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PETITIONER: BHOOP SINGH

       Vs.

RESPONDENT: RAM SINGH MAJOR & ORS.

DATE OF JUDGMENT11/09/1995

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. HANSARIA B.L. (J)

CITATION:  1996 AIR  196            1995 SCC  (5) 709  JT 1995 (6)   534        1995 SCALE  (5)228

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T HANSARIA. J.      The petitioner is one of the defendants in the suit out of which  the present  special leave  petition  arises.  The plaintiffs are heirs of one Nand Ram, who is one of the five sons of one Jeevan Ram. The petitioner belongs to the branch of Rakha Ram, another son of Jeevan Ram. Ganpat was a son of Nanha Ram, still another son of Jeevan Ram. 2.   The petitioner filed, at one point of time, Suit No.215 of 1973 which came to be disposed of on 6.4.1973 as below :      "It is ordered that a declaratory decree      in respect of the property in suit fully      detailed in the heading of the plaint to      the effect  that the  plaintiff will  be      the owners  in possession  from today in      lieu of  the defendant  after his  death      and the  plaintiff deserves  his name to      be incorporated  as such  in the revenue      papers, is  granted  in  favour  of  the      plaintiff against the defendant, in view      of the  written statement  filed by  the      defendant admitting  the  claim  of  the      plaintiff to  be correct.  Pleader’s fee      fixed Rs.16/-.  It  is  further  ordered      that there is no order as to costs."                          (Emphasis supplied) Thereafter nothing  much happened, till the present suit was filed claiming  one-third share in the suit land as heirs of Jeevan Ram.  The petitioner  contended that  in view  of the aforesaid order  passed in  Suit No.215 of 1973, the dispute does  not  survive  and  he  alone  is  entitled  to  be  in possession of  the suit  land. The trial court held that the aforesaid decree  was against  law and  facts. The appeal of the petitioner  was dismissed by the District Judge; so too, the second  appeal by  a learned  Single Judge  of the  High

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Court, whose judgment has been impugned in this petition. 3.   A perusal  of the  impugned judgment  shows that  among other reasons  to decide  the present proceeding against the petitioner, one  was that  the aforesaid  decree not  having been registered, the same could not have conferred any right on the  petitioner. It  is this  view of  the learned  Judge which has been principally assailed in this petition. 4.   Shri  Sehgal   appearing   for   the   petitioner   has strenuously contended that the aforesaid view is not tenable in law inasmuch as, according to learned counsel, the decree is not  required to  be registered  in view of what has been stated in  clause (vi)  of sub-section  (2) of section 17 of the Registration  Act, 1908.  The learned  Judge of the High Court did not agree to this contention because, according to him, the  decree has  to be treated "to create a gift" which would take  the case  out of  the purview  of the  aforesaid clause, because that is to apply only to clauses (b) and (c) of sub-section  (1), whereas  the present case would attract clause (a) of sub-section (1). Shri Sehgal contends that the view taken  by learned  Judge was  not correct  in  law  as, according  to   him,  the  present  is  really  not  a  case attracting clause  (a) of  sub-section (1),  but the case of the petitioner  falls within  clause (b),  which would  make clause (vi) of sub-section (2) operative. 5.   In support  of his  submission, the learned counsel has referred us to number of decisions starting from that of the Privy Council  in  Rani  Hemanta  Kumari  Debi  v.  Midnapur Zamindari Co.  Ltd., 1919  I.A. 240,  whose ratio was relied upon by  this Court  in Mangan Lal Deoshi v. Mohammad Moinul Haque, 1950 SCR 833. In these two cases it was held that the decree  in  question  was  not  required  to  be  registered because, in  the first  case, the compromise was accepted to be "an  agreement to  lease", whereas in the second case the facts disclosed  that the  agreement was contingent, and so, no lease  came into  existence. It was, therefore, held that the cases did not come within the fold of clause (d) of sub- section (1) of section 17, and so, the court’s order was not required to  be registered.  These  cases  are  thus  of  no assistance to the petitioner. 6.   Shri Sehgal has then referred us to Bishundeo Narain v. Seoqeni Rai  & Jagernath,  1951 SCR 548, and Shanker Sitaram Sontakke v.  Balkrishna Sitaram Sontakke, 1955 (1) SCR 99. A perusal of  these judgments  show that they are not relevant having dealt with some other questions of law. 7.   Among the  decisions of  the High Court to be relied on by Shri  Sehgal, the  first is  one rendered  in the case of Fazal Rasul  Khan v.  Mohd-ul-Nisa, AIR 1944 Lahore 394. The question for determination in that case was whether disposal of a  suit by  stating  "Suit  compromised  and  accordingly dismissed", could  be  said  to  embody  the  terms  of  the compromise. The  Bench opined  that it  would not unless the terms of  the compromise  are in  some way  embodied in  the decree or  the order,  which would  be so  where a  suit  is disposed of  by saying  "Suit decreed  in the  terms of  the compromise or  suit dismissed  in terms  of the compromise". This decision is thus on a different point. 8.   Coming to  the post-Independent decisions, the first to be pressed  into service  is that of High Court of Assam and Nagaland in  Sudhir Chandra  Guha v. Jogesh Chandra Das, AIR 1970 A  & N  102.  This  decision  does  support  the  legal submission advanced  by Shri  Sehgal inasmuch as it has been held that  the compromise  decree in  an earlier  suit being relatable to  immovable property which was subject matter of the suit,  section 17  (2) (vi)  of the Registration Act did exempt the decree from registration. It was, therefore, held

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that the  compromise decree  in question was not required to be registered for conferring title in respect of property in the decree  as per  its terms. AIR 1982 Calcutta 222 (Surjya Kumar Das  v.  Sm.  Maya  Dutta)  also  sustains  the  legal proposition advanced  by the  learned counsel  to the extent that a  compromise decree  confined to the subject matter of suit does  not require  registration to  confer title by its force. 9.   The point  in C.  Muthuvel Pillai v. Hazarath Syed Shah Mian, AIR  1974 Madras 199, was relatable to the question as to what  is the purport to the expression "subject matter of the suit  or proceeding"  finding place in clause (vi). This decision is thus is on a point not relevant for our purpose. 10.  The decision  of the  Lucknow  Bench  in  Luxmi  Narain Kapoor v.  Radhey Mohan  Kapoor, AIR  1986 Allahabad 244, is also on  different point  as the  bench was  called upon  to decide whether  the compromise incorporating the terms of an earlier settlement and the decree based on it required to be registered. It  was held  after referring  to  some  earlier decisions that a compromise representing a family settlement was in  law not a transfer of property. It was also observed that compromise  did not create any right or title in favour of the  parties  of  its  own  force,  but  it  operated  to recognise pre-existing right. This decision would, in a way, go against the proposition advanced by Shri Sehgal, because, if what  is stated  therein be  the correct position in law, then a  compromise decree  creating a right by its own force would require registration. 11.  The sheet anchor of Shri Sehgal’s submission is a Bench decision of the Punjab and Haryana High Court in Gurdev Kaur v. Mehar  Singh, 1989  PLJ 182.  Reference to  that decision shows that  the Bench  opined that the view taken by learned Single Judges  of High  Court in  some earlier  cases that a decree  based   on  compromise   conferring  title  required registration, even  though it  related to  the  property  in suit, was  not correct.  One such  view had  been  taken  in Ranbir Singh  v. Shri  Chand, 1984 PLJ 562, on the reasoning that a compromise is basically a contract and decree founded on it,  if the  same created right for the first time, would be treated  as an  instrument of  gift and  so would require registration. The  Bench, however,  held that  a  compromise decree creating  right even  for the  first time  would  not require registration.  This decision is thus rightly pressed into service  by Shri  Sehgal. Its  perusal, however,  shows that it  distinguished the  case of Sumintabai Ramkrishna v. Rakhmabai Ramkrishna  Jadhav, AIR  1981 Bom.  52, because in that case  the compromise  itself was  not regarded  as bona fide by  the court,  as it  was described as sham compromise brought about  for the purposes of practising fraud upon the law relating to stamp duty and registration. 12.  The aforesaid  decisions do not cover the whole ground, according to  us. They  meet our approval as for as they go. But something  more is  required to  be said to find out the real purport of clause (vi). It needs to be stated that sub- section (1)  of section  17  mandates  that  the  instrument enumerated  in  clauses  (a)  to  (e)  shall  be  registered compulsorily  if  the  property  to  which  they  relate  is immovable property  value of  which is  Rs.100/- or upwards. When the  document purports  or operates to create, declare, assign, limit  or  extinguish,  whether  in  present  or  in future, any right, title or interest therein, whether vested or contingent, it has to be registered compulsorily. The Act does not  define "instrument".  Section 2(14)  of the Indian Stamp Act,  1899,  defines  "instrument"  to  include  every document by  which any right or liability is, or purports to

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be, created, transferred, limited, extended, extinguished or recorded. Sub-section  (2) of section 17 of the Act engrafts exceptions to  the instruments  covered only  by clauses (b) and (c)  of sub-section  (1). We  are concerned  with clause (vi) of  sub-section (2).  Clause (vi) relates to any decree or order  of a  court, except a decree or order expressed to be made  on a  compromise and  comprising immovable property other than  that which  is the subject matter of the suit or proceeding. Clause  (v) is  relevant which in contrast reads thus:  "any   document  not   itself  creating,   declaring, assigning, limiting  or extinguishing  any right,  title  or interest of  the value  of one hundred rupees and upwards to or in  immovable property,  but merely  creating a  right to obtain another instrument which will, when executed, create, declare, assign,  limit or  extinguish any such right, title or interest;". The Explanation amplifies that a contract for the sale  of immovable  property  containing  a  recital  of payment of  any earnest money or of the whole or any part of the purchase  price shall  not be  deemed to  be required or ever to have required registration. 13.  In other  words,  the  court  must  enquire  whether  a document has recorded unqualified and unconditional words of present demise  of right, title and interest in the property and included  the  essential  terms  of  the  same;  if  the document, including  a  compromise  memo,  extinguishes  the rights of  one and  seeks to confer right, title or interest in praesenti  in favour  of the other, relating to immovable property of  the value of Rs.100/- and upwards, the document or  record   or  compromise   memo  shall   be  compulsorily registered. 14.  In Tek  Bahadur v.  Debi Singh & Ors., AIR 1966 SC 292, the Constitution Bench of this Court considered the validity of the  family arrangement  and the  question was whether it requires to  be compulsorily  registered under  section  17. This Court,  while upholding  oral family  arrangement, held that registration  would be  necessary only  if the terms of the  family   arrangements  are   reduced  into  writing.  A distinction should  be made  between the document containing the terms  and recital  of family arrangement made under the document and  a mere  memorandum prepared  after the  family arrangement had  already been made either for the purpose of 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.  It was  held that a memorandum of family arrangement made earlier which was filed in the court for its  information was  held not  compulsorily registrable and therefore  it can  be used  in evidence  for  collateral purpose, namely,  for the  proof of family arrangement which was  final   and  binds  the  parties.  The  same  view  was reiterated in  Maturi Pullaiah & Anr. v. Maturi Narasimham & Ors., AIR  1966 SC 1836, wherein it was held that the family arrangement will  need registration  only if  it creates any interest in  immovable property in present time in favour of the  parties  mentioned  therein.  In  case  where  no  such interest is  created the  document will be valid, despite it being non-registered  and will  not be  hit by section 17 of the Act. 15.  In Ratan  Lal Sharma  v. Purshottam Harit, 1974 (3) SCR 109, this  Court held  that the  award had expressly made an exclusive allotment  of partnership  assets,  including  the factory and  liabilities to  the  appellant,  and  made  him absolutely entitled  to  the  same,  thereby  purporting  to create rights  in immovable property worth above Rs.100/- in

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favour of  the appellant.  It was,  therefore, held  that it required registration  under section  17 of  the Act. It was also pointed  that it  is equally settled law that the share of a  partner in  the assets  of the  partnership which  has immovable property  is  a  movable  property  and  that  the assignment of  the share does not require registration under section 17.  Take the familiar cases of a decree in suit for specific performance  of a  contract. Though  a contract  of sale is  not compulsorily  registrable as it does not create title or  right in  immovable property;  but on a decree for specific  performance   made  by  the  court,  the  document executed in furtherance thereof requires registration though it has the imprint of the decree of the court. 16.  We have  to view  the reach of clause (vi), which is an exception to  sub-section (1),  bearing all the aforesaid in mind. We  would think  that the exception engrafted is meant to cover that decree or order of a court, including a decree or order  expressed  to  be  made  on  a  compromise,  which declares the  pre-existing right  and  does  not  by  itself create  new   right,  title  or  interest  in  praesenti  in immovable property  of the value of Rs.100/- or upwards. Any other  view   would  find   the  mischief  of  avoidance  of registration, which requires payment of stamp duty, embedded in the decree or order. 17.  It would,  therefore, be  the  duty  of  the  court  to examine in  each case  whether the parties have pre-existing right to  the immovable property, or whether under the order or decree  of the  court one  party having  right, title  or interest therein  agreed or  suffered to extinguish the same and  created  right,  title  or  interest  in  preasenti  in immovable property  of the  value of  Rs.100/- or upwards in favour  of  other  party  for  the  first  time,  either  by compromise or  presented consent. If latter be the position, the document is compulsorily registerable. 18.  The legal position qua clause (vi) can, on the basis of the aforesaid discussion, be summarised as below : (1)  Compromise decree  if bona  fide, in the sense that the compromise is  not a device to obviate payment of stamp duty and frustrate  the law  relating to  registration, would not require registration.  In a  converse  situation,  it  would require registration. (2)  If the  compromise decree  were to create for the first time right,  title or  interest in immovable property of the value of  Rs.100/- or  upwards in favour of any party to the suit, the decree or order would require registration. (3)  If the decree were not to attract any of the clauses of sub-section (1)  of section  17, as  was the position in the aforesaid Privy  Council  and  this  Court’s  cases,  it  is apparent that the decree would not require registration. (4)  If  the   decree  were  not  to  embody  the  terms  of compromise, as was the position in Lahore case, benefit from the terms  of compromise  cannot be  derived, even if a suit were  to  be  disposed  of  because  of  the  compromise  in question. (5)  If the  property dealt  with by  the decree  be not the "subject matter  of the  suit or proceeding", clause (vi) of sub-section (2)  would not operate, because of the amendment of this  clause by  Act 21  of 1929, which has its origin in the aforesaid  decision of  the Privy  Council, according to which the original clause would have been attracted, even if it were to encompass property not litigated. 19.  Now, let  us see  whether on the strength of the decree passed in  Suit No.215 of 1973, the petitioner could sustain his case  as put  up in his written statement in the present suit,  despite   the  decree  not  having  been  registered.

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According to  us, it cannot for two reasons : (1) The decree having purported  to create  right or title in the plaintiff for the  first time  that is not being a declaration of pre- existing right,  did require  registration. It  may also  be pointed out  that the  first suit  cannot really  be said to have been  decreed on  the basis  of compromise, as the suit was decreed  "in view  of the written statement filed by the defendant  admitting  the  claim  of  the  plaintiff  to  be correct". Decreeing  of suit  in such a situation is covered by Order  12 Rule 6, and not by Order 23 Rule 3, which deals with compromise  of suit,  whereas  the  former  is  on  the subject of  judgment on  admissions. (2)  A perusal  of  the impugned judgment  shows that the first appellate court held the decree  in question as "collusive" as it was with a view to defeat  the right  of others who had bona fide claim over the property of Ganpat. Learned Judge of the High Court also took the same view. 20.  The result  is that  the  impugned  judgment  does  not suffer  from  any  legal  infirmity  and  the  petition  is, therefore, dismissed.