SUBHASH CHANDER BAJAJ (SINCE DECEASED) THR LRS & ORS v. INDERJIT BAJAJ (SINCE DECEASED) (Delhi High Court)

The Delhi High Court in SUBHASH CHANDER BAJAJ (SINCE DECEASED) THR LRS & ORS v. INDERJIT BAJAJ (SINCE DECEASED) THR LRS & ORS, through Justice Rekha Palli and Justice Saurabh Banerjee, ruled that the Single Judge accurately followed established legal principles regarding the Memorandum of Family Settlement. They found that the Family Settlement , which records a past oral partition of property among the late Mr. Amarnath Bajaj’s sons, serves merely as a record of their settlement and doesn’t need to be registered.

In this case, an appeal was made under Section 37 of the Arbitration and Conciliation Act, 1996. It aimed to challenge the Single Judge’s decision that stated the Arbitrator’s claim about the Family Settlement being invalid because it was unregistered was wrong. The Single Judge confirmed that the Family Settlement was valid, making all parties accountable to its terms. The dispute was about the business and properties of the late Mr. Bajaj. After his passing, the parties signed a retirement deed and a Memorandum of Settlement. Since their disagreements persisted, they opted for arbitration. The Arbitrator ruled the Family Settlement invalid due to its unregistered status and ordered the property claimed by respondent no.1 to be evenly split among all heirs. The appellant also filed an application under Section 34, which they later withdrew, while respondent no.1 continued their challenge, leading to the Single Judge’s approving order.

The court observed that the Single Judge considered the Arbitrator’s factual findings. The record indicated that the Family Settlement resulted from ongoing discussions among the parties after their father’s death. It was clear from the Arbitrator’s findings that the Family Settlement was just a record of various settlements made over time, following their father’s wishes, including his Will and the retirement deed signed by the appellants. Thus, the court confirmed that the Single Judge had rightly interpreted the legal position concerning the Family Settlement, noting it reflected the earlier oral partition and was simply a Memorandum documenting the existing agreement. Additionally, the court stated that the Family Settlement did not need registration.

The court also referenced past rulings in Shakeel Ahmed v. Syed Akhlaq Hussain MANU/SC/1257/2023), Veeneta v. Jyoti Gupta [MANU/DE/3571/2024] and of the Andhra
Pradesh High Court in Kalathooru Raghavareddi V. Kalathooru Venkataredii & Ors.[MANU/AP/0045/1967], stating that a document that must be registered can’t be valid unless it is registered. However, the facts established by both the Arbitrator and the Single Judge indicated that the Family Settlement was merely documenting an oral agreement that was already in place. Therefore, the cases cited by the appellants didn’t apply here.

Furthermore, the court pointed out that the appellants had themselves relied on the Family Settlement , which they now claimed was invalid, to request property changes with the DDA. It was acknowledged that a Sale Deed made by the appellants with a third party on January 5, 2024, mentioned the very same Family Settlement . Thus, since the appellants relied on the Family Settlement , they couldn’t now reverse their position and argue that it was invalid or could not be acted upon by the parties.

In the end, the court dismissed the appeal.