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There are many many types
of transaction in property dealing and documents like Koorchit, 'Memorandum
Recording Earlier Oral Partition,' 'Memorandum Recording Family Arrangement,'
Baagappirivinai Kathu and so on.Large number of property transactions takes
place orally but we must see how valid are these transactions and are these
documents valid? Let us see what the law says.The division of property is known as partition.It is also the specific ascertainment of share held by the
co-owners.
A family arrangement, on
the other hand, is a settlement of issues or an arrangement on the basis of
claims that may arise regarding the property.Sometimes the claims may be unreal.However these claims must have a basis.The family arrangement include the
elements of a partition.The documents regarding the transactions are also not
stamped and registered. Whether such documents require to be stamped and registered is an important issue.
Ownership
transformed
Partition is a process
whereby the joint property is partitioned or divided for the individual
enjoyment of the property of the co-owners. It is only a specific determination
of each share.Each one of the sharers will have had a prior title.Partition
is not regarded as a new transfer therefore there is no conferment of a new
title.
For the purpose of family
arrangement it is important to understand the word family as the word 'Family'
will be interpreted depending on the nature of the document and the
transaction.For eg; Under the Indian Stamp Act, ‘Family’ for the purpose of
settlement includes father, mother, husband, wife, son, daughter and
grandchild. In the case of any one whose personal law permits adoption, 'father'
shall include an adoptive father, 'mother' an adoptive mother, 'son' an
adopted son, and 'daughter' an adopted daughter.
The same concept is
extended to transactions like 'Release' and 'Partition.'But the word family in
case of family arrangement has to be understood in a wider sense so as to
include not only close relations or legal heirs, but even those who may have
some sort of antecedent title, a semblance of a claim or a possible claim.The
reason behind for this is that it ensures that future disputes are settled
permanently.
In case of family
arrangement it is necessary that the parties must be related to one another and
have a claim or a possible claim or even a semblance of a claim to the
property. This ground could be something like "affection,"
"legal claims," "claims that have arisen," "claims
that could arise in future," etc. These claims need not have strict legal
backing or validity.
Family arrangement
In order to avoid future
disputes and to maintain peace and harmony if a such a situation arises, the
members of a family it necessary to make a family arrangement.The terms of the arrangement or partition are concluded orally by the parties in an oral
agreement. After that the parties may reduce this to a memorandum or execute,
stamp and register a document. Both types of documents are valid.The question
of stamping or registration does not arise as there is no document in case of
oral arrangement.
Stamping necessary
If any right, title or
interest is created,declared, assigned or extinguished by reason of family
arrangement or partition then it must be stamped and registered as per the
Indian Stamp Act and the Indian Registration Act.
In each case it is to be
determined it is a question of fact whether the terms have been documented by
the nature of phraseology and the circumstances in which and the purpose with
which it was written. However no stamp duty or registration is required in a
document like a memorandum, evidencing a family arrangement or a partition
which had already been entered into and had been prepared merely as a record,
in order to avoid false notions.
The document requires
stamping and registration if the transaction is a contemporous one but stamping
and registration may not be required if the transaction has already taken
place, and is merely recorded as a past transaction.If the family arrangement
or partition is stamped but not registered, it can be examined by courts for
collateral purposes.Whether the purpose is a collateral purpose, is a question
of fact depending on the facts and circumstances of each case.A right or title
to the property cannot be claimed by any person under the said document which
can be considered only for collateral purposes.
If the documents contains
such wordings as to the family arrangement or partition that it requires
stamping and registration, then a person cannot get a valid title under such a
document.It will not be accepted as evidence in Court.Mere usage of the past
tense will not, by itself, indicate a prior arrangement or transaction.The document has to be read as a whole. Therefore, the wordings in the document and
the facts and circumstances relating to the oral transactions are critical.
Therefore in order to
determine the validity of the document all the above factors have to be
considered. It is preferable verify the documents in the light of the above
position and take remedial measures wherever needed.
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