Resolving Property Disputes in India: An Overview of the Legal Process

two business men discussing Property document in India

Resolving Property Disputes in India: An Overview of the Legal Process

There are numerous pending property issues in India. Property disputes can develop between family members, land sellers and buyers, and even landlords and tenants. When property conflicts arise among family members, inheritance laws are implemented. In India, the Transfer of Property Act handles property disputes. This Act controls property transfers in India and serves as the legal foundation for determining and resolving disputes. While movable property is frequently contested, most property disputes in India involve immovable property, such as land or a house.

Dispute Over Property Between Blood Relations

Property disputes are extremely common in Indian households, particularly in joint families. Ancestral property is divided among the legal successors, and the situation becomes more complicated when one member of the family wishes to partition while the other objects to their idea. It has now become an integral feature of every family feud. Most individuals are unaware that the litigation process for family problems is lengthy and expensive and that it does not even guarantee sufficient or suitable results. Even the Indian judicial system cannot guarantee that the current generation or future generations will receive the desired outcomes, which are in their favour.

Property conflicts between brothers are among the most common in India. In India, it is widely assumed that the male child receives the property. The issue arises when there are two or more male children. Brothers frequently quarrel about property division, especially if their parents have not left a will. Such disagreements are resolved in accordance with the applicable inheritance and succession laws.Property disputes account for more than half of the pending cases in India. Despite clear-cut legislation, such conflicts can last for years. Because land is a significant asset in India, the potential for disputes is greater. As a result, you should always have drafted agreements before entering into any real estate transaction.Make and keep wills throughout your life so that your children do not get into property conflicts. Paperwork always decreases uncertainty and, thus, the likelihood of a disagreement.

Memorandum of Family Settlements

A Memorandum of Family Settlements is a written document that describes the arrangement between family members and serves as a record of the mutual agreement regarding the terms of property division. It is for mutual benefit and to avoid time-consuming litigation that leads to conflict among family members. The Supreme Court’s decision in the landmark case of Kale vs Deputy Director of Consolidation stipulates that certain requirements for family settlements must be met.

  • Family settlements must be genuine.
  • Family settlements must be voluntary and not encouraged by deception, compulsion, or undue influence.
  • The aforementioned agreements may even be oral, with no registration required.
  • Registration is required only when the family settlement is reduced to writing.
  • There must be a desire to resolve the issue and the existing antecedent title.

There are two options for resolving property disputes:

  • Settlement: The settlement entails all stakeholders sitting across the table and agreeing on how the assets and property will be distributed. This includes not only immovable property but also moveable goods such as jewellery. Families may hire a neutral third party to ensure discipline during the procedure. A neutral third party can assist the parties in reaching a mutually beneficial solution. Once the family members have agreed on a mutual split, you should draught a settlement agreement. This settlement agreement should be signed by all family members.
  • Litigation: Litigation is just going to court to settle a property dispute. This entails lawyers, court costs, and, more often than not, significant delay. In the first case, unconnected parties usually resort to lawsuits. Litigation involves court processes and procedures, and the disagreement may take a long time to resolve.

Case Laws:

Khunni Lal & Ors. vs. Kunwar Gobind Krishna Narayan & Ors. The Bombay High Court stated in this judgement that if the family relinquishes all of their claims in the property disputes in order to appear to have reached a settlement among family members, the court will consider it to be a family settlement, and it is the duty of the courts to uphold such arrangements.

Ravinder Kaur Grewal & Ors. v. Manjit Kaur & Ors. is the most current Supreme Court case on the subject. On the 31st of July, 2020, a three-judge court reversed the Hon’ble High Court of Punjab and Haryana’s decision in this case. In this case, with the help of known people and family members, a family settlement was reached between closely related parties. The plaintiff was accepted and acknowledged as the only owner in the aforementioned settlement. However, fresh complications arose following the execution. The parties filed a plea in court, alleging that they were the legal owners of the property under the terms of the Memorandum of Settlement. In its decision, the first Appellate Court granted the petitioner’s appeal and decreed the litigation. This prompted the defendants to file a second appeal in the Punjab and Haryana High Court.

In its decision, the High Court overturned the Appellate Court’s verdict, noting that registration is required for a document that creates a claim in favour of the plaintiff over immovable property in which he had no prior rights. The petitioner appealed to the Supreme Court after being dissatisfied with the High Court’s decision. The top court went on to say that not only had a clear family arrangement been created between the parties, but it had also been actively carried out by them. The Supreme Court reiterated in its ruling that a memorandum of family settlement is simply a recording of the terms of settlement previously agreed upon between the parties, and in such a case, registration of such a document is not mandatory yet valid before the law as it does not create or extinguish any right or title.

The Hon’ble Supreme Court heavily relied on the jurisdictional court’s judgement in Kale (supra) to conclude that a family arrangement should be considered legal rather than invalidated on technical grounds and that the Memorandum of Settlement, which is prepared after a family arrangement has been entered into and exists solely for the purpose of the record or for the information of the court for making necessary mutations, did not have to be revoked.

This case was previously referred to a three-judge bench to determine whether a person claiming title through adverse possession can file a complaint under Article 65 of the Limitation Act of 1963 for a permanent injunction seeking property protection. In its observation, the three-judge bench found that the petitioner has no bar under the Limitation Act of 1963 and can sue in the case of infringement of any rights.

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