What is a Family Settlement according to the Courts in India?

 

Introduction

 

Today we will discuss another latest judicial pronouncement by the Hon’ble Supreme Court of India in the case of Khushi Ram and Others v. Nawal Singh and Others, 2021 SCC OnLine SC 128, wherein an interesting issue came up relating to the meaning and the nature of family settlement that could be entered into by the parties.

 

Earlier Judgments on Family Settlement

 

The Court started by citing Ram Charan Das v. Girjanandini Devi, (1965) 3 SCR 841, to explain the concept of family that could enter into a family settlement. According to the Court, “every party taking benefit under a family settlement must be related to one another in some way and have a possible claim to the property or a claim or even a semblance of a claim.” Further, it was observed that “all that is necessary is that the parties must be related to one another in some way and have a possible claim to the property or a claim or even a semblance of a claim on some other ground as, say, affection.”

 

Another case of Kale v. Deputy Director of Consolidation, (1976) 3 SCC 119, was cited by the Court to understanding the meaning of the term ‘family.’ The Court also explained the object of a family settlement. According to the Court: -

 

“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. Today when we are striving to build up an egalitarian society and are trying for a complete reconstruction of the society, to maintain and uphold the unity and homogeneity of the family which ultimately results in the unification of the society and, therefore, of the entire country, is the prime need of the hour. A family arrangement by which the property is equitably divided between the various contenders so as to achieve an equal distribution of wealth instead of concentrating the same in the hands of a few is undoubtedly a milestone in the administration of social justice. That is why the term “family” has to be understood in a wider sense so as to include within its fold not only close relations or legal heirs but even those persons who may have some sort of antecedent title, a semblance of a claim or even if they have a spes successionis so that future disputes are sealed for ever and the family instead of fighting claims inter se and wasting time, money and energy on such fruitless or futile litigation is able to devote its attention to more constructive work in the larger interest of the country. 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.”

Other Important Observations

 

The Court also gave a word of caution that family settlements are governed by principles that are not applicable to any dealings between the strangers and while considering a family settlement, the Court takes into account the interest of families and examines the arrangements/conditions that are exclusively conducive for family settlements.

 

The Court also cited Kale v. Deputy Director of Consolidation to lay down essentials of a family settlement in the following manner: -

 

1. 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;

2. The said settlement must be voluntary and should not be induced by fraud, coercion or undue influence;

3. The family arrangement may be even oral in which case no registration is necessary;

4. Registration would be necessary only if the terms of the family arrangement are reduced into writing;

5. 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;

6. A bona fide family arrangement which is fair and equitable is final and binding on the parties to the settlement.

 

In order to understand the rights of the legal heirs of a female in a family settlement, the Court perused Section 15 of the Hindu Succession Act, 1956 which is reproduced hereinbelow: -

 

“15. General rules of succession in the case of female Hindus.—(1) The property of a female Hindu dying intestate shall devolve according to the rules set out in section 16,—

(a) firstly, upon the sons and daughters (including the children of any pre-deceased son or daughter) and the husband;

(b) secondly, upon the heirs of the husband;

(c) thirdly, upon the mother and father;

(d) fourthly, upon the heirs of the father; and

(e) lastly, upon the heirs of the mother.”

 

Thus, even the heirs of the father are covered in the heirs, who could succeed. According to the Court, “when heirs of father of a female are included as person who can possibly succeed, it cannot be held that they are strangers and not the members of the family qua the female.”

 

This case involved another interesting question relating to registration of documents which will be discussed in the subsequent post.

 

Concluding Remarks

 

Civil Litigation is a complex field and the litigants as also the advocates, sometimes, take things for granted while dealing with the civil suits. Family arrangements or settlements are important tools that could help the parties settle their decades long disputes and bring peace. In this case, the Court traced the jurisprudence behind family settlements and used the same to understand whether the parties in the present case are related or not. In the next post, we shall discuss about the remaining aspects of this case.