SUPREME COURT UPHOLDS FAMILY SETTLEMENT AGREEMENT IN PROPERTY DISPUTE.

CASE NAME: NASEEM KAHNAM AND OTHERS VERSUS ZAHEDA BEGUM (DEAD) BY LR. AND OTHERS.

CASE NUMBER: CIVIL APPEAL NO.1957 OF 2011.

DATED ON: JULY 09, 2024.

QUORUM: HON’BLE JUSTICE C. T. RAVIKUMAR & JUSTICE S.V.N. BHATTI.

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BRIEF? FACTS OF THE CASE:

The case involves a complicated controversy where the deceased Ghouse Khan died on February 18, 1988 and was not survived by any children or spouse. The applicant, Ghouse Khan was 43 years old at the time of his death and was the son of the late Abdul Rahman; the applicant further had a sister – Naseem Khanam, who is one of the plaintiffs. The post-death of the applicant, on the 7th of February, 1992, the family settlement deed was drawn to divide the residential immovable property situated in Visakhapatnam between the family members including the first respondent, Naseem Khanam and the second respondent, Gousia Jasmine.

Naseem Khanam and Gousia Jasmine, physically and mentally challenged sisters, sought the same under a family settlement scheme for the care of the elder sister. In response the defendants asserted that the agreement was legal, being the intention to share property in a non-violent manner in light of her needs. In the suit they prayed for separate possession and partition, although the defendant is the niece of Gousia Jasmine.

The defendants and others prayed that the family settlement was inadmissible and unenforceable and unregistered and stamp duty was not paid and the defendants are entitled to the properties as legal heirs of the deceased. Case moved to legal factors , the lower court discussed the parties’ purpose, the event of the family settlement and the legal irrelevance of the objections raised by the defendants.

The Trial Court therefore passed two decrees holding that the plaintiff had no right to any share in the property and further partitioning the plaint schedule into seven shares where the plaintiff has been awarded with one-seventh share of the suit property and the defendants two-sevenths share thereof. Hence, the Plaintiffs were in appeal to the High Court, through the impugned judgment, appeal was allowed and the high court passed a preliminary decree in terms of the agreement said to have been agreed between parties. Ultimately, the case went to the Supreme Court of India.

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LEGAL PROVISIONS:

●????? CONSTITUTION OF INDIA,1950

Article – 136: Special leave to appeal by the Supreme Court.?

●????? TRANSFER OF PROPERTY ACT, 1882.

Section – 129: Saving of donations mortis causa and Muhammadan Law.

●????? INDIAN STAMPS ACT, 1899

Section – 24:? How transfer in consideration of debt, or subject to future payment, etc., to be charged.

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ISSUES RAISED:

●????? Whether it is valid for the respondent to enforce the family settlement agreement dated February 7, 1992 although it was not registered and stamp duty was also not paid?

●????? Whether the defendants have a rightful claim over the property independent of the family settlement agreement ?

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CONTENTION OF APPELLANT:?

The counsel for the appellant i.e., Zaheda Begum and other relatives contested the legal enforceability of a family settlement agreement on the grounds that it was unregistered and stamp duty was not paid thereon. The appellants claimed that these shortcomings makes the document inadmissible in court and the issue of property partition should not be a consequence of them. They also asserted that they had a legal entitlement to the property and continued their appeal by requesting that the court should disregard such agreement.

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CONTENTION OF RESPONDENT:

The counsel for the respondent stated that a family settlement agreement is valid and was intended to protect Gousia Jasmine, who has mental health issues. The respondents pray to the courts to uphold the agreement in order to meet her needs, although she is a niece under the Mohammedan law. The counsel pointed out that their failure to register and pay stamp duty should not be a reason for the agreement’s invalidity as the primary goal was to maintain friendly relations between family members as well as the equitable division of the property. They also ask for partition and relocation based on the contract, stating that it was an effort to address Gousia Jasmine’s needs and her reliance on her sister.

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CORT’S ANALYSIS & JUDGEMENT:?

The Supreme Court of India recently gave a ruling regarding the family settlement agreement signed on February 7, 1992. The focus of the Court was on the family settlements and the legal provisions as applicable to the Mohammedan Law as well as the processes of concluding such agreements.

The Court started with the basic principles of a family arrangement, especially when it was underlined that any family arrangement must be in good faith and designed to address family disputes and conflicting claims as to the property. The justices also pointed out that the family settlement can reach both orally and in writing and even if registration is required for some deeds, it does not apply to all the family arrangements. The Court noted that a family settlement is based on agreement between the parties and thus cannot be made by fraud, force or coercion with one party being in an inferior position.

?The Court also observed the circumstances under which the agreement was entered into taking into consideration the family’s willingness to meet needs of Gousia Jasmine and to keep the family intact. The court also pointed out that non-registration and non-payment of stamp duty as being procedural matters but they should not blind the court to the actual intention of the parties.

?The Supreme Court ruled that the family settlement agreement was legal and should be honoured in order to maintain family harmony, especially when the family members who are the dependents have benefited from it.

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JUDGEMENT REVIEWED BY: ABHISHEK SINGH.

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