A family arrangement/settlement 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 Supreme Court has held the following to be the essentials of a Family Settlement:
- 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;
- The said settlement must be voluntary and should not be induced by fraud,coercion or undue influence;
- The family arrangements may be even oral in which case no registration is necessary;
- 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;
- 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;
- 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.
Meaning of the term “Family”:
To consider a settlement as a family arrangement, it is not necessary that the parties to the compromise should all belong to one family.
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 share in the property in dispute. If the dispute which is settled is one between near relations then the settlement of such a dispute can be
considered as a family arrangement.
Object of Family Settlement:
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.
Courts give effect to a family settlement upon the broad and general ground that its object is to settle existing or future disputes regarding property amongst members of a family. The word ‘family’ in the context 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 share in the property in dispute.
Rule of Estoppel:
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 Courts lean strongly in favour of family arrangements to bring about harmony in a
family and do justice to its various members and avoid in anticipation future disputes which might ruin them all.
If in the interest of the family properties or family peace the close relations had settled their disputes amicably, this Court will be reluctant to disturb the same. The Courts generally lean in favour of family arrangements.
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About the author:
Gaurav Sharma is the founder of Easy Kanoon & is a Legal Consultant with more than 10 years of experience.
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