Satish Kumar & Ors Vs. Surinder
Kumar & Ors  INSC 238 (27 September 1968)
27/09/1968 SIKRI, S.M.
CITATION: 1970 AIR 833 1969 SCR (2) 240
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)
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.
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
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,  2 S.C.R. 810. 816 and
Kashinathsa Yamosa Kabadi v. Narsingsa Baskarsa Kabadi,  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.  1 Punj. & Har. 622
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]
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
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
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
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.
(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.
 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,
"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
(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.
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 subject matter." 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 also 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)  2 S,C.R 810, 816 (3)  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
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
Hegde, J. I agree. But I would like to add
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.