Memorandum of Partition – Requirement of Registration

In the matter of Popatlal Devaram vs CIT (1970) 77 ITR 1013, the Hon’ble Orissa High Court has HELD :

The sole question on which this court, is to express its opinion is whether the memorandum dated May 1, 1957, is compulsorily registrable. Law is well settled that a partition of the joint family properties can be effected by an oral agreement irrespective of the value of the property. It is not being disputed that joint family properties were partitioned as enumerated in the memorandum by an oral agreement on April 1, 1957. The partition was legal and valid. The memorandum executed on May 1, 1957, merely recorded the factum of partition which had already taken place on April 1, 1957. But itself it does not create any new jural relationship amongst the parties. The disruption of the joint family with partition by metes and bounds in respect of properties covered by the memorandum took place on April 1, 1957. Since then, the joint ownership was converted into individual ownership and the memorandum is merely evidence of that fact.

The Hon’ble Supreme Court of India observations in the case of Tek Bahadur V/s. Debi Singh, AIR (1966) SC 292 also indicate that “Such Family Arrangements can be arrived at orally. Its terms may be recorded in writing as memorandum of what had been agreed upon. The memorandum need not be prepared for the purpose of being used as a document on which future title of parties is to be founded. It is generally prepared as a record of what had been agreed upon in order that there are no hazy notions about it in future. It is only when the family arrangement is reduced to writing with the purpose of using that writing as proof of what they had arranged and where the arrangement is brought about by the document as such, that the document requires registration, because it is then that it would amount to document of title declaring for future what rights and in what properties the parties possess. But a document which is no more than a memorandum of what had been agreed to between the parties does not require compulsory registration under Section 17, Registration Act.”

The nature of Family Settlement and the allied questions whether such settlements amount to “Transfer” for purposes of Capital Gains or Registration have been dealt with by several decisions of the Supreme Court & also by various High Courts which explain what is family settlement and why it does not amount to “transfer” and why the memorandum of family settlement does not require registration. A few of them are listed as follows:-

(1) CGT v/s. D. Nagrirathinam – (2003) 129 Taxman 822 (Mad)

(2) CIT v/s. AL. Ramanathan – (2000) 245 ITR 494, (2003) 128 Taxman 87 (Mad)

(3) Lakshmi Ammal v/s. Chakravahthi – AIR 1999 SC 3363

(4) C G T v/s. S.N Zaman and S.M Elahi – (1996) 221 ITR 842/ (1997) 91 Taxman 177 (Gauhati)

(5) S.K Sattar S.K Mohd Choudhari v/s. Gundappa Amabadas Bukte – (1996) 6 SCC 373

(6) Bakhtawar Singh v/s. Gurdev Singh & Anr. – (1996) 9 SCC 370

(7) Taraknath and Anr. v/s. Sushil Chandra Dey by Lrs. & Ors. – (1996) 4 SCC 697

(8) A.L Ramanathan v/s. ITO -(1990) 37 ITR 55 (Mad)

(9) Roshan Singh v/s. Zile Singh – AIR(1988)SC 881

(10) H H Maharani Manekaraje Pawar v/s. ITO (1986) 15 ITD 545 (Indore)

(11) Kale v/s. Dy. Director of Consolidation- AIR 1976 SC 807.

(12) Ziauddin Ahmed v/s. CGT- (1976) 102 ITR 253 (Gauhati)

(13) Shambhu Prasad Singh v/s. Phool Kumari – AIR 1971 SC 1337

(14) Shanmugam Pillai v/s. K. Shanmugam Pillai AIR 1972 SC 2069

(15) Maturi Pullaiah v/s. Maturi Narasimham- AIR 1966 SC 1836

(16) Ram Charan v/s. Girja Nandini Devi – AIR 1966 SC 323

(17) Tek Bahadur Bhujil v/s. Debi Singh Bhujil & Ors. AIR 1966 SC 292

(18) Ponnammal v/s. R. Srinivasarangan – AIR 1956 SC 162

(19) Sahu Madho Das v/s. Mukand Ram – AIR 1955 SC 481

(20) Mohd. Amin v/s. Vakil Ahmad – AIR 1952 SC 358