Supreme Court Upholds Validity of Decree Based on Pre-Existing Rights: Gurcharan Singh vs. Angrez Kaur (2020)

Date of the Judgment: 19 March 2020

Citation: (2020) INSC 248

Judges: Ashok Bhushan, J., Navin Sinha, J.

Can a court decree, based on a previously existing right, be considered invalid if it is not registered? The Supreme Court of India recently addressed this question in a property dispute case. This case revolves around a family dispute where a decree was challenged for lack of registration. The Supreme Court bench, comprising Justices Ashok Bhushan and Navin Sinha, delivered the judgment, with Justice Ashok Bhushan authoring the opinion.

Case Background

The dispute involves land originally owned by Bhajan Singh in Village Siraj Majra. Bhajan Singh had two daughters, Angrez Kaur and Paramjit Kaur, with his wife Gurmail Kaur. Bhajan Singh and Gurmail Kaur divorced on 15 September 1973. Gurmail Kaur then moved to Village Jalowal with her daughters, residing with Maghar Singh, Bhajan Singh’s brother. Bhajan Singh stayed in Village Siraj Majra, where he was cared for by Gurcharan Singh, Gurnam Singh, and Kulwant Singh (the appellants).

On 2 September 1986, Bhajan Singh executed a registered Will in favor of the appellants. Subsequently, on 21 September 1994, the appellants filed a civil suit (No. 556) seeking a declaration of ownership based on the Will and a family settlement dated 15 June 1994. Bhajan Singh admitted the claims in his written statement on 3 December 1994 and in a court statement on the same day. The court decreed the suit on 9 January 1995, and a mutation was recorded in favor of the appellants on 3 March 1995. Bhajan Singh passed away on 24 April 1998.

After Bhajan Singh’s death, Angrez Kaur and Paramjit Kaur filed a civil suit on 19 May 1998, challenging the decree of 9 January 1995, claiming it was illegal and void. The appellants contested this claim, asserting the validity of the Will and the decree. The trial court dismissed the daughters’ suit on 5 March 2003, but the first appellate court reversed this decision on 13 August 2004, holding the decree required registration. The High Court upheld the appellate court’s decision, leading to the present appeal before the Supreme Court.

Timeline:

Course of Proceedings

The trial court initially dismissed the suit filed by Angrez Kaur and Paramjit Kaur, holding that the decree dated 9 January 1995 was valid and did not require registration. The trial court also noted that the daughters had not visited their father after the divorce, and Bhajan Singh lived with and was cared for by the appellants. The first appellate court reversed this decision, stating that the decree created new rights for the first time and thus required registration under Section 17 of the Registration Act, 1908. The High Court of Punjab and Haryana upheld the first appellate court’s decision, leading to the present appeal before the Supreme Court.

Legal Framework

The core legal issue revolves around Section 17 of the Registration Act, 1908, which mandates the registration of certain documents. Specifically, Section 17(1) lists documents that require compulsory registration, including:

• (a) instruments of gift of immovable property;
• (b) other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property;
• (c) non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation or extinction of any such right, title or interest; and
• (d) leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent;
• (e) non-testamentary instruments transferring or assigning any decree or order of a Court or any award when such decree or order or award purports or operates to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property:

However, Section 17(2)(vi) provides an exception, stating that nothing in clauses (b) and (c) of sub-section (1) applies to:

• (vi) any decree or order of a Court except a decree or order expressed to be made on a compromise and comprising immovable property other than that which is the subject-matter of the suit or proceeding]; or

The key question is whether the decree of 9 January 1995 falls under the exception in Section 17(2)(vi) or requires registration under Section 17(1)(b).

Arguments

Appellants’ Arguments (Gurcharan Singh & Ors.):

• The decree dated 09.01.1995 was a valid decree and did not require registration because it was based on a pre-existing right.
• Bhajan Singh had executed a registered Will dated 02.09.1986 in favor of the appellants, which was further supported by the family settlement dated 15.06.1994.
• Bhajan Singh admitted the claim of the appellants in his written statement and in his statement before the court.
• The decree was not based on any fraud or coercion.
• The appellants had proved the Will by producing the scribe and the clerk from the Registrar’s office.
• The family settlement was valid because Bhajan Singh was living with and being cared for by the appellants.

Respondents’ Arguments (Angrez Kaur & Anr.):

• The decree dated 09.01.1995 was obtained by fraud because the appellants falsely claimed to be nephews of Bhajan Singh.
• The decree required compulsory registration under Section 17 of the Registration Act, 1908, as it created new rights for the first time.
• The Will dated 02.09.1986 was not validly proved because one of the attesting witnesses was alive but not produced.
• There could be no valid family settlement in favor of a person who is not related by blood.

Issues Framed by the Supreme Court

The trial court framed the following issues:

1. Whether the judgment and decree passed in Civil Suit No. 556 of 21.09.1994, decided on 09.01.1995, is illegal, null, and void?
2. Whether the plaintiffs are entitled to possession of the suit land?
3. Whether Bhajan Singh executed a legal and valid will dated 02.09.1986 in favor of the defendants?
4. Whether the suit is not maintainable?
5. Whether the plaint is liable to be rejected under Order 7 Rule 11 of the Code of Civil Procedure?
6. Whether the suit is within limitation?
7. Whether the defendants have taken possession of the suit land from the plaintiffs three weeks before filing the suit?

Treatment of the Issue by the Court:

Authorities

The Supreme Court considered the following authorities:

Judgment

How each authority was viewed by the Court:

• The Supreme Court distinguished Bhoop Singh vs. Ram Singh Major and Others, (1995) 5 SCC 709*, stating that the decree in the present case was based on pre-existing rights, unlike the decree in Bhoop Singh.
• The Supreme Court relied on Mohammade Yusuf & Ors. Vs. Rajkumar & Ors., Civil Appeal No. 800 of 2020* and Som Dev and Others Vs. Rati Ram and Another, (2006) 10 SCC 788* to reiterate that a decree related to the subject matter of the suit does not require registration under Section 17(2)(vi).

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the fact that the decree dated 09.01.1995 was based on pre-existing rights claimed by the appellants. The court emphasized that the decree was a result of Bhajan Singh’s admission of the appellants’ claims, which were rooted in a registered Will and a family settlement. The court also considered the fact that Bhajan Singh lived with and was cared for by the appellants after his divorce, which further supported the validity of the decree. The court rejected the fraud argument, noting that Bhajan Singh never objected to the decree during his lifetime.

Logical Reasoning:

Key Takeaways

• A decree based on pre-existing rights does not require registration under Section 17 of the Registration Act, 1908.
• Compromise decrees that create new rights for the first time require registration.
• Decrees related to the subject matter of the suit are exempted from registration under Section 17(2)(vi).
• The court emphasized the importance of the factual matrix of the case, including the conduct of the parties and the circumstances under which the decree was passed.

Directions

The Supreme Court set aside the judgment of the High Court and the first appellate court and restored the decree of the trial court.

Development of Law

The Supreme Court clarified that a decree based on pre-existing rights does not require compulsory registration under Section 17 of the Registration Act, 1908. This ruling reinforces the exception provided in Section 17(2)(vi) and provides clarity on the distinction between decrees that create new rights and those that recognize existing rights. The ratio decidendi is that a decree that does not create new rights but rather acknowledges pre-existing rights does not require registration. This is a reaffirmation of the position of law.

Conclusion

The Supreme Court allowed the appeal, setting aside the judgments of the High Court and the first appellate court and restoring the trial court’s decree. The court held that the decree dated 09.01.1995 was valid and did not require registration under Section 17(2)(vi) of the Registration Act, 1908, as it was based on pre-existing rights. The court also rejected the claim of fraud, emphasizing that Bhajan Singh had admitted the claims and never objected to the decree during his lifetime.