Kaagazaat

Settlement Agreement for a Money Dispute

At a glance

Price: Free, always.
Stamp duty: A settlement that records a payment to end a dispute is generally treated as an agreement for stamp duty.
Registration: Not compulsorily registrable where the settlement only deals with money and creates no right in immovable property.
Witnesses: Not legally required, but two independent adult witnesses are taken, each with a name and address, because a dispute over a settled claim is very often a dispute over what was agreed and when.

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Free, always.

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Also called

money dispute settlement
compromise agreement for payment
full and final settlement agreement
settlement of claim
dispute settlement deed
samjhauta
razinama
समझौता करार

When you need it

Use this when two people or businesses have a money dispute, such as an unpaid bill, an advance not returned, damages claimed after a failed deal or a disputed account, and they have agreed a sum to end it. It records the claim, the agreed Settlement Amount, how and when it is paid, what happens if a payment is missed, a release of both sides on payment, and that nobody admits anything.

If a case about the dispute is already in court, it also provides for the court to be asked to record the settlement. Not the Debt Settlement Agreement, which is for a private loan between individuals. Not the Compromise Deed in a Property Dispute, which divides or gives up rights in property. Not the One-Time Settlement Proposal, which is only a borrower's offer. Not for a bank or finance company loan, which settles under the lender's own sanction. Read before signing: if a case is pending, the court's order recording the settlement is what ends it, and that is usually done through the advocate. Keep a record of each payment.

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You can fill this one in on this site, and read the whole draft on screen before you decide anything about it. It is a carefully drafted template; it is not advice about your own facts.

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See stamp duty, registration and witnesses

What follows is written for Punjab and Chandigarh. It states the position there rather than describing how it varies, so the amounts below are the ones that apply — worth confirming at the sub-registrar’s office, because rates change. If the property is anywhere else in India, none of this is yours.

Stamp duty

A settlement that records a payment to end a dispute is generally treated as an agreement for stamp duty. Which entry applies, and the figure, differs between Punjab and Chandigarh and depends on how the settlement is worded. PUNJAB: confirm the entry and the current figure with the Sub-Registrar of the tehsil or against the Department of Revenue, Rehabilitation and Disaster Management's published table at revenue.punjab.gov.in before the stamp is bought, and e-stamp through the Stock Holding Corporation of India Limited (SHCIL). CHANDIGARH: confirm the entry and figure against the Chandigarh Administration's Rates of Stamp Duty & Registration Fees table at revenue.chd.gov.in, or with the Sub-Registrar, 30 Bays Building, Sector 17. BOTH: an instrument that is unstamped or insufficiently stamped is inadmissible in evidence under Section 35 of the Indian Stamp Act, 1899 until the deficiency and any penalty are paid.

Registration

Not compulsorily registrable where the settlement only deals with money and creates no right in immovable property. If it also gives up or transfers a right in immovable property, that part must be registered under Section 17 of the Registration Act, 1908, and a different document, such as the Compromise Deed in a Property Dispute, is needed. A settlement filed in a pending case is recorded by the court's order.

Notarisation

Not legally required, but useful: a notary's or Oath Commissioner's stamp fixes the date of signing, which matters if the dates of payment or the running of limitation are ever disputed.

Witnesses

Not legally required, but two independent adult witnesses are taken, each with a name and address, because a dispute over a settled claim is very often a dispute over what was agreed and when.

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Sample preview — placeholder answers, not your data

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SETTLEMENT AGREEMENT

To settle a money dispute without further proceedings.

This Settlement Agreement is made at Chandigarh on 2 April 2026 between:

Ramesh Kumar, acting through its director, Mr Ramesh Kumar, of House No. 214, Sector 15-A, Chandigarh 160015 (the First Party); and

Suresh Enterprises, acting through its partner, Mr Suresh Kumar, of SCO 42, Sector 34-A, Chandigarh 160022 (the Second Party).

1. THE DISPUTE

1.1 The First Party supplied fabrication work to the Second Party between February and May 2026 against invoices totalling Rs 6,40,000. The Second Party says some of the work was defective and has withheld payment.

1.2 The First Party claims ₹6,40,000 (Rupees Six Lakh Forty Thousand only) from the Second Party (the Claimed Amount). The Second Party disputes, or does not accept, the whole or part of that claim. The parties wish to end the dispute without further proceedings, on the terms below.

1.3 A proceeding about this dispute is pending: Civil Suit No. 412 of 2026 in the court of the Civil Judge (Senior Division), Chandigarh (the Pending Case).

2. THE SETTLEMENT AMOUNT

2.1 The Second Party shall pay the First Party ₹5,00,000 (Rupees Five Lakh only) (the Settlement Amount) in full and final settlement of the dispute and of the Claimed Amount.

2.2 The Settlement Amount is to be paid in a single payment, by bank transfer to the account of the First Party, the details of which the First Party has given in writing, without any deduction.

2.3 The Second Party shall pay the whole Settlement Amount in a single payment on or before 1 April 2026.

3. IF A PAYMENT IS MISSED

3.1 If the Second Party fails to pay any amount within 7 days of its due date, only the unpaid part of the Settlement Amount remains payable, and the First Party may recover it.

4. RELEASE

4.1 On receipt of the whole Settlement Amount, the First Party releases the Second Party from every claim arising out of the dispute described in clause 1, whether or not it has been made.

4.2 Each party also gives up every claim and counterclaim it has against the other arising out of that dispute.

4.3 This release does not cover a breach of this Agreement, or any dealing between the parties that is not part of the dispute described in clause 1.

4.4 The parties will jointly apply to the court in the Pending Case to record this settlement and dispose of the Pending Case in its terms. Where the law lets that case be compromised or compounded, the First Party will join in doing so once the whole Settlement Amount is received. Each party will bear its own costs of the Pending Case unless the court orders otherwise.

5. NO ADMISSION

5.1 This Agreement is a compromise. Nothing in it is an admission by either party of any liability, or that any claim is true.

Questions about this document

Does the Settlement Agreement for a Money Dispute need stamp paper or stamp duty in Punjab and Chandigarh?

A settlement that records a payment to end a dispute is generally treated as an agreement for stamp duty.

See the full position on stamp duty, registration and witnesses

Does the Settlement Agreement for a Money Dispute need registration in Punjab and Chandigarh?

Not compulsorily registrable where the settlement only deals with money and creates no right in immovable property.

See the full position on stamp duty, registration and witnesses

What does the Settlement Agreement for a Money Dispute cost on Kaagazaat?

Free, always.

Does the Settlement Agreement for a Money Dispute need witnesses?

Not legally required, but two independent adult witnesses are taken, each with a name and address, because a dispute over a settled claim is very often a dispute over what was agreed and when.

See the full position on stamp duty, registration and witnesses

Often needed with this document

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