PETITIONER:
SATISH KUMAR & ORS.
Vs.
RESPONDENT:
SURINDER KUMAR & ORS.
DATE OF JUDGMENT:
27/09/1968
BENCH:
SIKRI, S.M.
BENCH:
SIKRI, S.M.
BACHAWAT, R.S.
HEGDE, K.S.
CITATION:
1970 AIR 833 1969 SCR (2) 240
CITATOR INFO :
R 1974 SC1066 (5)
R 1974 SC1912 (6)
D 1984 SC 241 (67)
D 1987 SC 841 (15)
R 1989 SC1923 (16)
R 1990 SC 53 (18)
ACT:
Indian Arbitration Act (10 of 1940)--Award in respect
of property over Rs. 100--Registration if compulsory.
Indian Registration Act (16 of 1908), s 17(1)
(b)--Award in respect of immovable property over Rs.
100--Registration if compulsory.
HEADNOTE:
An arbitrator appointed by the appellants and respondent
partitioned their immovable property exceeding the value of
Rs. 100. The arbitrator applied under s. 14 of the Indian
Arbitration Act, 1940 to the Court for making the award a
rule of the court. On the question whether the award was
admissible in evidence as it was not registered,
HELD:(per Full Court.) The award required registration.
(Per Sikri and Bachawat, JJ.) All claims which are the
subject matter of a reference to arbitration merge in the
award which is pronounced In the proceedings before the
arbitrator and after an award has been pronounced, the
rights and liabilities of the parties in respect of the said
claims can be determined only on the basis of the said
award. After an award is pronounced, no action can be
started on the original claim which had been the subject
matter of the reference. The position under the Act is in
no way different from what it was before the Act came into
force. Therefore. the conferment of exclusive jurisdiction
on 'a court under the Arbitration Act does not make 'an
award any less binding than it was under the provisions of
the Second Schedule of the Code of Civil Procedure. The
filing of an unregistered award under s. 49 of the
Registration Act is not prohibited: what is prohibited is
that it cannot be taken into evidence so as to affect
immovable property falling under s. 17 of the Registration
Act. It cannot be said that the registration does not in
any manner add to its efficacy or give it added competence.
If an award affects immovable property order the value of
Rs. 100 its registration does get rid of the disability
created by s. 49 of the Registration Act. The award in
question was not a mere waste paper but had some legal
effect and it plainly purports to affect or affects
property within the meaning of s. 17(1)(b) of the
Registration Act [248 F-H; 249 F, 250 E]
M/s. Uttam Singh Dugal & Co. v. Union of India, C.A.
No. 162 of 1962 dated 11-10-1962, Champalal v. Mst.
Samarath Bai, [1960] 2 S.C.R. 810. 816 and Kashinathsa
Yamosa Kabadi v. Narsingsa Baskarsa Kabadi, [1961] 3 S.C.R.
792, 806, followed.
Sheonarain Lal v. Prabhu Chand, I.L.R. 37 Pat. 252 and
Sardooll Singh v. Hari Singh I.L.R. [1967] 1 Punj. & Har.
622 disapproved.
Chamanlal Girdhat Ghanchi v. Dhayabhai Nathubhai Ghandi
A.I.R. 1938 Bom. 422, M.A. M. Salamullah Khan v.M.
Noorullah Khan, A.I.R. 1939 Nag. 233, Keltaha v.U. Pannawa
A.I.R. 1940 Rang. 228, Nani Bela Saha v. Ram Gopal Saha.
A.I.R. 1945 Cal. 19 and Bhajahari Saha Banikya v. Behary Lal
Basak, 33 Cal. 881, approved.
(Per Hegde. J. concurring): It is one thing to say that
a right is not created. it is an entirely different thing
to. say that the right created can-
245
not be enforced without further steps. An award does create
rights in that property but those rights cannot be enforced
until the award is made a decree of the Court. For the
purpose of s. 17(1)(b) of the Registration Act, all that had
to be seen is whether the award in question purport or
operate to create or declare, assign, limit or extinguish
whether in present or future any right, title or interest
whether vested or contingent of the value of one hundred
rupees and upwards to or in immovable property. Since it
does, it is compulsorily registerable. [252 B-D]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 822 of
1966.
Appeal by special leave from the judgment and order,
dated April 27, 1965 of the Punjab High Court in Civil
Revision No. 841 of 1964.
Sarjoo Prasad, D.N. Mishra and Ravinder Narain, for the
appellants.
A.K. Sen, S.V. Gupte, B.P. Maheshwari and R.K.
Maheshwari, for respondent No. 1
The Judgment of S.M. SIKRI and R.S. BACHAWAT was
delivered by SIKRI, J.K.S. HEGDE, J., delivered a separate
Opinion.
Sikri, J. This appeal by special leave is directed
against the judgment, dated April 27, 1965, of the High
Court of Punjab at Chandigarh (S. B. Capoor, J.) dismissing
Civil Revision No. 841 of 1964. The Civil Revision arose
out of the following facts.
The following pedigree table shows the relationship
between the parties:
Sohan Lal (Decd.) Husband of Gujri
————————————————-
Harbans Lal (D) Sudarshan L(D) husband of Kamla Wati husband of Lachmi Devi (Resp.6)
Satish Rakeah Jatindar Kaka Chand Surinder Kumar
Kumar Kumar Kumar (Minor) Rani (Resp. 6)
App. 1 App. 2 App. 3 App. 4 (Minor)
Smt. Smt. Smt
Nirmal Kanda Lajya
Devi Devi Devi
Reap. 3 Reap.4 Reap.5
On the death of Sohan Lal, Behari Lal was appointed as
arbitrator by Harbans Lal, Surinder Kumar (then a minor
through his mother Smt. Lachmi Devi) and Smt. Gujri,
widow of Sohan Lal, for partition of the joint property.
Behari Lal, by his award dated October 21, 1956, divided the
property into two equal
246
shares, between Harbans Lal and Surinder Kumar. Harbans Lal
and Surinder Kumar signed the award. Harbans Lal died on
May 20, 1960, upon which Surinder Kumar filed a suit for
partition of the properties, the subject-matter of the
award. This suit was dismissed as withdrawn on March 13,
1962. On March 11, 1962, Behari Lal, arbitrator, filed an
application under s. 14 of the Indian Arbitration Act, 1940
(X of 1940)–hereinafter referred to as the Act–for filing
the award in Court and for making the same a rule of the
Court. Surinder Kumar entered appearance and filed
objections under s. 30 of the Act. One of the objections
was that the award dated October 21, 1956, was not
admissible in evidence for want of proper stamp and
registration and could not, ‘therefore, be made a rule of
the Court. On January 31, 1963, the objections were
dismissed by Miss Harmohinder Kaur, Subordinate Judge, First
Class, Ludhiana, as time-barred, but she did not make the
award a rule of the Court as there was a further objection
to the effect that the award not having been executed on a
properly stamped paper and not having been registered,
was not admissible in evidence. This objection was dealt
with by Shri Om Parkash Saini, Subordinate Judge, First
Class, Ludhiana, who, by his order, dated June 5, 1963, held
that the award in question was not admissible in evidence as
it was executed on deficiently stamped paper and was not
registered. He accordingly dismissed the application.
An appeal was taken to the District Judge, and the
Additional District Judge by his order, dated November 23,
1964, upheld the order of the Subordinate Judge. A revision
was then taken to the High Court. Capoor, J., held that the
award actually effected a partition and required
registration under s. 17(1)(b) of the Indian Registration
Act, 1908. The learned Judge dissented from the decision of
& Full Bench of the Patna High Court in Seonarain Lal v.
Prabhu Chand(1), and preferred to follow the view expressed
by the Bombay High Court in Chimanlal Girdhar Ghanchi v.
Dahyabhai Nathubhai Ghandhi,(2) by the Nagpur High Court in
M .A. M. Salamullah Khan v.M. Noorullah Khan,(3) by the
Rangoon High Court in U. Keltaha v.U. Pannawa,(4) and by the
Calcutta High Court in Nani Bela Saha v. Ram Gopal Saha(5).
He accordingly dismissed the revision petition.
The decision of the Patna High Court was, however, later
followed by a Full Bench of the Punjab and Haryana High
Court in Sardool Singh v. Hari Singh(6), judgment, dated
November 8, 1966.
(1) I.L.R. 37 Pat. 252. (2) A.I.R. 1938 Bom. 422.
(3) A.I.R. 1939 Nag. 233, 235. (4) A.I.R. 1940 Rang. 228.
(5) A.I.R. 1945 Cal. 19, 21-22. (6) I.L.R. [1967] 1 Pun.&
Hat. 622.
247
The question which arises before us is whether an award
given under the Act on a private reference requires
registration under s. 17(1) (b) of the Indian Registration
Act, if the award effects partition of immovable property
exceeding the value of Rs. 100. The main reason given by
Sinha, J. speaking for the Patna Full Bench in Seonarain Lal
v. Prabhu Chand(1), for holding that such an award does. not
require registration is that under the scheme of the Act a
private award, unless a decree is passed in terms of the
award, has no legal effect. this, according to him, follows
from the conclusion that once a matter has been referred to
arbitration, it comes within the immediate control of the
Court under the Act, and no other authority has any
jurisdiction to deal with the matter except as provided for
in s. 35 of the Act. He thought that what distinguishes the
provisions in the Arbitration Act from the provisions in the
Second Schedule in the Code of Civil Procedure is that the
Act bars jurisdiction of all Courts to Pronounce upon the
validity, effect or existence of an award or arbitration
agreement except the Court under the Act itself. Sinha, J.,
looking at it from another point. of view, namely, that an
award is only effective when a decree follows the judgment
upon the award, observed that such an award may be covered
by the exception mentioned in section 17(2)(vi) (any decree
or order of a Court) of the Registration Act.
The Punjab Full Bench has followed this reasoning, and
indeed reproduced paras 5 to 15 of the Patna Full Bench
judgment in its own judgment. Mahajan, J., with whom the
two other Judges agreed, observed:
“I am in respectful agreement with the
entire line of-reasoning in the Patna case
barring the underlined observations :–
“… an award is only effective when a
decree follows the judgment on the award such
an award may be covered by the exception
mentioned in section 17(2) (vi) (any decree or
order of a Court) of the Registration Act.”
If these. observations are meant to
convey that award as such is covered by the
exception (vi) of section 17 (2) of the
Registration Act, I am unable to agree. But
the decree that follows the award when it is
made a rule of the Court, no exception can be
taken to the view that such a decree is
covered by the exception.”
The Punjab Full Bench gave two additional
reasons:
“(1) If an award is registered, it is still a
waste paper unless it is made a rule of the
Court. Thus registration does not, in any
manner, add to its efficacy or give it any
added competence. Section 32 of the
(1) I.L.R. 37 Pat.252.
248
Arbitration Act is specific for no right can
be rounded on an award as such after coming
into force of the 1940 Arbitration Act;
(2) It is not disputed and indeed it could
not be that the Court has the power, under
section 16, to remit the award from time to
time. If registration of an award is an
essential pre-requisite before it could be
made a rule of the Court under section 17,
every time an award is remitted and a new
award is made, the new award will require
registration. The result would be that, in
the same controversy, there can be not only
one registration but a number of registrations
regarding the same title, a situation which
is not even envisaged by the Registration
Act.”
It seems to us that the main reason given by the two. Full
Benches for their conclusion is contrary to. what was held
by this Court in its unreported decision in M,Is. Uttam
Singh Dugal & Co. v. The Union of India(1). The facts in
this case, shortly stated, were that M/s. Uttam Singh Dugal
& Co. filed an application under s. 33 of the Act in the
Court of the Subordinate Judge,Hazaribag. The Union of
India, respondent No. 1, called upon respondent No. 2, Col.
S.K. Bose, to adjudicate upon the matter in dispute between
respondent No. 1 and the appellant company.The case of M/s.
Uttam Singh Dugal & Co. was that this purported reference to
respondent No. 2 for adjudication on the matters alleged to
be in dispute between them and respondent No. 1 was not
competent because by an award passed by respondent No. 2 on
April 23, 1952, all the. relevant disputes between them had
been decided. The High Court held inter alia that the first
award did not create any bar against the competence of the
second reference. On appeal this Court after holding that
the application under s. 33 was competent observed as
follows:
“The true legal position in regard to the
effect of an award is not in dispute. It is
well settled that as a general rule, all
claims which are the subject-matter of a
reference to arbitration merge in the award
which is pronounced in the proceedings before
the arbitrator and that after an award has
been pronounced, the rights and liabilities
of the parties in respect of the said claims.
can be determined only on the basis of the
said award. After an award is pronounced, no
action can be started on the original claim
which had been the subject-matter of the
reference. As has been observed by Mookerjee,
J. in the case of Bhajahari Saha Banikya
v.Behary Lal Basak(2) “the award is, in fact,
a final
(1) Civil Appeal No. 162 of 1962-judgment delivered on
October 11, 1962.
(2) 33 Cal. 881 at p. 898.
249
adjudication of a Court of the ‘parties’ own
choice, and until impeached upon sufficient
grounds in an appropriate proceeding, an
award, which is on the fact of it regular, is
conclusive upon the merits of the controversy
submitted, unless possibly the parties
have intended that the award shall not be
final and conclusive… in reality, an award
possesses all the elements of vitality, even
though it has not been formally enforced, and
it may be relied upon in a litigation
between the parties relating to the same
subjectmatter.” This conclusion, according to
the learned Judge, is based upon the
elementary principle that, as between the
parties and their privies, an award is
entitled to that respect which is due to the
judgment of a court of last resort.
Therefore, if the award which has been
pronounced between the parties has, in fact,
or can, in law, be deemed to have dealt with
the present dispute, the second reference
would be incompetent. This position a
lso has
not been and cannot be seriously disputed.”‘
This Court then held on the merits “that the dispute in
regard to overpayments which are sought to be. referred to
the arbitration of respondent No. 2 by the second reference
are not new disputes; they are disputes in regard to. claims
which the Chief Engineer should have made before the
arbitration under the first reference.” This Court
accordingly allowed the appeal and set aside the order
passed by the High Court.
This judgment is binding on us. In our opinion this
judgment lays down that the position under the Act is in no
way different from what it was before the Act came into
force, and that an award has some legal force and is not a
mere waste paper. If the award in question is not a mere
waste paper but has some legal effect it plainly purports to
or affects property within the meaning of s. 17(1)(b) of the
Registration Act.
We may mention that an appeal was filed in this Court
against the decision of the Division Bench of the Patna High
Court, which had referred the case of Sheonarain Lal v.
Prabhu Chand(1) to the Full Bench for opinion on certain
questions and which decided the case in accordance with that
opinion, and the same was dismissed by this Court in
Sheonarain Lal v. Rameshwari Devi(2) in which the judgment
was delivered by the same Bench which decided the case of
M/s. Uttam Singh Dugal v. The Union of India(a). It is true
that this Court in Sheonarain Lal v. Rameshwari Devi(2) did
not expressly rule on the validity
(1) I.L.R. 37 Pat. 252.
(2) Civil appeal No. 296 of 1960–judgment delivered on
December 6, 1962.
(3) Civil Appeal No. 162 of 1962–judgment delivered on
October 11, 1962.
Sup. C1/69–17
250
of the answer given by the Patna Full Bench in Sheonarain
Lal v. Prabhu Chand(1) that such awards did not require
registration, but decided the case on the point whether the
award in dispute in that case in fact purported or operated
to create a right, title or interest of the value of more
than Rs. 100 in immovable properties. But, after holding
that the document did not operate to create or extinguish
any right in immovable property, this Court observed:
“The position would have been otherwise if
the arbitrators had directed by t
he award
itself that tiffs shop would go to Prabhu
Chand without any further document. In that
case the award itself would have created in
Prabhuchand a right to these properties. That
is not, however, the provision in the award.
In the absence of a registered document,
Prabhu Chand would get no title on the award
and Sheonarain’s title would remain in the
shop.”
In this connection we may mention two other decisions of
this Court. In Champalal v. Mst. Samarath Bai(2), Kapur,
1., speaking for the Court, observed as follows:
“The second question that the award
required registration and would not be filed
by the arbitrators before it was registered is
equally without substance. The filing of an
unregistered award under s. 49 of the
Registration Act is not prohibited; what is
prohibited is that it cannot be taken into
evidence so as to affect immovable property
falling under s. 17 of the Act. That the award
required registration was. rightly admitted by
both parties.”
Again in Kashtinathsa Yamosa Kabadi v. Narsingsa
BhctsKarsa Kabadi(3) Shah J., speaking for the Court
observed:
“The records made by the Panchas about the
division of the properties, it is true, were
not stamped nor were they registered. It is
however clear that if the record made by the
Panchas in so far as it deals with immovable
properties is regarded as a non’testamentary
instrument purporting or operating to
create, .declare, assign, limit or extinguish
any right, title or interest in immovable
property, it was compulsorily registerable
under s. 17 of the Registration Act,
and .would not in the absence of registration
be admissible in evidence.”
(1) I.L,R. 37 Pat. 252. (2) [1960] 2 S,C.R 810, 816
(3) [1961] 3 S.C.R. 792, 806.
251
In view of the above decisions it is not necessary to
refute the other reasons given by both the Full Benches, but
out of respect for the learned Judges we will deal with
them. We may mention that no comment was made in these
cases on the provisions of para 7 of Schedule 1 to the Act.
This para provides:
“7. The award shall be final and binding on the parties
and persons claiming under them respectively.”
If the award is final and binding on the parties it can
hardly be said that it is. a waste paper unless. it is made
a rule of the Court.
We are unable to. appreciate why the conferment of
exclusive jurisdiction on a court under the Act makes an
award any the less binding than it was under the provisions
of the Second Schedule of the Code of Civil Procedure. The
Punjab Full Bench held that the registration does not in
any manner add to its efficacy or give it any added
competence. We cannot concur with these observations. If
an award affects immovable property over the value of Rs.
100, its registration does get rid of the disability created
by s. 49 of the Registration Act.
Regarding the difficulty pointed out by the Punjab
Full Bench that there may be many registrations we are not
called upon to decide whether these difficulties would arise
because the language of s. 17 of the Registration Act is
plain. It may be that no such difficulties will arise
because under s. 16(2) of the Act what the arbitrator
submits to the Court is his decision and it may be that the
decision may not be registerable under s. 17 of the
Registration Act. But as we have said before we are not
called upon to decide this point.
In our opinion, Capoor, J., was right in dissenting from
the Patna Full Bench in Sheonarain Lal v. Prabhu Chand(1)
and holding that the award in dispute required registration.
In the result the appeal fails and is. dismissed with
costs.
We may make it clear that we are dealing only with an
award made on a reference by the parties without the
intervention of court.
Hegde, J. I agree. But I would like to add few words.
Arbitration proceedings, broadly speaking may be divided
into two stages. The first stage commences with arbitration
agreement and ends with the making of the award. And the
second stage relates to the enforcement of the award.
Paragraph 7 of the First Schedule to the Arbitration Act
lays down that, “the award shall be final and binding on the
parties and persons claiming under them respectively”.
Therefore it is not possible to agree with the Full Bench
decisions of the Patna High Court (1) I.L.R. 37 Part. 252.
252
and that of the Punjab and Haryana High Court that an award
Which is not made a decree of the Court has no existence in
law. The learned Judges’ who decided those cases appear to
have proceeded on the basis that an award which cannot be
enforced is not a valid award and the same does not create
any rights in the property which is the subject matter of
the award. This in my opinion is not a correct approach.
The award does create rights in that property but those
rights cannot be enforced until the award is made a decree
of the Court. It is one thing to say that a right is not
created, it is an entirely different thing to say that the
right created cannot be enforced without further steps. For
the purpose of s. 17(1)(b) of the Registration Act, all that
we have to see is whether the award in question purport or
operate to create or declare, assign, limit or extinguish
whether in present or future any right, title or interest
whether vested or contingent of the value of one hundred
rupees and upwards to or in immovable property. If it does,
it is compulsorily registerable. In the aforementioned Full
Bench decisions sufficient attention has not been given to
s. 17 of the Registration Act. The focus was entirely on the
provisions of the Arbitration Act and there again on the
enforcement of the award and not in the making of the award.
A document may validly create rights but those rights may
not be enforceable for various reasons. Section 17 does
not concern itself with the enforcement of rights. That
Section is attracted as soon as its requirements are
satisfied There is no gainsaying the fact that the award
with which we are concerned in this case, at any rate,
purported to creat rights in immovable property of the value
of rupees more than one hundred. Hence it is compulsorily
registerable.
Y.P. Appeal dismissed.
253