take place within family members rather than among strangers! Family fights have been popular in India right from the times of
“the Mahabharata”. The fight between the Kauravas and the Pandavas is something
which several Indian families witness on a regular basis. As family businesses
grow, new generations join the business, new lines of thinking originate,
disputes originate between family members and gradually it gives rise to a
family settlement / arrangement.
Corporate India has
witnessed a spate of family feuds in almost all major corporate houses.A family arrangement is one of the oldest
alternative dispute resolution mechanisms which is known. The scope of a family
arrangement is extremely wide and is recognised even in ancient English Law.
This is because the world over, Courts lean in favour of peace and amity within
the family rather than family disputes.In the last about 60 years, a good part of the law relating to Family
Arrangement / Settlement is well settled through numerous court decisions
including several decisions of the Supreme Court. It is ironic that in a
country where a substantial part of businesses are run and owned by joint
families, there is no legislation which governs or regulates such family
settlements or arrangements. Hence, the entire law in this respect is case-law
WHAT IS A FAMILY SETTLEMENT / ARRANGEMENT?
It is important to
analyse the basic principles governing family settlement involving properties
held mainly by individuals. Various Courts, including the Supreme Court of
India, have laid down the basic principles relating to family arrangements. Halsbury’s
Laws of England also lays down some important principles in this respect:
may be implied from a long course of dealing, but it is more usual to embody or
to effectuate the agreement in a deed to which the term "family
arrangement" is applied. Family arrangements are governed by principles
which are not applicable to dealings between strangers.