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Sita Ram Bhama v. Ramvatar Bhama

Civil Appeal · 2018 INSC 260Decided 23 Mar 2018
Civil Appeal arising out of SLP (Civil) No. 11067 of 2017
Justice A.K. Sikri · Justice Ashok Bhushan

Background

Two brothers disputed ownership of a house and shop that their late father was said to have divided between them in 1992, which the brothers and their mother and sisters later recorded in a 1994 "memorandum of settlement." When the appellant (plaintiff) sued for partition and later for possession, the trial court and Rajasthan High Court held that this 1994 document was in substance a family settlement, not a mere memorandum, and since it was unregistered and inadequately stamped, it could not be admitted as evidence to prove the partition.

Decision Breakdown

The Supreme Court agreed that the 1994 document was a genuine family settlement (not just a record of an earlier arrangement), because at the time of the claimed 1992 division the father was still alive and the sole owner, and the 1994 document itself divided the property and involved the mother and sisters relinquishing their inheritance shares, making it compulsorily registrable under the Registration Act. However, applying its earlier ruling in Yellapu Uma Maheswari, the Court held that even though the document could not be used to prove the partition itself, it could still be admitted in evidence for a "collateral purpose" (such as showing possession or severance of title) provided the appellant paid the applicable stamp duty and penalty and had the document impounded. The appeal was partly allowed on this basis.

Lesson Learnt

A family settlement that actually divides property and takes away other family members' inheritance shares must be registered and properly stamped to be used as direct proof of that division, but even an unregistered or unstamped document isn't necessarily worthless, as it can still be used for limited collateral purposes once the required stamp duty and penalty are paid.

Official source (sci.gov.in)View Judgment (PDF)

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