00:00Hello everyone, I am advocate Dinky Aghi, working as legal associate at NRI Legal Services.
00:06Today, I will be sharing information regarding family settlement for property disputes in India.
00:13Conflicts over properties have been prevalent in India forever,
00:17whether it is in low-income households or ultra-rich families.
00:21The property becomes a bone of contention amongst family members irrespective of their financial status.
00:27When such disputes arise, the most common solution preferred in India is to drag such matters to courts.
00:35However, people rarely realize that court procedures are quite expensive, lengthy and tedious.
00:43Also, there is no guarantee for a satisfactory resolution.
00:47Globally, alternative dispute resolution is being considered as a more preferred mode of resolving disputes over litigation.
00:54The merits of conciliatory and mediation procedures are being given more emphasis over lengthy and expensive litigation.
01:04Similarly, the Indian legislature is also attempting to promote alternative dispute resolution
01:10and therefore, nowadays, family settlement is being considered as a far more amicable
01:17and pocket-friendly method for resolving disputes amongst family members.
01:22So, now let us first understand what family settlement actually is.
01:27Family settlement is an agreement through which family members mutually work out
01:33how a property will be distributed amongst themselves.
01:37Now, for example, Mr. A died interstate, leaving behind two sons and one daughter.
01:43He had three residential properties and one agricultural land.
01:48Now, as there is no will, the independent share of each of his legal hairs is not allotted.
01:54As the entire property will be considered as one pool, each of these legal hairs will have an equal share
02:02in the entire estate.
02:04Now, as it is practically not convenient to use each of these properties jointly,
02:10a family settlement can be arrived at between these legal hairs to decide their independent shares.
02:17So, the method of family settlement is mostly preferred in case of joint properties or common property disputes
02:25rather than settling disputes relating to individual properties or self-acquired properties.
02:30Such arrangements are not only limited to the title of the property
02:35but can also be used for its use and possession.
02:40Indian courts have often regarded these settlements as transaction between the family members
02:46in order to preserve their property, peace and reputation.
02:50Now, such arrangements are based upon an assumption that if a dispute is settled with amicable family settlement,
02:59the parties will not have a right to reopen the case at a later date.
03:05Now, since we have understood the meaning of family settlement,
03:09now let us understand how and when does a property dispute in a family arise.
03:13In India, there is a strong culture of holding the property jointly within a family.
03:19But when the senior-most member of the family dies or there are other differences amongst the family members,
03:26the need for distribution of the joint property arises.
03:31Nowadays, the relationship status and family businesses are getting more and more complicated.
03:37This is mainly because of the fact that each individual family member is seeking for separate ownership and greater independence.
03:46This leads to disputes amongst families.
03:49Now, the dispute is mainly related to the share each owner will get in the property
03:54because at the time of distribution, each of the members want to get maximum share.
04:00So, the property disputes generally arise because of three main reasons.
04:04First, when a person dies interstate and the property is to be divided amongst his or her legal hairs.
04:12Now, when a person dies without a will, the inheritance of the property is done on the basis of inheritance
04:18laws.
04:19Lack of knowledge and clarity of proper inheritance laws can lead to disputes.
04:25The second reason is when the will is challenged.
04:28So, when the desire of the testator of the will is challenged, dispute regarding the distribution of the testator's properties
04:36arise.
04:37Now, since greed is a great leveler, even an iron-clad will can be challenged by dissatisfied beneficiaries
04:44on the ground of undue influence, misrepresentation, mistake or even improper execution.
04:50The third reason is when the joint owners want to have their separate shares in the property.
04:57Lack of mutual understanding and consent can lead to disputes as it becomes very difficult to decide about the independent
05:05shares in the joint property.
05:08Merely reaching out a consensus is not enough.
05:11There are a few legal requirements that are required to be complied with in order to ensure that the family
05:18settlement agreement is valid.
05:20Now, as it is a conciliation process, a third person, usually a lawyer or a senior member of the family,
05:28helps the parties in reaching out an amicable settlement.
05:32Once the terms of these settlements are arrived at, a family settlement agreement is drafted in the same format as
05:41that of a partition deed.
05:42Now, to ensure that such an agreement is maintainable and valid,
05:47it is very important that it is signed by all the concerned family members voluntarily.
05:53Because a missing signature can easily become a ground to challenge such a family settlement agreement in the court at
06:01a later stage.
06:03Now, the question as to whether family settlement arrangements or agreements are legally binding or not
06:09has been answered by the Honourable Supreme Court in various judgments.
06:13In the landmark judgment of Kale v. Deputy Director of Consolidation,
06:18it was held by the Honourable Supreme Court that when bona fide disputes,
06:23whether present or future, are settled by bona fide arrangements that are fair and equitable,
06:29then such arrangements should be considered legally binding upon the parties.
06:34The court further stated that such arrangements will act as an estoppel and will prevent the parties to such settlement
06:42from revoking or challenging it at a later date.
06:46Now, it was also held that the maintainability or evidentiary value of such settlements cannot be challenged
06:53merely because they are not registered.
06:57Now, let us talk about the principles that govern family settlements.
07:00The principles that govern the family settlements are very different from the principles that generally govern the settlements between strangers.
07:09As such cases are very sensitive, the courts consider taking the broadest view in order to ensure that the interest
07:17of all the family members is protected.
07:20The court also give regard to consideration as there might be instances when the case might involve the members who
07:28are not a part of the same family.
07:30Between members of the same family, it is often realized that claims and counterclaims are made against each other
07:37and claims with regard to the ownership of the property or its maintenance are canvassed.
07:43Now, in order to prevent protracted litigation or exposure of private disputes to public gaze,
07:50family members often resort to resolving their disputes amicably with the influence of a well-wisher of the family.
07:58Now, such family settlements may result in either transfer of the property or recognition of certain rights with respect to
08:06the family members in such properties
08:08or even creation of limited rights of certain family members in the property.
08:14Now, the basis on which such family settlements are considered to be valid and binding are the mutual considerations that
08:22flow between the parties
08:24and put an end to the claims and counterclaims filed by them.
08:28If a family settlement is voluntary, bona fide and without any coercion or undue influence,
08:36then the courts tend to uphold such family settlements even if it involves the release, relinquishment or surrender of a
08:44share by a particular party.
08:45In order to widen the scope of family settlements, the Indian judiciary has held in numerous cases that the term
08:53family should not be interpreted in a narrower sense
08:56as it also includes a wide range of members who are a part of the family in its comprehensive sense.
09:03So, now the question arises, is family settlement the end of the road?
09:08Now, although a family settlement agreement cannot be revoked except for a court decree, it can be challenged in the
09:16court of law.
09:17The grounds on which it can be challenged are undue influence, coercion, fraud, forgery, misrepresentation of facts and also improper
09:27execution.
09:29Paying heed to these strip wires while drawing out an agreement can serve the purpose and provide a foolproof, amicable
09:38and binding family settlement.
09:40Now, although it is not a very complicated process, but certain loopholes can ruin the entire purpose for which family
09:48agreements are formed.
09:49Therefore, it becomes very, very important to take these points into consideration in order to reach out a mutually acceptable
09:58family settlement agreement.
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10:04In case you have any doubts, you can drop a comment or write us at query at the rate nrilegalservices
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