Family Settlement Document Which Merely Records Past Transaction Does Not Require Compulsory Registration: Supreme Court

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Family Settlement Document Which Merely Records Past Transaction Does Not Require Compulsory Registration

Case: Korukonda Chalapathi Rao & Ors v Korukonda Annapurna Sampath Kumar

Coram: Justice KM Joseph and Justice SR Bhat

Case No: CIVIL APPEAL NO(S).6141 OF 2021

Court Observation: “If we apply the test as to whether the Khararunama in this case by itself ‘affects’, i.e., by itself creates, declares, limits or extinguishes rights in the immovable properties in question or whether it merely refers to what the appellants alleged were past transactions which have been entered into by the parties, then, going by the words used in the document, they indicate that the words are intended to refer to the arrangements allegedly which the parties made in the past. The document does not purport to by itself create, declare, assign, extinguish or limit right in properties. Thus, the Khararunama may not attract Section 49(1)(a) of the Registration Act,”

“The law is not that in every case where a party sets up the plea that the court may look into an unregistered document to show the nature of the possession that the court would agree to it. The cardinal principle would be whether by allowing the case of the party to consider an unregistered document it would result in the breach of the mandate of Section 49 of the Registration Act.”

“However, being let in evidence, being different from being used as evidence of the transaction is pertinent [See Muruga Mudallar (supra)]. Thus, the transaction or the past transactions cannot be proved by using the Khararunama as evidence of the transaction. That is, it is to be noted that, merely admitting the Khararunama containing the record of the alleged past transaction, is not to be, however, understood as meaning that if those past transactions require registration, then, the mere admission, in evidence of the Khararunama and the receipt would produce any legal effect on the immovable properties in question,”

“As far as stamp duty goes, on our finding regarding the nature of the document, viz., Khararunama, being record of the alleged transactions, it may not require to be stamped”

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Family Settlement Document, Past Transaction, Compulsory Registration