Dear Querist,
Please be advised as folowwing:
Stamp duties can not be avoided in the stated arrangement. However, stamp duty payable on gift deeds is half the amount applicable to deeds of conveyance but you should ascertain the correct position at your end depending on State laws.
You should also simultaneously execute a property transfer deed (either a gift deed or a deed of conveyance) in your favour to present the executed deed for stamping and registration. The property transfer deed to be executed will be in the nature of a ‘Pole Deed’ and will only be signed by the gifter.
Family arrangement as such can be arrived orally or in writing between the parties. 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 would amount to a document of title declaring for future what rights in what properties the parties possess. [Please refer Tek Bhadur Bhuji v. Debi Singh AIR 1966 SC 292 . Awadh Narain Singh v. Narian Mishra, AIR 1962 pat. 400; Mythili Nalini v. Kowmari, AIR 1991 Ker 266; Klae v. Dy Director of Consolidation AIR 1976 SC 807].
Family arrangement, if recorded in a document, requires registration as per the provisions of section 17(1)(b) of the Indian Registration Act, 1908.
But where a document, merely records the terms and recital of the family arrangement after the family arrangement had already been made which per se does not create or extinguish any right in immovable properties, such document does not require registration.
Family Arrangement does not amount to transfer: The transaction of a family settlement entered into by the parties bonafide for the purpose of putting an end to the dispute among family members, does not amount to a transfer. All that is necessary is that the parties must be related to one another in some way and have a possible claim to the property or a claim or even a resemblance of a claim on some other ground as say, affection [Pl see Ram Charan Das v. Girija Nandini Devi, AIR 1966 SC 323 ].
To record a family arrangement arrived at orally, a memorandum of family arrangement-cum-compromise is required to be drawn up wherein the properties and assets belonging to the parties to the family arrangement are required to be specified. In addition to the Memorandum of Family Arrangement –cum-Compromise, other documents like affidavits of each of the parties to the Family Arrangement are required to be obtained wherein each of the parties confirms on oath that he has received a particular asset and the family arrangement is arrived to his total satisfaction and it is binding on him.
The Supreme Court in the case of Sunil Siddharthabhi v. CIT (156 ITR 509) after considering the decisions of their Court in the case of Dewas Cine Corporations, Bankey Lal Vaidya & Malbar Fisheries Co. and the Gujarat High Court decision in the case of Mohanbhai Pamabhai ( 91 ITR 393 ) held, that when a partner retires or the partnership is dissolved, what the partner receives is his share in the partnership. What is contemplated here is a share of the partner qua the net assets of the partnership firm. On evaluation, that share in a particular case may be realized by the receipt of only one of all the assets. What happens here is that a shared interest in all the assets of the firm is replaced by an exclusive interest in an asset of equal value. That is why it has been held that there is no transfer. It is the realization of a pre-existing right.
Trust this would suffice.
However, do seek legal advice and act in consonance with the guidance that you may receive from your solicitors on the subject.
Thanks & regards.
Rabin Majumder
Advocate & Attorney
for Nu.Delhi.Law.Fora.
At:
Ch. 91, Sh. AK Sen Chambers Block,
Supreme Court of India
New Delhi – 110001
