Private property is a necessary institution, at least in a fallen world; men work more and dispute less when goods are private than when they are in common.
R. H. Tawney
Family disputes can result in a forced partition. Partition of property takes region while there may be joint possession of or greater individuals in property, and each of them desires to have a separate share. Partition of assets comes with financial and legal implications.
The partition of property in India is governed by the Partition Act and Personal laws of inheritance.
A family property dispute is no much less than a battlefield with extreme drama and probably even bloodshed unless it’s far settled amicably by a few of the own circle of relatives members. Property disputes aren’t restricted to simply one stratum of society, it’s far not unusual to place anywhere together humble profits families to extravagantly wealthy families, that is why assets disputes are a very not unusual place occurrence amongst Indian families.
The only apparent solution that maximum households locate is a court war via way of means of getting caught in litigation as opposed to settling down the dispute amicably, that is households do not understand that litigation isn’t always simply pricey but a tedious procedure. Besides this, there may be no assurance to get a satisfactory outcome from litigation.
Therefore, the best alternative is to settle family disputes about property amicably without breaking family ties.
Types of Property
There are two categories of property: ancestral and self-acquired.
Ancestral properties are joint family property or property that has been passed down through the generations and are included in the inheritance of all family members or individuals who have a claim to the inherited property. In other words, property that was left behind by great-grandfathers or grandfathers is inherited.
Property that a person has earned or created is referred to as self-acquired property. Self-acquired property can only be passed down by the owner through a will to the beneficiary of their choosing. Self-acquired property is not someone’s property. However, if the owner dies without leaving a will, it becomes ancestral.
Family Disputes and Partition:
Family disputes arise more frequently in the case of joint family property. Partition of joint family property may be affected by:
- Amicable Settlement
- Forced Settlement – By Arbitration /by court
Family arrangement – The family arrangement may be performed amicably. The members negotiate and settle for their proportion as consistent with at the same time agreed terms and conditions. The family arrangement may be oral or written.
If the family arrangement is only a document of what has been settled, it could be decreased in writing and need not be registered. However, if the document is for use as proof of settlement, then the document is registered. A partition deed may be executed while the partition takes place with mutual consent. The partition deed sincerely defines the share of every co-owner. The deed is registered, and the stamp duty is paid.
A partition suit is filed when there is a disagreement and no peaceful resolution can be reached; the court then steps in to mediate a settlement. The property may be divided formally or the proceeds of its sale may be allocated by the court.
Court proceedings take time and can occasionally be expensive. It is preferable to resolve the conflicts out of court peacefully
Each co-share owner is determined, either by consent between the co-owners or by the appointment of a local commissioner by the court.
Concept of memorandum of family settlements
In layman’s words, a Memorandum of Family Settlements is a written record of the agreement between family members concerning the details of the division of property. It describes the arrangement between family members. It is done for both parties benefit and to avoid endless legal disputes that cause family disputes and bad blood. With the use of this Memorandum of Family Settlements, one can avoid the inconveniences and downsides of carried, time-consuming legal processes. The best tool for peacefully resolving family conflicts is this one. This is often confused with the Partition deed. There is a difference between the two, however. While partition deeds simply list the rights and titles to the property, which must eventually be registered, the MOFS records any already orally agreed upon terms and conditions regarding the property. registration is necessary if the MOFS updates any property rights or titles. There are certain requirements for family settlements that are specified in the Supreme Court decision in the illustrious case of Kale v. Deputy Director of Consolidation, [1976 AIR 807], which is summarized as follows:
- Family settlements should be bona fide
- Family settlements must be voluntary and should not be induced by fraud or coercion or undue influence
- The said settlements maybe even oral, wherein no registration is mandatory
- Registration is only necessary when the family settlement is reduced to writing
- There should exist an intention to resolve the dispute and the existing antecedent title
Process and legal requirement of family settlement
Although the fundamental requirements have already been discussed, family settlements must also meet certain legal standards. Executing the Memorandum of Family Settlement is the first and most important stage, usually assisted by a senior member or lawyer. The lawyer helps in understanding each side’s arguments and reaching a consensus on common ground. Furthermore, all parties/family members involved in the settlement dispute must sign it. The MOFS would thereafter be registered in accordance with Section 17 of the Indian Registration Act of 1908. (which is optional if it is an oral agreement). It is crucial to point out that this document shouldn’t be viewed as a gift or sale deed. A properly executed memorandum of family settlement can be contested, but it cannot be revoked without a court order.
EFFECTS OF PARTITION
- After the partition is completed, joint ownership ends, and each co-owner is now the sole owner of his or her portion and free to manage it as they see fit.
- Partition occurs when all co-owners shares are severed. It is a separation of shares when one co-owner separates while the others continue to own the business together.
- It entails the sale and relinquishment of property rights.
- The assets are divided or sold, and the net revenues are allocated.
It is well knowledge that moral standards decrease as wealth increases. The property issue has caught family members and close friends off guard, and they are determined to taint their amicable and cordial relationships by protracted filing a lawsuit for partitions in the courts. The best alternative for resolving such family conflicts is the Memorandum of Family Settlements, which has repeatedly been demonstrated to be more beneficial in maintaining amicable relationships with our loved ones while saving judicial time. Because the MOFS’s drafted provisions will decide whether or not the registration requirement is met, careful execution of the MOFS is recommended. Family conflicts could lead to forced partitioning. A piece of property is divided when two or more people jointly hold it and each wants to maintain a certain portion. The split of the property has a financial and legal impact. In India, property division is governed by the Partition Act and specific inheritance rules.
Case study and judicial analysis
Khunni Lal & Ors. vs Kunwar Gobind Krishna Narayan & anr,1911 (13) BOMLR 427
In this judgment, the Bombay High Court stated that if the family relinquishes all their claims in the property disputes so as to appear as if they have concluded a settlement between the family members, the court will deem it to be a family settlement and it is the duty of the courts to uphold such arrangements.
S. Shanmugan Pillai & ors. vs K. Shanmugan Pillai & ors.,1972 AIR 2069
In this case, the Supreme Court is inclined toward family arrangements that bring about harmony, by way of amicable settlement of any property dispute arising between the close relations. Further, the court shall be reluctant to disturb any peaceful settlement that may arise through mutual consensus of the parties involved.
Tek Bahadur Bhujil vs Devi Singh Bhujil, 1965 AIR 1966 SC 292
The Supreme Court in its judgment validated oral family arrangements and held that registration is compulsory if the arrangements are in writing.
Mt. Mahadei Kunwar vs Padarath Chaube & anr., AIR 1937
In this judgment, The Allahabad High Court held that some family arrangements could consider the transfer of property and settlement of a dispute. It is at the discretion of the court whether a family arrangement requires compulsory registration or not. In the end, it was concluded that if the family arrangement involved a declaration of rights, then, it requires registration.
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