{"id":357349,"date":"2025-08-22T09:30:54","date_gmt":"2025-08-22T04:00:54","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=357349"},"modified":"2025-08-23T16:20:55","modified_gmt":"2025-08-23T10:50:55","slug":"builders-agreement-cant-modify-family-settlement-share-del-hc","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2025\/08\/22\/builders-agreement-cant-modify-family-settlement-share-del-hc\/","title":{"rendered":"Share apportioned by a Family Settlement Agreement cannot be modified by Builder\u2019s Agreement: Delhi High Court"},"content":{"rendered":"
\n

Delhi High Court:<\/span> In an appeal filed under Sections 96<\/a> and 151<\/a> read with Order 41 Rule 1<\/a> of the Civil Procedure Code, 1908<\/a> against the order dated 4-10-2024 (impugned order) directing the Appellants to handover possession of one-half of the fourth floor of the suit property to the Respondents and paying mesne profits to the tune of Rs. 48,000 per month along with 6 per cent per annum interest, the Division Bench of Anil Kshetarpal*<\/span> and Harish Vaidyanathan Shankar, JJ, upheld the impugned order and dismissed the appeal.<\/p>\n

The Court further stated that the shares of family members in a suit property apportioned by a family settlement agreement, cannot be modified by a builders’ agreement.<\/p>\n

Background<\/h3>\n

In the instant case, the suit property was divided between a late X (50 per cent share), Appellant 1 (25 per cent share) and Appellant 2 (25 per cent share). A family settlement dated 27-11-2012 was entered into between the Appellants (as the First Party) and the late X (as the Second Party) wherein the parties had agreed that the suit property would be demolished and constructed anew by a builder. Pursuant to this, a builder’s agreement was signed between the Appellants and late X (collectively as the First Party) and the builder (as the Second Party).<\/p>\n

Once the building was constructed and possession was handed over, the Respondents had filed for partition of suit property in accordance with the terms of the family settlement.<\/p>\n

The Appellants had contended that the builder’s agreement acknowledging the share of the Appellants in contradiction to the share enumerated under the family settlement amounted to novation of the family settlement which thereafter, stood superseded. Furthermore, the family settlement required registration as it amounted to relinquishment or creation of a right in an immovable property worth Rs.100 or more.<\/p>\n

Per contra, the Respondents had contended that the Appellants had trespassed on some part of the fourth floor of the suit property, deprived the Respondents of the complete possession of the said floor, and caused such nuisance that a tenant inducted by them for the portion had left.<\/p>\n

Analysis, Law and Decision<\/h3>\n

The Court noted that the family settlement was a memorandum through which the second and fourth floors of the proposed construction, along with the roof rights fell to the share of late X; whereas the first floor fell to the share of the Appellants. The third floor was agreed to be given to the builder or his nominee. The Court opined that such an agreement merely specified a different manner of enjoyment of property and no new right was sought to be created or extinguished and therefore the agreement did not require registration.<\/p>\n

The Court stated that once the respective shares of the family members in a suit property were delineated by a family settlement, the builder’s agreement would not result in modification or novation.<\/p>\n

The Court observed that Section 62<\/a> of the Contract Act, 1872<\/a> which regulated modification, novation and alteration of a contract requires the parties to substitute a fresh contract with the intent of substituting a previous contract with a new contract. In the instant case, the memorandum of family settlement delineated the rights, title and interest of each family which were in no way modified by the builder’s agreement. Furthermore, the memorandum of family settlement did not create any title, rights or interest in the suit property for the first time. Hence, it was not required to be registered.<\/p>\n

The Court further held that the impugned order directing the appellants to pay mesne profits to the tune of Rs. 48,000 with 6 per cent per annum interest from date of institution of suit till delivery of vacant possession of fourth floor, was valid and did not merit any interference. Accordingly, the appeal was dismissed.<\/p>\n

[Suman Singh Virk v. Deepika Prashar, 2025 SCC OnLine Del 5492<\/a>, decided on 18-8-2025<\/span>]<\/p>\n

Judgement authored by: Justice Anil Kshetarpal<\/span><\/strong><\/p>\n\n

Advocates who appeared in this case:<\/p>\n

For the Appellant:<\/span> Tanmaya Mehta, Anirudh Bhatia, Shreya Sethi, Advocates<\/p>\n

For the Respondent:<\/span> Sanjay Gupta, Ateev Mathur, Anmol Sharma, Advocates<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

“Once, by virtue of the Memorandum of Family Settlement, the respective shares of the family members were identified, the Builders’ Agreement, which is essentially an agreement to construct the building, will not result in its modification or novation.”<\/p>\n","protected":false},"author":67011,"featured_media":357356,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,10],"tags":[51864,50100,2543,75265,83730,87679,45658,31853,87680],"class_list":["post-357349","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-highcourts","tag-builder-agreement","tag-contract-act-1872","tag-Delhi_High_Court","tag-justice-anil-kshetarpal","tag-justice-harish-vaidyanathan-shankar","tag-memorandum-of-family-settlement","tag-novation-of-contract","tag-partition","tag-share-modification-under-family-settlement"],"yoast_head":"\nBuilder's agreement can't modify family settlement share | SCC Times<\/title>\n<meta name=\"description\" content=\"Delhi High Court held that a builders' agreement cannot modify family settlement share of family members given 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