Family Settlement is an instrument to achieve a larger purpose i.e. peace and harmony in the family. The object of an arrangement is to protect the family from long drawn out litigation and to bring goodwill in the family. The parties must held settlement which is in the interest of the family and which avoid disputes between the members of the family.
Family Settlement should be a bonafide one so as to resolve family dispute, it must be fair and equitable division or allotment of properties between the various members of the family, it must be voluntary and not induced by fraud, coercion or influence, it needs to be signed by all the co-sharers.
Family Settlement or Arrangement is an instrument effecting distribution of family assets, wherein a family organizes within itself the shares of properties to which each party therein is entitled.
It is a complete settlement, providing how assets are to be valued, how they are to be divided, how a scheme for dividing some of the specified companies has to be prepared and who has to do this work. Some ‘give and take’ is necessary for the purpose of arriving at a settlement, a partition by metes and bounds may not always be possible.
Such settlements have to be viewed a little differently from ordinary contracts and their internal mechanism for working out the settlement should not be lightly disturbed.
In the catena of judgment the open court as well as the subordinate court heavily rely upon family settlements entered between the parties and favour the settlements.
# Every Family Settlement is not necessary to be registered under S.17 of the Indian Registration Act. The Oral settlement agreed upon can be reduced into writing herein shall supersede any and all prior settlements/agreements between the parties.
The family settlement needs to be very well prepared, each and every clause clearly mentioned and all points which may come up for dispute in future should be perfectly settled. We have seen disputes regarding family settlement arising out between Reliance group, Kamdhenu group and Mahindra group etc.
Family Settlements help in resolving any dispute at a preliminary stage and saving both time and cost of long pending litigations in the court of law. These disputes also hampers the goodwill of the Company in the market.
Such kind of disputes related to public sector enterprises directly effects the general public at large. These disputes should be avoided keeping in mind the interest of general public.
Picture Credits: Mumbai Mirror.