While dealing with properties, you may come across many types of transactions, and encounter documents like Koorchit, 'Memorandum Recording Earlier Oral Partition,' 'Memorandum Recording Family Arrangement,' Baagappirivinai Kathu and so on.
You will find that large properties have been transacted orally. Such transactions could have taken place in the case of properties owned by you or properties which you intend to purchase. How valid are these transactions? Are these documents valid? Let us see what the law says.
A partition means division of a property. It can also be a specific determination of shares held by 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.
At times, this claim can be notional. However, the claims must have a basis. The family arrangement may combine the elements of a partition.
You will find that the documents are not usually stamped and registered. Whether such documents require be stamping and registering is an important issue.
OWNERSHIP TRANSFORMED
Partition is a process by which joint ownership is transformed into enjoyment in severalty. Each one of the sharers will have had a prior title. In other words, all the owners are already owners of the share concerned.
The process is determination of the specific share or identification of his or her share by metes and bounds. Therefore, this is not regarded as a conveyance and there is no conferment of a new title.
One also has to understand as to what is meant by a 'Family' for the purposes of a family arrangement. This is vital as the word 'Family' will be interpreted depending on the nature of the document and the transaction.
For example, the word 'Family' for the purposes of a settlement under the Indian Stamp Act, will mean, 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’. However, in the case of a family arrangement, the word 'Family' 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 for this is that it ensures that future disputes are settled permanently.
The members of a family, instead of fighting amongst themselves, and thereby wasting time, money and energy on fruitless litigations, can devote their attention to things more constructive.
In this background, we have to understand as to when the family arrangement can be effected. It is now well settled that all that is necessary is that the parties must be related to one another and has 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
If such a situation arises and members of the family feel that in order to maintain peace or to bring about harmony or to avoid future disputes, it is necessary, a family arrangement can be made.
In an oral arrangement, the parties conclude the terms of the arrangement or partition orally. The parties also implement the arrangement by taking possession of their respective shares.
The parties may subsequently reduce this to a memorandum or execute, stamp and register a document. Both types of documents are valid.
The legal position as far as these transactions are concerned is as follows.
A partition or a family arrangement can be made orally. If made orally and there being no document, the question of stamping or registration does not arise.
STAMPING NECESSARY
However, if the family arrangement or partition is reduced to writing and it purports to create, declare, assign, limit or extinguish any right, title or interest of any immovable property, it must be stamped and registered as per the Indian Stamp Act and the Indian Registration Act.
Whether the terms have been documented is a question of fact in each case to be determined by the nature of phraseology and the circumstances in which and the purpose with which it was written. However, 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 that there are no hazy notions in future, need not be stamped or registered
If the division takes place under the terms of the document, then the same requires be stamping and registering. In other words, if the transaction is contemporaneous, the document would require stamping and registration. If the transaction has already taken place, and is merely recorded as a past transaction, then stamping and registration may not be required.
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 person cannot claim a right or title to a property under the said document, which can be considered only for collateral purposes.
If the wordings are such that the family arrangement or partition 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 crucial.
All these factors will have to be considered in determining whether the document is valid or not. It would be better to check the documents in the light of the above position and take remedial actions wherever needed.
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