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A memorandum recording an oral family settlement is not an instrument to divide property and is therefore, not required to be stamped: High Court of Delhi

Family settlements are not required to be compulsorily registered, and stamp duty is not required to be compulsorily paid in respect of the same, when the settlement has been arrived at initially as an oral partition and is thereafter put into writing for the purpose of information and the same was upheld by High Court of Delhi through the learned bench led by JUSTICE PRATHIBA M. SINGH in the case of HIMANI WALIA vs. HEMANT WALIA & ORS. [EX.P. 26/2019] on 23.03.2022.

The facts of the case are that a suit seeking partition and other reliefs was filed before the Court by the legal heirs of Late Sh. S.S. Walia who had passed away. The deceased had a large number of moveable and immovable assets which included the business of a petrol station, export business, various immovable properties in prime localities in Delhi and Noida, fixed deposit receipts and bank accounts, paintings, antiques, artworks, shares in various companies and vehicles, etc. During the pendency of the suit itself, the three children and the wife of the deceased with the assistance of their Counsels had arrived at a settlement. Thereafter, the terms of settlement were incorporated into the ‘Memorandum of Family Settlement and Arrangement’.

In order to prepare the decree sheet, the Registry of the Court directed furnishing of valuation reports of the assets for the purpose of calculating the stamp duty. Thus, the present application has been filed by the Applicant seeking waiver of payment of stamp duty and cancellation of the notices.

The applicant’s counsel submitted that similar notices have been received by all the other legal heirs as well. In addition, various Collector’s offices have already issued notices in respect of the stamp duty payable. The partition had been agreed upon between the parties by way of oral agreement with the intervention of their counsels. The memorandum of settlement does not itself partition the properties, but only records the same as an aid of memory.

The Court held that there is no requirement of valuation of the suit properties in the present case. It was observed that, “A memorandum recording an oral family settlement which has already taken place is not an instrument dividing or agreeing to divide property and is therefore, not required to be stamped. Family settlements are not required to be compulsorily registered, and stamp duty is not required to be compulsorily paid in respect of the same, when the settlement has been arrived at initially as an oral partition and is thereafter put into writing for the purpose of information.”

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Judgment reviewed by – Shristi Suman

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