Family settlements in Delhi: when the paper needs registering

A family settlement is an agreement among family members that settles who holds what, usually to end a dispute or to stop one starting. It often covers property several people have a claim to, such as a parent's estate. A partition deed is narrower: co-owners of a joint property divide it into separate shares.

The leading case is Kale v. Deputy Director of Consolidation, decided in 1976. The Court set out what makes a family settlement binding:

• It is made in good faith to settle family disputes and rival claims, with a fair division of the property.
• It is voluntary, not obtained by fraud, coercion or undue influence.
• It can be oral. An oral settlement needs no registration.
• The parties have some existing title, claim or interest, even a possible one.
• Once honestly made, it is final and binding on the people who are party to it.

It depends on what the paper does. In Kale, the Court held that registration is needed where the terms of the settlement are set down in writing as the settlement itself. A memorandum written afterwards to record an arrangement already made, for the family's records or to inform a court, does not create or end anyone's rights in the property, so it is not compulsorily registrable.

For MCD property, the change of name goes under the category for a registered partition deed or family settlement agreement. MCD lists an affidavit on ₹10 stamp paper and an indemnity bond on ₹100 stamp paper (both notarised), receipts of property tax paid to date, the complete chain of ownership documents, the death certificate where the settlement follows a death, and transfer duty if there was consideration and it has not been paid.

• Someone is left out. A settlement binds the people who are party to it. A family member with a claim who didn't join can still assert it.
• The document is drafted as the settlement itself but never registered. It then cannot be relied on to transfer the shares, and MCD's category asks for a registered deed.
• The property description is vague. 'The ground floor' of a house with two ground-floor units is the next dispute. Use plot numbers, floors, areas and boundaries.
• Money changes hands to even out the shares. That is consideration, and MCD charges transfer duty on it when the record is changed.

Whether a family document needs registering turns on its wording. Have it read by an advocate before anyone signs. That costs far less than arguing later about what it meant.

This is a general explanation, not advice on your property. Procedure, rates and thresholds differ by state and municipality and change over time. Kabir Real Estates provides advisory and due-diligence assistance and does not issue title certificates or formal legal opinions. Where a matter needs one, we will tell you so.