Family Settlements, Even If Involving Distant Heirs, Should Be Given Effect To Maintain Harmony Within The Family: Supreme Court

In a significant ruling, the Supreme Court of India has upheld the validity of a family settlement agreement in the case of Naseem Khanam and Others vs. Zaheda Begum (Dead) by LR and Others (Civil Appeal No. 1957 of 2011). The judgment, delivered by Justices C.T. Ravikumar and S.V.N. Bhatti on July 9, 2024, dismissed the appeal filed by the legal representatives of Defendant No. 2, affirming the decisions of the lower courts.

Background of the Case

The dispute revolves around the property of the late Ghouse Khan, who died unmarried and issueless on February 18, 1988. The property in question is a residential house located in Vishakhapatnam. The plaintiffs, Naseem Khanam (Plaintiff No. 1) and Gousia Jasmine (Plaintiff No. 2), sought partition and possession of the property based on a family settlement agreement (Exhibit-A6) dated February 7, 1992.

Legal Issues Involved

1. Validity of Exhibit-A6: The primary issue was whether the family settlement agreement (Exhibit-A6) was valid and enforceable.

2. Inheritance Rights under Mohammedan Law: The case also examined the inheritance rights of Plaintiff No. 2, who is a niece and not a direct heir under Mohammedan Law.

3. Registration and Stamp Duty: The enforceability of Exhibit-A6 was questioned due to its lack of registration and non-payment of requisite stamp duty.

Court’s Decision

The Supreme Court upheld the findings of the Trial Court and the High Court, which had both ruled in favor of the plaintiffs. The key observations and decisions are as follows:

– Interpretation of Exhibit-A6: The Court emphasized that the intention of the parties must be ascertained from the words used in the document. The agreement was found to be a mutual settlement among the family members, giving the western half of the property to Plaintiff No. 2 and the eastern half to Plaintiff No. 1 and the defendants.

– Legal Right of Plaintiff No. 2: Despite not being a direct heir, Plaintiff No. 2 was considered a part of the larger family, and the agreement was intended to provide her with a share of the property to maintain peace within the family.

– Registration and Stamp Duty: The Court noted that while the lack of registration and stamp duty could render the document inadmissible for proving the transaction, it could still be considered for collateral purposes. The objections regarding these issues were not raised at the appropriate stage and thus could not invalidate the agreement.

Observations of the Court

Justice S.V.N. Bhatti, writing for the bench, stated:

> “In construing a document, the fundamental rule is to ascertain the intention from the words used; the surrounding circumstances are to be considered, but that is only for the purpose of finding out the intended meaning of the words which have actually been employed.”

The Court further observed:

> “The agreement made a provision in favor of Plaintiff No. 2 for the reasons noticed by the courts below, viz., that Plaintiff No. 2 had a psychiatric problem and had taken treatment in Vishakhapatnam; Plaintiff No. 2 was in the care of Plaintiff No. 1 for whatever reason and to avoid acrimony in distributing the plaint schedule property.”


The Supreme Court’s decision reinforces the principle that family settlements, even if involving distant heirs, should be given effect to maintain harmony within the family. The judgment underscores the importance of interpreting the true intent of the parties involved in such agreements and highlights the procedural aspects related to the admissibility of documents in legal proceedings.

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