Law of Registration
The Will and the Settlement Deed Distinguished: The Testamentary Line, and Why the Name on the Deed Decides Nothing
A will and a settlement deed may dispose of the same property, among the same family, in the same shares, and may read almost identically. The whole difference is when the disposition takes effect. A settlement is non testamentary: it operates at once, and once executed and registered the settlor cannot take it back. A will is testamentary: it operates only on death, and until then the testator may sell the property or tear the will up. That line decides registration, attestation, stamp duty, probate and the book the document is entered in. And because the line is drawn by what the instrument does, the name written at the head of it decides nothing at all.
The line between the two, and the consequences that follow on either side of it
1. The Two Definitions
Section 2(h), Indian Succession Act, 1925, and Section 2(24), Indian Stamp Act, 1899 Succession Act, Section 2(h). "will" means the legal declaration of the intention of a testator with respect to his property which he desires to be carried into effect after his death. Registration Act, Section 2(16). "will" includes a codicil and every writing making a voluntary posthumous disposition of property. Stamp Act, Section 2(24). "settlement" means any non testamentary disposition, in writing, of movable or immovable property made (a) in consideration of marriage; (b) for the purpose of distributing property of the settlor among his family or those for whom he desires to provide, or for the purpose of providing for some person dependent on him; or (c) for any religious or charitable purpose. |
The two definitions are drafted against each other. The Succession Act defines a will by reference to what takes effect after death; the Stamp Act defines a settlement as a disposition that is expressly non testamentary. Between them they exhaust the field, and a document must be one or the other.
2. The Two Compared
Will | Settlement deed | |
Character | Testamentary: a declaration of intention as to property after death | Non testamentary: a present disposition |
When it operates | On the death of the testator | At once, on execution and registration |
Does the maker part with anything now? | No. He keeps the property and the power to deal with it | Yes, to the extent settled |
Revocable | At any time until death, Section 62 of the Succession Act | No, unless a power of revocation is reserved in the deed |
Registration | Optional, Sections 17(2)(b) and 18(e) | Compulsory above one hundred rupees, Section 17(1)(b) |
Time for presentation | At any time, Section 27; after death by the executor or a claimant, Sections 40 and 41 | Four months from execution, Section 23, extendable under Sections 25 and 26 |
Attestation | Two or more witnesses, Section 63 of the Succession Act; a will attested by one is void | Not required by statute, though universal in practice |
Stamp duty | None | Payable under the State article |
Which book | Book 3, with access restricted by Section 57(2) | Book 1, open to inspection, Section 57(1) |
Deposit facility | Available in a sealed cover, Sections 42 to 46 | None |
Probate | May be required under Sections 213 and 57 of the Succession Act | Does not arise |
Proof in court | An attesting witness must be called; wills are excluded from the proviso to Section 67 BSA | No attesting witness need be called if registered and execution is not denied |
Destruction as unclaimed | Wills are excepted from Section 85 | Liable to destruction after two years unclaimed |
3. Why Each Consequence Follows
1. A will creates no right in praesenti, so it falls outside Section 17(1)(b) and (c), which speak of non testamentary instruments. Section 17(2)(b) confirms it, and Section 18(e) makes registration optional.
2. A settlement does create rights in praesenti, so it falls squarely within Section 17(1)(b) and must be registered where the value is one hundred rupees or more.
3. Because a will may be revoked at any moment, there is no point in a time limit, and Section 27 allows presentation at any time, in place of the four months under Section 23.
4. Because a will takes effect only on death, it must be capable of being presented after death, and Sections 40 and 41 provide for that.
5. Because the testator's dispositions should stay private while he lives, Book 3 is kept separately and Section 57(2) restricts copies to him during his lifetime.
6. Because the testator cannot be called to speak to the document, an attesting witness must be, and wills are excluded from the proviso to Section 67 of the Bharatiya Sakshya Adhiniyam, 2023.
7. Because a will transfers nothing while the maker lives, there is nothing to tax, and no stamp duty is payable; a settlement transfers, and is taxed.
8. Because a settlement is a completed transaction, it goes on the public record, and Books 1 and 2 and the indexes are open to anyone under Section 57(1).
4. The Label Does Not Decide It
This is the practical heart of the subject. The character of a document is determined by its substance, and the question is always the same: did the maker part with anything during his lifetime, or did he merely declare what should happen after it?
The document | Its true character | What follows |
A deed headed "Settlement Deed", providing that the property shall pass to the settlor's children on his death, and reserving a power to cancel it | A will | Registration is optional; but attestation by two witnesses under Section 63 is essential, and if it was not attested the document fails as a will |
A deed headed "Will", by which the maker transfers the property to his son at once and reserves a life interest to himself | A settlement | Compulsorily registrable under Section 17(1)(b); if unregistered it transfers nothing, and it cannot be saved by treating it as a will unless it was attested |
A deed headed "Settlement Deed", transferring the property now, reserving the settlor's enjoyment for life | A settlement | Registrable; the remainder passes at once and the deed is irrevocable |
A deed headed "Will", in the ordinary form, attested by two witnesses | A will | Registration optional; attestation essential; revocable until death |
A deed disposing of part of the property now and part on death | Both, in part | The part operating in praesenti is registrable; the testamentary part is a will and must be attested |
⚠ A document that is both badly named and badly executed fails twice The real danger in this area is not misclassification but the consequence of it. A deed drawn as a settlement but operating only on death is a will, and if the draftsman did not take two attesting witnesses, because a settlement does not need them, the document fails under Section 63 of the Succession Act. Conversely, a deed drawn as a will but operating at once is a settlement, and if it was not registered, because a will need not be, it transfers nothing under Section 17(1)(b) read with Section 49. In each case the mistake about the label produces a failure to satisfy the formality the true character required. The safe course is to decide at the outset whether the maker is parting with the property now, and then to satisfy both sets of formalities: register it, and attest it by two witnesses. |
5. The Reserved Life Interest
The commonest reason for confusing the two is a reserved life interest. A settlor transfers the property to his children but continues to live in the house, take the rents and pay the taxes until he dies. It looks as though the children get nothing until his death, and it is therefore supposed to be a will. It is not.
- The disposition of the remainder takes effect at once. The settlor has parted with everything except the right to enjoy the property while he lives, and that parting is immediate and irrevocable.
- A will transfers nothing at all. The testator retains the property itself and may sell it, mortgage it or give it away, and the legatee has no interest of any kind until death.
- That is the test to apply. Ask whether the maker could sell the property tomorrow, free of the document. If he could, the document is testamentary. If he could not, it is a present disposition.
- The same reasoning applies to gifts. The Supreme Court held in Renikuntla Rajamma v. K. Sarwanamma, (2014) 9 SCC 445 that delivery of possession is not a condition precedent to a gift under Section 123, and that a donor may reserve to herself the right of enjoyment during her lifetime without affecting the validity of the gift.
6. The Practical Choice
If the maker wants | The instrument | The cost |
To provide for his family now, and be unable to change his mind | A settlement deed | Stamp duty and registration fee, payable now |
To keep control and decide again later | A will | None now; but the beneficiary must prove the will after his death |
To transfer now but keep living in the property | A settlement deed reserving a life interest | The same as a settlement |
To keep the disposition private during his lifetime | A will, deposited in a sealed cover under Sections 42 to 46 | None |
To minimise the risk of a dispute after his death | A registered settlement, completed in his lifetime | Duty now, but a far stronger document than a will |
To dispose of property he does not yet own | A will; a settlement can only deal with existing property | None now |
The trade off is the same one that runs between a gift and a will. A settlement buys certainty at the price of control and of duty paid now. A will keeps control and costs nothing, but leaves the beneficiary to prove the document against whatever challenge the disappointed heirs raise, and registration of the will does very little to help him: it proves that the document existed on a date, and not that the testator was of sound mind, understood it, or was free from influence.
7. The Position Stated Shortly
1. A will is testamentary and operates on death; a settlement is non testamentary and operates at once.
2. A will is revocable at any time until death, Section 62 of the Indian Succession Act, 1925; a settlement is irrevocable unless a power of revocation is reserved in the deed.
3. A will is outside Section 17(1)(b) and (c), which speak of non testamentary instruments, and is optionally registrable under Section 18(e).
4. A settlement creates rights in praesenti and is compulsorily registrable above one hundred rupees under Section 17(1)(b).
5. A will may be presented at any time under Section 27 and after death under Sections 40 and 41; a settlement within four months under Section 23.
6. A will must be attested by two or more witnesses under Section 63 and is void without it; a settlement needs no attestation by statute.
7. A will attracts no stamp duty; a settlement attracts duty under the State article.
8. A will goes into Book 3 with restricted access under Section 57(2); a settlement into Book 1, open to inspection.
9. A will may be deposited in a sealed cover under Sections 42 to 46; a settlement may not.
10. Wills are excluded from the proviso to Section 67 of the Bharatiya Sakshya Adhiniyam, 2023, so an attesting witness must be called even for a registered will.
11. The label decides nothing: a settlement taking effect on death is a will, and a will operating at once is a settlement.
12. A reserved life interest does not make a deed testamentary, because the remainder passes at once.
13. The safest drafting course is to register the deed and attest it by two witnesses, so that it satisfies whichever set of formalities its true character demands.