Supreme Court Dismisses Appeal, Holding Unregistered Award Partitioning Immovable Property Inadmissible Under Section 17(1)(b) of Registration Act. An arbitration award that purports to create or declare rights in immovable property over Rs. 100 is compulsorily registrable and cannot be taken into evidence to affect such property unless registered, overruling Patna and Punjab High Courts' contrary views.

Dispute regarding registration and admissibility of an arbitration award partitioning immovable property exceeding Rs. 100.

The appellants sought to have the award made a rule of the court under Section 14 of the Arbitration Act; the respondent objected, contending the award was unregistered and inadmissible.

The arbitrator filed an application under Section 14 of the Indian Arbitration Act, 1940 to make the award a rule of the court; the respondent filed objections under Section 30, claiming the award was inadmissible for want of proper stamp and registration.

The Subordinate Judge first dismissed the objections as time-barred on January 31, 1963, but later on June 5, 1963 held the award inadmissible for deficient stamping and non-registration. The Additional District Judge upheld this decision on November 23, 1964. The High Court of Punjab dismissed the revision petition on April 27, 1965, following the views of the Bombay, Nagpur, Rangoon, and Calcutta High Courts and dissenting from the Patna Full Bench.

Whether an award given under the Indian Arbitration Act, 1940 on a private reference requires registration under Section 17(1)(b) of the Indian Registration Act, 1908 if the award effects partition of immovable property exceeding Rs. 100.

The contention that under the Arbitration Act, 1940, a private award has no legal effect until made a decree of the court, and therefore it does not require registration; registration would add no efficacy and would lead to multiple registrations if the award is remitted. The opposing contention that the award itself purports or operates to create, declare or affect rights in immovable property, falling squarely within Section 17(1)(b) of the Registration Act, and must be registered to be admissible in evidence under Section 49.

An award that effects partition of immovable property exceeding Rs. 100 is a non-testamentary instrument which purports or operates to create, declare, assign, limit or extinguish rights in such property, and therefore falls within the scope of Section 17(1)(b) of the Indian Registration Act, 1908, requiring compulsory registration. The filing of an unregistered award under Section 49 of the Registration Act is not prohibited, but it cannot be taken into evidence to affect such immovable property. The merger of original claims into the award gives it legal effect, and the exclusive jurisdiction of courts under the Arbitration Act does not render the award a nullity until decree; thus, registration is necessary to remove the evidentiary disability.

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. 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. 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.

On October 21, 1956, arbitrator Behari Lal delivered an award partitioning the joint immovable property of the parties. Harbans Lal died on May 20, 1960. Surinder Kumar filed a partition suit, which was dismissed as withdrawn on March 13, 1962. On March 11, 1962, Behari Lal filed an application under Section 14 of the Arbitration Act to make the award a rule of the court. Surinder Kumar filed objections under Section 30 on grounds of deficient stamp and non-registration. The Subordinate Judge dismissed the objections as time-barred on January 31, 1963. However, on June 5, 1963, another Subordinate Judge held the award inadmissible due to deficient stamp and want of registration, and dismissed the application. An appeal was dismissed by the Additional District Judge on November 23, 1964. The High Court of Punjab dismissed the revision petition on April 27, 1965. The Supreme Court granted special leave to appeal.

• Indian Arbitration Act, 1940: 14, 30, 32, 35
• Indian Registration Act, 1908: 17(1)(b), 49