Family arrangement can be arrived at orally
Family arrangement can be arrived at even orally. Its terms can be recorded in writing as a memorandum of what has been settled among the parties.
Such a memorandum is nothing but the minutes of what has already been agreed to by the parties. The memorandum thus drawn up does not create or extinguish any right to immovable property of its own.
In TekBahadurBhujil v Debi Singh Bhujil and Ors (AIR 1966 SC 292), the SC holds:
“Family arrangement as such can be arrived at orally. Its terms may be recorded in writing as a memorandum of what had been agreed upon between the parties. The memorandum need not be prepared for the purpose of being used as a document on which future title of the parties be founded. It is usually prepared as a record of what had been agreed upon so that there be no hazy notions about it in future. It is only when the parties reduce the family arrangement in 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 would require registration as it is then that it would be a document of title declaring for future what rights in what properties the parties possess“.
Oral family settlement needs no registration
A family settlement made orally and acted upon based on the oral settlement in the past but recorded subsequently in the form of a Memorandum, needs no registration. In such a case, the memorandum of family settlement prepared on the basis of previous oral settlement which has already been acted upon, does not require compulsory registration under the Registration Act. Such an unregistered family settlement deed is admissible in evidence, as well (MunnaLal (Dead) By Lrs. And Ors. vsSurajBhan And Ors :AIR 1975 SC 1119).
There is a distinction between a document of family settlement containing the terms and recitals of a family arrangement and a mere memorandum prepared after the family arrangement had already been made either for the purpose of having a record of such division or for passing on information to the court or for making necessary mutation.
In the former case, the document creates some rights to the parties involved, whereas in the latter case, the memorandum itself does not create or extinguish any rights in immovable properties. Therefore, such a memorandum in the latter case needs no compulsory registration under Section 17(2) of the Registration Act.