors 2009 (6) SCC 160 and Board of Trustees of Port of Kandla v. Hargovind Jasraj and Anr. 2013 (1) SCR 589. He further submitted that the learned Single Judge fell into error by holding that the suit was filed within the time of limitation. It was argued that the declaration suit clearly stated that the cause of action occured in 1992. However, it was filed in 2011. Learned counsel submitted that in terms of Article 58 of the Schedule to the Limitation Act, the three year limitation period is to be reckoned from the date from which the cause of action arose. Even on a plain reading of the suit, the cause of action arose in 1992. It was clearly barred when it was filed in 2011. It was urged that the interpretation placed on Article 58, i.e. that the pleadings were unclear and that the plaintiff/Sudhir had to be given a chance to establish that the real cause of action arose in 2011 or within three years of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rammatical sense. The intention of the party concerned is to be gathered primarily from the tenor and terms of his pleadings taken as a whole. At the same time it should be borne in mind that no pedantic approach should be adopted to defeat justice on hair- splitting technicalities. 19. Keeping in view the aforesaid principles the reliefs sought for in the suit as quoted supra have to be considered. The real object of Order 7 Rule 11 of the Code is to keep out of Courts irresponsible law suits. Therefore, the Order 7 of the Code is a tool in the hands of the Courts by resorting to which and by searching examination of the party in case the Court is prima facie of the view that the suit is an abuse of the process of the Court in the sense that it is a bogus and irresponsible litigation, the jurisdiction under Order 7 Rule 11 of the Code can be exercised. The above rule was overlooked by the learned Single Judge, who straightaway proceeded to reject a part of the plaint, on the basis that one of the reliefs was not maintainable. The law declared by the Supreme Court, clearly enjoins civil courts from rejecting part of the claim. 26. Quite apart from the procedural improprie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties possess. But a document which is no more than a memorandum of what had been agreed to between the parties does not require compulsory registration under Section 17, Registration Act All these principles were elaborated in Kale (supra), where the Court condensed them in the following terms: 9.... 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... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned Single Judge fell into error in not following Kale (supra). 28. The question then is, whether, for a valid settlement, to avoid future disputes, it is a precondition that all members of a family have to enter into a settlement. This Court does not see any condition, or barrier in the form a necessity to involve all members of a family. If the disputes are inter se as between two members, there is no bar to the designation of their settlement as a family arrangement or settlement. It has the objective of orderliness in the title of each member of the family and crucially, ensures peace and harmony amongst all of them. In S. Shanmugam Pillai v K. Shanmugam Pillai AIR 1972 SC 2069, the Supreme court pertinently held as follows: To consider a settlement as a family arrangement, it is not necessary that the parties to the compromise should all belong to one family. As observed by this Court in Ram Charan Das v Girijanandini Devi Ors [1965] 3, S.C.R. 841, the word family in the context of a family arrangement is not to 'be understood in a narrow sense of being a group of persons who are recognised in law as having a right of succession or having a claim to a shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned Single Judge straightaway decreed, perhaps under the erroneous premise that Satyapal could have no valid defence, because his declaration suit failed. As was noticed earlier, the declaration suit was not rejected in totality, but only in part. Therefore, it was conceivable for Satyapal to at least claim that he is entitled to certain ownership rights, because even according to the singe judge, a part of the cause of action and claim in the suit, could be proceeded with. In the circumstances, the possession decree could not have been drawn, because the surviving cause of action in declaration suit also was part of the defense in the possession suit. The defendant, Satyapal's appeal has to therefore, succeed and the decree for possession needs to be set aside. 32. As to Sudhir's appeal, directed against the rejection, by the learned Single Judge of the submission that the declaration suit was time barred. Sudhir's argument is that by virtue of Article 58 of the Schedule to the Limitation Act, the three year period for institution of a declaratory suit commences from the date the cause of action first arises and that since Satyapal's plaint states that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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