· …. THEMI P. SIDHWA & ORS. c v. SHIB BANERJEE~ SONS PVT. LTD. &.ANR. September 3, 1974 [P: ]AGANMOHAN REDDY, M. H. BEG AND A. A~AGIRISWAMI, JJ.] 111dia11 Registration Act, 1908….,…S. 17( l)(b) a11d· 2-Award of Arbitrator relating to partition. of imm?vable
property of val11e exceeding Rs. 100-lf r<•q11.ires registration. Various disputes between the parties were referred to a sole arbitratc.r. In an .applictaion under s. 1 S l C.P .C., the point was raised before the High Court that as the award directed partition of immovable property and the va:'lle of the immovable property was mo.-e than one lakh. rupees it required registration under s. 17(1)(b) of the Indian Registration Act, 1908 and as it had not been registered, it was not admissible in evidence and· could not be enforced and 9011ld not confer any rights. A single judge of the High Court held that since the 11ward had not been registered as required by section 17 (I) (b) of the
Registration . Act It could not be made a rule of the court under s. 17 of the Arbitration Act. Allowina the appeal, HbLD: .The award falls under s. 17(2)(v) .of the Registration Act ani\ Is, therefore, not ruisterable.
The High Court has- proceeded on the basis that the award related to· partition of immovable property of the value exceeding Rs. 100/- and, therefore, came within the ambit of s. 17(1) (b) of the lnJian Registration Act. No doubt it did; but the High Court did not bestow attention on the words of that section and see whether it operated to create rights in the immovable property or whether it 111erely created a right to obtain another document, which will, when llxecuted create any such right. The uward itself did not purport or operate to create, declare, anlan, · limit or' ~tinsuish, whether In presentl or in future any right, title or interest whether vested of contigent of the· value of Rs. lOQ/. and UP' . wards in respct' of immoyable property as contemplated under s. 17(1 )(b) of the Registration Act.
It merely created a right to obtain another document which would when executed, create declare, assign, limit or extinauiah any such iaht, title or interest. (2E; 48) .F . Ra/an9am
Ayyar v. Ra/anRam A.v.var, SO I.A. 134, Sht.,naraln Lal v. Rameslivlarl Dtvl, C.A. No. 296 of 1960 decided on: 6th December 1952, Sa1l.1/1 Ktimtir v. ,:Surlndtr Kumar, [1969) 2 S.C.R. 244
and Ratan Lal Sliarma v. Purslwllaril Harli, C.A. No. 1625 of 1967 decided on 11th 1anuary, 1974. referred to. C1VlL APPELLATE JURISDICTION : avil Appeal No. 1350 of 1968. Appeal by special leave from the· judgment and order dated January 17, 1968 of the Delhi High Court in Suit No. 588 of 1966. S. T. Desai, P. C. Bhartarl and K. /. John, for the Appellants. Brljb~ Klshore, V. N. Ganpule and P. C. Kapur, for respondent . No. 1.
ll The fudgment of the Court was delivered by · ALAGlRISWAMI, J .-The question for ·decision is whether the award made by· th'l arbitrator in this case is inadmissible in evidence and 2-L25l~u:>Cl/75
therefore no decree can. be passed on tJ?-e basis of that award as held by the Delhi High Court. The short facts necessary for decision on this case are these : By an agr,eement dated 25th April, 1961 various disputes and matters in difference between th~ parties were referred to the sole arbi· tration of Mr .. B. K. Daphtary. The arbitrator made his award on 25th April, 1962. It is not necessary to refer to the various stages the matter went through except that the case came to be finally heard by the Delhi High Court. Before that Court by an application filed under section 151 C.P.C. a qm:stion was allowed to be raised that as "the award directs partition of immovable property and the value of this immovable property is more than one lakh it theref.ore requires regis• tration. under s. 17(1)(b) of the Registration Actandthesameis not .admissible in evidence. and cannot be enforced or confer any rights." The learned Single Judge of the High Court who heard the matter held that the award, not having been registered _as required by 1'· 17 ( 1) (b) of the Indian Registration Act, cannot be made a rule -of the Court under s. 17 of the Arbitration Act. The learned Judge .also held that he would have had no hesitation to follow the cotirse prescribed in s. 38 of the Stamp Act and receive the stamp duty and penalty but for his decision that the document requires registration. The learned Judge: procetlded on the basis that the award
relates to partition pf immovable property of the value exceeding rupees one hundred and therefore comes within the ambit of s. 17 ( 1) (b) of the Indian Registration Act, 1908. No doubt it does but the learned Judge did not bestow his attention on the words of that section and see whether it operates to create rights in immovable property or whether it merely ere-ates a right to obtain another docu- ment which· will, executed, create any such right. • The learned Judge purported to follow the decision of the Andhra Pradesh High Court in M. Venkataratnam & Anr. v. M. Gheelamayya & Anr.(I) The award insofar as it is relevant is in the following terms : "1. I hold an award that the said Tehmi Pheroze Sidhwa,
Almitra Pheroze Sidhwa and Mani Rustom Sidhwa paid the total contribution of Rs. 32,500.00 (Rupees thirty two thousand five hundred) as their one fourth share in the cost of the land at Najafgarh Road, Delhi being plot No. 71/5 of the Industrial Area. Scheme of the Delhi Improvement Trust admeasuring about 7246,67 square yards and the factory
:and other buildings and compound wall constructed thereon a11d occupied by Delhi Floorings Private Ltd. that the said Tehmi Phero7.e Siclhwa, Almitra Pheroze Sidhwa and Mani Rustom Sidhwa ar1~ between them entitled to a one fourth
share or interest in the said land and buildings and in the renis and profits 1hereof; that as between themselves the (1) A. I. R. 1967 A. l'' 257. c p· .1 A c T. P, SIDWA v. SHIB BANERJEE (Alagiriswami, J.)
shares or interest of the said Tehmi Pheroze Sidhwa, Altnitra Pheroze Sidhwa and Mani Rustom Sidhwa are as follows :- Tehmi Pheroze Sidhwa 3/32 share Altnitra Pheroze Sidhwa 3/32 share
)-.In the whoJe Mani Rustom Sidhwa 2/32 share j property .. 2,. A lease of the said property has been granted by the Delhi lmpl'oveme11t Trust to Shib Banerjee and Sons Private Ltd. and the said property stands in the name of Shib
Banerjee & Sons Private Ltd. I hold and award that Shib Banerjee & Sons Private .Ltd. hold the said property upon trust as to one fourth thereof for the said Tehmi Pheroze Sidhwa, Almitra Pheroze Sidhwa, and Mani Rustom Sid!iwa
in the share as above mentioned and that the said· Tehmi Pheroze Sidhwii, Almitra Pheroze Sidhwa and Mani Rustom Sidhwa are entitled to a one fourth share in the rent and profits of the said property from 1st Jan.uary 1960.
3. I award and direct that Shib Banerjee and Sons. Private Ltd. do pay to the s~id Tehmi Pheroze Sidhwa, Almitra Pheroze Sidhwa and Mani Rustom Sidhwa the one fourth share pf the rents and profits of the said property at the ra~ of Rs. 93.75 nP per month to Tehmi Pheroze
Sidhwa. Rs. 93.75 nP per month to Almitra Pheroze Sidhwa. Rs. 62.50 nP per month to Mani Rustom Sidhwa. ffom 1st January 1960 to 30th April 1962 (both days ini:lusive) and thereafter do pay to them one fourth share of the rents and profits of the said property in the aforesaid ,shares.
4. I award and direct that Shib Banerjee and Sons Private Ltd. do forth with execute such documents as may be necessary for declaring the one fourth share of the said Tehmi Pberoze Sidhwa, Almitra Pheroze Sidhwa and Mani
Rustom Sidhwa in the said property .and do execute as soon as possible such documents as may be necessary for transfer- ring the, said property and the lease from the Delhi Improve- ment Trust (subject to the existing tenancy of Delhi Floor· ings Private Ltd.) to. the joint names of themselves and the said . Tehmi Pher02le Sidhwa, Almitra Pheroze Sidhwa and
Mani RW!tom Sidhwa as tenants in common in the follow· ing shares:- Shib Banerjee and Sons Private Ltd. Tehmi Pheroze Sidhwa. Almitta Pberoze Sidhwa. Mani Rustom Sidhwa. 24/32 share.
3/32 share. 3/32 share. 2/32 share. The out of p~ket ~nses of such documents (includ· ing amount payable for fee or costs to the Delhi Improve- ment Trust, Stamp Duty, registration charges and expenses
[197512 s.c . .&. for plans) shall be borne by the aforesaid parties in propor- tion to their rc:spective shares in the said property. The professional charges of the lawyers of the parties in con- nection with such. documents shall be borne by the respec- tive parties."
Xt would be noticed that the award itself does not purport or operate to create, declare, assign, limit or extinguish, whether in present or in future any right, title or interest, whether vested or continge.nt, of the value of .one hund,red rupees and upwards, in respect of .the immovable prop~uy, as contemplated under s: 17(l)(b) of the Registration Act. It merely creates a right to qbtain another docu- ment which will, when executed; create, declare, assign, limit or extinguish any such right, title or interest. The award directs Shib B.anerjee and Sons Private J.td. to execute such documents as may be necessary for declaring the one fourth share of the appellants in the said property and also to execute such documents as may be necessary for transferring the said property and the lease from the Delhi Improvement Trust to the joint names of themselves and the appellants. It, therefore, squarely falls under s.
17(2) (v) of the Registratiop Act. The question is amply covered by authority. In Rajangam Ayyar v.Rajangam Ayyar(') bv a document (AY) the parties agreed to divide their properties according to certain specified . shares. It then went on to pr<>vide :
"A partition deed in terms hereof shall be executed and registered in the office of the Sub-Registrar of ti)is place, as l!lso at Tinnevclly, es early as possible; that until then this shall itself' be in force."
The Privy Council observed : "Exhibit A Y is not a document by itself creating, assign- ing, limiting, or extinguishing any right or interest in immov · able property; it merely creates a· right to obtain another document which will, when executed, create a right in the
person claiming the relief, and on that ground their Lord- ships think exhibit A Y did not require registration, and accordingly is admissible in evidence, .so far as it goes." Jn Sheonaraiin Lal v. Rameshwari Devi(2) a Bench of five Jud~es Of this Court had to detal with a document the filth clause of which read:
"S.hri Sheo Narain Lal and his heirs should execute as early as possible a registered document in respect of the shop let out on rent to Beli Sao Sukhdeo Prasad, in favour of Shri Prabhu C'hand for which Shri Prabhu Chand will
have to pay nothing as consideration. He will pay only costs of sta1np etc." . —·· ·"–·-·- : (I) 50 I. A: 134. (2) C. A. No. 296of1960 de:lded on 6th Docembor 1952. c c r. P. SIDWA- v. SHIB BANERJEE (Alagirisw~i, /.)
This Court observed : "Does this clause purport or operate to create, ·declare, assign, limit or extinguish any right, title or interest in ·immovable properties ? We are clearly of opinion that it does not. The award merely provides that some right in the shop should be created in the future by means of a document to
be executed by Sheonarain Lal and his heirs. That document . when executed would certainly opera~ to . create a right in favour of Prabhu. Chand in immovable properties and exting- uish the right of Sheonarain Lal and his hei,rs in the same properties. That is why the arbitrators mention that that
document should be registered, as admittedly, the value of that property would be more tnan Rs. 100.00. It is difficult · to see however how the fact that such a document th~t might be executed in consequence of the directions in the award, would operate to create or extinguish a right .in immovable ·properties, justifies the court to s•y that the award itself p~
or operates to.create or extinguish such a right .. The position would have been ~ if the arbitrators had directed by the award itself that this shop would go to Prabhu Chand without any further document. "In that case
the award itseli 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 doc'1Illent, Prabhu Chand would ~t. no titl.e Oil the award and Sheonarain's
title wonld remain in the shop. It is clear therefore that the award does not itself czeate or extinguish any right, title or interest in the immovable properties. It may be said that it creates a_ right tO obtain. another document which will,· when executed, ·create or extinguish such right in immovable
properties and so is a docunient falling within cl. S of s. 17 · . .(2) of the Registration Act. The award. therefore does not reqUire registration in law. We find it unnecessary to con• sider the further question which the High court has con·
sidered on the assumJ>!ion wrongly made that the award decided question8 of title to immovable properties." In Satish Kumar v. Surinder Kumar(') the concurring judgment of Hegde, J, brings out the matter very clearly. He observed: ''For the purpose of s. 17 ( 1) (b) of the Registration
Act, all that we liave to see is whether the award in ques· tion 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 registrable. . . There is no gain· saying the fact that the award with which we are concerned in this case, at ·any rate, purporter to creates rights in (1) ti 9691] 2 S. C. R. 244.
[1975) 2 s.c.n. immovable property of the value of rupees more than og.e hundred. Hence it is compulsorily registrable." The other two learned Judges quoted the observations in Sheonarain Lal' s ca~e that :
"The positi_on would have been otherwise if the arbitra· tors had directed by the award itself that this shop would go to Prabhu Chand wihout any other document. In that case the award itself would have created in Prabhuchand a right to these properties."
Thus this decision does not in any way lay down any proposition contrary to the decisions which we have so far referred to. We may finally refer to the latest decision of this Court, to which one of us was i party, in Ratan Lal Sharma v. Purshottam Harit( 1). The relevant clause read as follows :
"The factory and all assets and properties of New Bengal Engineering Works are exclusively allotted to Dr. Rattan Lal Sharma, who is absolutely entitled to the same. He will pay all liabilities ~f the factory."
This Court observed : "It expressly makes an exclusive allotment of the partner· ship assets including the factory and liabilities to the appel· lant. It goes further and makes him "absolutely entitled to the same" …. So in express words it purports to create
rights in immovable property worth above Rs. 100.00 in favour of the appellant. It would accordingly require regis· !ration under s. 17, Registration Act. The Full Bench decision of the Andhra Pradesh High Court relied upon by the learned Judge decided that an award that . created a charge must be registered. That is undoubtedly correct. The question regarding the application of section 17(2) (v) of the Registration Act however did not aris~~ there.
The learned Judge does not refer to any of the decisions which we have referred to, including those of this Court because he pro· ceeded to decide the matter on the assumption that the award itself created a right in immovable property o_f the value of over one hundred rupees. We are clearly of opinion that the award in this case falls under s. 17 (2) (v) and is, therefore, not registrable. As r~gards the question of stamp duty, we do not propose to ex· press any opinion as it would appear that the learned Judge of the High Court would himself have been ready to receive the stamp duty and penalty if he had held that the agreement was not compulsorily registrable.
The appeal is allowed and the first respondent should pay the ap- pellants' costs. P.B.R. Appeal allowed. (l) C. A. 1625 of 1967 decided on 11-1-1974. c