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Suit No. 186 of 1963, decided on 6th January 1966.
Ss. 14, 17 & 30‑Ae‑ard based on compromise arrived at between parties‑Valid.
Where grievance was made that the arbitrator himself did not give an award but by his award gave effect to what was agreed upon between the parties themselves and so it was bad:
Hell, an award which embodies an agreement reached between the parties after the reference had been made cannot be challenged. There cannot be a better end to an arbitration than to get the parties to reach an agreement upon the matter of disputes and after such an agreement is reached to give effect to it in the award. Indeed if such an agreement was not given effect to that might well constitute a valid point of grievance against the award.
Kosaraju Thirupathirdyudu and others v. Kosaraju Venkarasubhayya and others A I R 1951 Mad .678 and Mrs. Keays Burne v. M. Obaidullah Khan P L D 1959 Lah. 146
Ss 30, 28 & 23‑Registrar alone and not Sub‑Registrar competent under S. 30(2) to register document regarding property situate in any part of Pakistan -Registrar can receive document for registration under S. 30(2) only within time limit provided under S. 23 ‑ Sub‑Registrar registering document affecting immovable properties outside his territorial jurisdiction‑Defect cannot be said to be of procedural nature only which could be rectified later by Registrar.
Chhati Lal v. Ramchariter Sahu A I R 1941 Pat. 215 ref.
S. 17 read with Registration Act (XVI of 1508), S. 49 [as amended by Registration (Amendment) Ordinance (XLV of 1962)] Unregistered award affecting immovable property of value more than Rs. 100 ‑ Court not precluded from dealing with such award under S. 17, Arbitration Act, 1940 and making it a rule of Court.
One of the effects of the amendment made by the Registration (Amendment) Ordinance, 1962 is that now under section 49 of the Registration Act, 1908 a document which is compulsorily registerable under section 17 of that Act is no longer inadmissible. An unregistered award affecting immovable property of value more than Rs. 100 is now, therefore, admissible in evidence. That being so, once it is filed in Court it becomes the duty of the Court to deal with it under the provisions of the Arbitration Act, 1940. An award can operate to create, declare etc., any tight, title or interest to or in immovable property only when it is made the rule of the Court. It may well be that after an award has been made on a private reference the parties may by asp agreement accept it and if it affects immovable property have it registered and act upon it, but that would not be by operation of the award itself. It would be the result of agreement between the parties who decided to act upon it. Such a result can be achieved even without an award. For example, there are frequently cages of private partition of immovable property by consent of parties. The award, therefore, does not become effective and operate in the manner provided by the section until it has been filed in Court and made rule‑of the Court.
Jitendra Nath De v. Nagendra Nath De A I R 1934 Cal. 815; Nani Bala Saha v. Ram Gopal Saha A I R 1945 Cal. 19; Hassan and v. Jodhomal A I R 1936 Sind 79 Bindesri Naik v. Ganga Saran Sahu 20 All. 171; Muhammad Azizullah Khan v. Muhammad Noorulloh Khan A I R 1939 Nag. 233; Sid Kishori v. Bhairvi Nandan A I R 1953 Pat. 42; Muhammad Niwaz Khan 18 Cal. 414 (P C) and Seonarain v. Prabhuchand A I R 1958 Pat. 252 ref.
H. B. Tayabji for Plaintiff.
A. K. Brohi for Defendant.
Dates of hearing: 14th, 28th May; 2nd June; 10th, 20th and 27th September 1965.
These are proceedings under the Arbitration Act and arise in the following circumstances: By an agreement in writing dated 23rd April 1963 the parties to these proceedings referred their disputes to the sole arbitration of one Haji Fazal Karim, a highly respected member of their community, who made an award on 1st June 1963. The award included immovable property, all of which was situated in Karachi. It was, however, presented for registration before the Sub‑Registrar, Chakwal who registered it on 13th August 1963. The award was then sent to this Court by post by the said arbitrator Haji Fatal Karim accompanied by an application under section 14(2) of the Arbitration Act on 18th November 1963 and it was received in this Court on 20th November 1963 whereupon it was registered as a suit and notices were issued to the parties. It may now be mentioned that the parties to the arbitration agreement were Haji Fatehuddin, son of Ghulam Nabi and his three sons Khwaja Muhammad Yusuf, Khwaja Abdul Rashid and Khwaja Muhammad Hanif. In the award made by the Arbitrator Haji Fatehuddin and his two sons Khwaja Abdur Rashid and Khwaja Muhammad Hanif have been shown on one side and Khwaja Muhammad Yusuf on the other. It is for this reason that in the proceedings in Court which was registered as a suit, Khwaja Yusuf has been shown as the plaintiff and the other three as the defendants. The arbitrator on having entered upon the reference was able to persuade the parties to get together and thrash out their differences, but if they were not able to reach an agreement be would make his award. As a result of this the parties were able to reach an agreement on all points and this was incorporated in the award which was accepted by all the 4 persons and who appended their signature to the award in token of their acceptance.
2. After the award was filed in Court by the arbitrator and notices were issued to the parties an application under section 30, Arbitration Act, was filed by the first two defendants Abdul Rashid and Muhammad Hanif objecting to the award and praying that it may be set aside. An affidavit as required by the rules was filed in support of the application but this was sworn by Abdul Rashid alone. Fatehuddin, the father had not signed the application under section 30, Arbitration Act, but he gave a Vakalatnama in favour of Mr. Iqbal Ahmad, Advocate who had filed the objections on behalf of all the three defendants including Fatehuddin.
3. In this award Khwaja Muhammad Yusuf has been described as the party of the second part and his father and his two brothers have been described as party of the first part. The distribution in the award of the various properties and business concerns has been made on this basis that certain properties and business concerns are given exclusively to Khwaja Muhammad Yusuf and certain others to Fatehuddin and his other two sons as representing the first party. The award runs into 15 paragraphs, whereby all the joint immovable properties have been assigned exclusively either to one party or the other, the various business run under different names are also similarly assigned, the appropriation of rents and profits are provided for and 'direction has been given as to the payment of certain taxes and for sharing in defined proportions of certain liquid assets. The parties have appended their respective signatures to the award in the body of it wherever a certain property and business concern is allotted to one party. Again at the end and after the arbitrator had signed the award each of the parties have signed under the endorsement which reads:
"Read over and understood and the decision is accepted."
4. In the application under section 30 of the Arbitration Act, a number of objections has been raised but at the hearing before me Mr. Brobi, the learned counsel for the defendants aforesaid pressed the following four points only:
(1) The reference was substantially between Khwaja Abdul Rashid and Khwaja Muhammad Hanif on the one band and Khwaja Muhammad Yusuf on the other and that Fatehuddin was a party only for the purposes of the limited question relating to the accounts. For that reason, it was urged that the Arbitrator had gone beyond the terms of reference in making an award in respect of the immovable properties. which Fatehuddin had also a share.
(2) That according to the reference the accounts had to be taken only up to April 1961 but the arbitrator has extended it to May 1963.
(3) That the purpose of the arbitration agreement was to have the matter arbitrated by the appointed arbitrator but this did not take place and instead the arbitrator only gave effect to what was alleged to be an agreement reached between the parties in respect of all the disputes.
(4) That all the immovable properties as well as the movable properties being in Karachi the registration of the award at Chakwal was bad and in so far as the award also affected immovable property and was not properly registered it would not be made the basis of a rule of the Court.
5. It is the fourth point which was mainly pressed by Mr. Brohi though in fairness to him it may b: added that he did not abandon the first three points. With regard to the first contention it was pointed out by Mr. Brohi, that in the body of the arbitration agreement the name of Haji Fatehuddin appears only in connection with money dues from one party to the other and, therefore, the arbitrator could not dial with any property in which Fatehuddin had a share. This contention is without any force, because in the earlier part of the arbitration agreement the question of partition of properties is expressly mentioned and which was to be decided by the arbitrator. That being so, if the properties were joint and Fatehuddin had also a share in them the partition could not have been complete without joining Fatehuddin in it. It was for this reason that the arbitration agreement was, taken to Fatehuddin who appended his signature to it and added an endorsement that the was in complete agreement with this writing. I am, therefore, of the opinion that it was clearly the intention of the parties that the share of Fatehuddin in the immovable property must also be the subject‑matter of Arbitration. This conclusion is fully borne out by the fact that when the award was made dividing the properties, Fatehuddin accepted it and appended his signature in token of its acceptance. I, therefore, repel the first contention. I may add that the case set up was that Fatehuddin had signed the arbitration under the impression that this was sent to him merely by way of information. I had, therefore, pointed out in the order sheet of, 14‑5‑65 that if this contention was to be pressed Fatehuddin will have to be put in the witness box and I give lima for it but he was not produced and as I have indicated earlier' neither this case nor the case of undue influence was pressed at the healing before me.
6. The second contention that the account had to be taken only up to April 1961 whereas the arbitrator had extended it to May 1963 is also without any force. Reading the arbitration agreement as a whole it is abundantly clear that the parties namely Khwaja Muhammad Yusuf on the one hand and the other two brothers and the father on the other had intended to separate completely from each other and have the division of all properties and business finally effected. It appears that certain businesses were done upto the end of April 1961 jointly and thereafter it was discontinued. It was for this reason that this date was mentioned. However, it is clear from the award and from the affidavits that when the matter went before the arbitrator the parties reached an agreement on all matters and considering the terms of the agreement it was not necessary to have any further accounting to be done and the reference to dates beyond the end of April 1961 as contained in paras. 4, 7, 9, 10 and 11 of the award does not deal with any accounting but only fixes a point of time with reference to matters deal with in these paragraphs. I, therefore, hold that the award does not go beyond the terms of the reference.
7. In the third point a grievance is made of the fact that the arbitrator himself did not give as award but gave effect to what was agreed upon between the parties themselves. That such an agreement was reached was not contested before me at the hearing though a number of allegations had been made in the application under section 30 of the Arbitration Act. But even if those allegations bad been pressed I would have had no hesitation in repelling them because not only that the defendants signed the award, the whole of which was written in Urdu, in the body of it but also made an endorsement at the end that they bad accepted it and until the matter came to Court they did not at any time allege that the agreement upon which the award was based had been brought about by undue influence or upon any misrepresentation. I have, therefore, no hesitation in holding that the terms in which the award was made had been fully agreed to between the parties with their free consent. Such an agreement having been reached the arbitrator had no difficulty in embodying it in the award. It may be mentioned that the parties belong to Chakwal and so does the arbitrator. There had been dispute between the brothers for sometime and they were anxious that this dispute must come to an end. It was then that Haji Fazal Karim happened to come to Karachi on his way to Hajj. This gentleman was and continues to be looked upon by the parties with great reverence due to hi: piety and goodness. It was for this reason that they approached him and requested him to decide all their disputes. He promised that he will do so on his return from Hajj. When he did return the parties went to him again and there is no doubt that his persuasive influence brought the parties nearer to each other and they agreed to decide all their disputes. When such an agreement was reached and embodied in the award, can it be seriously urged that the award is bad because the arbitrator was able to persuade them to reach an agreement and gave effect to what the agreement was. I do not think there can be a better end to an arbitration than to get the parties to reach an agreement upon matters of disputes and after such an agreement is reached to give effect to it in the award. Indeed, if, such an agreement was not given, effect to that might well, constitute a valid point of grievance against the award. Such a grievance was recognised by a Division Bench of the Madras High Court in the case of Kosaraju Thirupatharayudu and others v. Kosaraju Venkarasubhayya and others (A I R 1951 Mad. 678), that where by an agreement one of the points in dispute between the parties and which had been referred to the arbitrator for settlement has been settled among themselves and the arbitrator is requested to take note of that agreement and incorporate that agreement in the award, the arbitrator would be guilty of misconduct if he fails to incorporate such an agreement solution of the points in dispute between the parties. In a case of our own Court Waheeduddin Ahmad, J., after referring to a large number of authorities reached the conclusion that if the parties have compromised ‑the matter the arbitrators are entitled to incorporate it in the award and to make it the basis of the award. Such art award was held to be a valid document Mrs. Krays Burne v. M. Obaidullah Khan (P L D 1959 Lah. 146). I am in respectful agreement with the above view and hold that the present award, which embodies the agreement reached between the parties after the reference had been made, is not open to question on that ground.
8. That brings me to the fourth point which is in two parts. The first part relates to the question whether the registration of the award in this case can be held to be a valid one. The second part of that question is whether the award cannot be made the rule of the Court for want of registration. With regard to the first part‑of the question the facts are these: The award was made at Karachi on Ist June 1963. Haji Fazal Karim thereafter returned to his place in Chakwal and it appears that he was not keeping good health. The award was then registered at Chakwal by the Sub‑Registrar an 13th August 1963. No part of the immovable properties which is the subject‑matter of the award is situated within the jurisdiction of the Sub‑Registrar, Chakwal. So, when this cast first came up for hearing Mr. Brohi for the defendants had contended that in order to attract the provision of section 30(2) of the Registration Act the document had to be registered by the Registrar and not by the Sub‑Registrar. Section 30 as a whole may be reproduced:
"30. (1) Any Registrar may in his discretion receive and register any document which might be registered by any Sub- Registrar Subordinate to him.
(2) Notwithstanding anything contained in section 28 any Registrar may receive and‑ register arty document without regard to the situation in any part of Pakistan of the property to which the document relates if he is satisfied that there is sufficient cause for doing so."
Section 28 which is referred to in, clause (2) of this section provides that every document which is compulsorily registerable in so far as it effects immovable property shall be presented for registration in the office of a Sub‑Registrar within whose sub -district the whole or some portion of the property to which such document relates, is situate. Now, this document was presented at Chakwal but no portion of the property to which this document related was situated in any part of the district in Chakwal. However, the amended clause (2) of section 30 empowers the Registrar to receive and register any document notwithstanding anything contained in section 28 if he was satisfied that there was sufficient cause for doing so. It appears to me to be plain that the amended clause (2) of section 30 provides 'an exception to the general rule contained in section 28, but in order that this exception can be put into effect there are two conditions; firstly, that the jurisdiction to apply the exception is in the Registrar and not the Sub‑Registrar and secondly, it is the Registrar who is to be satisfied that there is sufficient cause for a departure
from the general rule contained in section 28. However, after the hearing of the case was adjourned a certified copy of the award was presented to the Joint Registrar, Jhelum by the arbitrator on 9‑7‑65 and the said Registrar registered the document on 15‑7‑65. This document was presented by Mr. Tayabji, the learned counsel for the plaintiff, on 10th September 1965 along with an application in which it was stated that in view of the discussion which took place in Court during the hearing ten application was, ex majori cautela, made to the Registrar at Jhelum with a fully stamped, certined and verified copy of the award which was registered by the Joint Registrar, Jhelum at No. 61 in Book 4, Volume VI at page 72/79. The argument of Mr. Tayabji was that the first registration itself was valid but in any case if there was any defect it was removed by the registration of tae award by the Joint Registrar, Jhelum. Apart from other difficulties in the way of accepting the second registration as being valid it seems to me that the presentation of the document before the Joint Registrar was beyond time having regard to the provision of section 23 of the Registration Act. that section requires the presentation of the document to the proper officer within four months from the date of its execution. In my opinion, if section 30(2) was to be attracted the document had to be presented to the Registrar or the Joint Registrar as in this case (the Joint Registrar has the same power as the Registrar) within 4 months of its execution. This was not done in the present case, in which the presentation to the Joint Registrar was about 2 years after the date of execution. Section 30(1) empowers the Registrar in his discretion to receive and register any document which might be registered by any Sub‑Registrar subordinates to him. But he can receive this within the time limit provided under section 23. I do not think that the presentation to the Sub‑Registrar can be termed merely as a defect of procedure which could be rectified later by the Registrar.
9. The next question is whether this is a case of re‑registra tion. In the application which was presented by Mr. Tayabji it was stated that this document had been re‑registered. Now, re -registration is provided for by section 23‑A of the Registration Act and a plain reading of this section makes it clear that the present case cannot be said to be covered by this section. I cannot, therefore, accept the second registered upon the ground that this was a valid re‑registration of the said document. But even if it was a case of re‑registration according to section 23‑A, it would still come within the mischief of section 23. Chhati Lal v. Ramchariter Sahu (A I R 1941 Pat. 215). In view of these conclusions I shall now proceed upon the assumption that the award has not been registered. The question which then calls for determination is whether this Court is precluded from entertaining this award and dealing with it under section 17 of the Arbitration Act upon the ground that it is not a registered document though it relates to immovable property of the value of more than Rs. 100. That brings me to the second part of the fourth point which was urged by Mr. Brohi.
10. The question raised is of considerable importance and has been the subject of judicial pronouncement on a number of occasions. Some of which I shall presently note. But before I do that it would be necessary to refer to the relevant provisions of the Registration Act and the material amendments. Section 17(1) enumerates the documents of which registration is compulsory. Sub‑clause (b) thereof is material. It may be quoted:
"(b) other non‑testamentary instruments which purports or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title 8r interest, whether vested or contingent of the value of one hundred rupees and upwards, to or in immovable property."
Clause (2) of section 17 contains the exemption, of which sin‑clause (vi), as it stands after the amendment of 1929, reads:
"(vi) any decree or order of a Court except a decree or order expressed to be made on a compromise and comprising immovable property other than that which is the subject matter of the suit or proceeding."
Before the said amendment which was introduced by section 10 of the Transfer of Property (Amendment) Supplementary Act, 1929, the aforesaid clause (vi) had provided that nothing in clauses (b) and (c) of subsection (I) applies to any decree or order of a Court and any award. The effect of non‑registration of documents required to be registered is contained in section 49 which. as it stood before the amendment made to it by Registration (Amendment) Ordinance (XLV of 1962), read as follows:
"49. No document required by section 17 or by any provision of the Transfer of Property Act, 1582 to be registered shall‑
(a) affect any immovable property comprised therein, or
(b) confer any power to adopt, or
(c) be received as evidence of any transaction affecting such property or conferring such power,
unless it has been registered:
Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882, to be registered may be received as evidence of a contract in a suit for specific performance under Chapter 11 of the Specific Relief Act, 1877, or as evidence of part performance of a contract for the purpose of section 53‑A of the Transfer of Property Act, 1882, or as evidence of any Collateral transaction not requited to be effected by registered instrument."
However, by the said amending Ordinance this section was recast and it now reads‑.‑‑
"49. No document required to be registered under this Act or under any earlier law providing for or relating to registration of document shall‑
(a) operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title, or interest, whether vested or contingent, to or in immovable property, or
(b) confer any power to adopt,
unless it has been registered."
It may be mentioned here that the award in this case was made in 1963 and it is the amended section 49 which would apply in the present case.
11. The cases to which I am now going to refer are all Indian decisions and, of course, they do not take into note the effect of the amendment to section 49. I may also state that before the enactment of the Arbitration Act of 1940 the matter was governed by the Second Schedule to the Civil Procedure Code. It is pertinent to refer to this fact because in some of the decisions the view has been taken that after the coming into force of the Arbitration Act of 1940 the position with regard to the arbitration awards has been materially changed.
12. I shall first deal with the question without reference to the amendment to section 49 as shown above. The view taken in a number of cases is that the elect of the amendment to sub‑clause (vi) of subsection (2) of section 17 of the Registration Act is that an award which embodies a transaction under section 17(1)(6) is no longer exempt from registration and that such an award must be registered otherwise it is invalid. A distinction, however, has been made in cases of an award made upon a reference by the Court under the former provision contained in para. 17 of the Second Schedule to the C. P. Code which is analogous to section 20 of the Arbitration Act and also where a reference has been made in a pending suit. It has been held that an award upon such reference in either of the two instances would be a part of the judicial proceedings and the exemption contained even in the amended sub‑clause (vi) of. sub section (2) of section 17 would be applicable. Let me now proceed to examine some of the decided cases. In the case of Jitendra Nath De v. Nagendra Nath De (A I R 1934 Cal. 815), a Division Bench of the Calcutta High Court brought out the distinction between an award made upon the reference by the Court and a private award It was contended before their Lordships that the effect of the 1929 amendment to section 17(2)(vi) whereby the words "and any award" had been deleted was not to make the registration of private awards compulsory but to place them on the same footing as awards of arbitrators made through the intervention of Courts because in neither case the award would be operative without a decree passed on it. In repelling this contention their Lordships held:
"The answer to this argument is that whereas an award made by arbitrators under orders of the Court his no force until a decree is passed on it a private award, if it is valid, is operative even though neither party has sought to enforce it by a regular suit. A private award therefore falls within the class of documents specified in section 17(1)(6), Registration Act, whereas an award of the other class does not, by the amendment the exception having been removed the award in the present case, satisfying as it does the requirement as to value, is compulsorily registerable. Section 49 of the Act would rule it out if it is sought to use it as evidence of a transaction affecting the property."
In a later decision a Division Bench of the same Court in the case of Nani Bala Saha v. Ram Gopal Saha (A I R 1945 Cal. 19), held that a private award is a non‑testamentary instrument and would require registration if it comes within section 17(1)(6). If it is not registered‑it must to taken that the award does not exist and no question of cither setting it aside or remitting it to the arbitrator, therefore, can arise. It was pointed out that section 49(c) of the Registration Act prevents the party from adducing such an award in support of an application for filing it in Court with a view to get a decree on it. Their Lordships referred to the earlier decision of that Court which has been reproduced above, where the distinction between a private award and award made upon an order by the Court had been brought put and observed as follows :‑
"It is not necessary for us to consider whether the view expressed in I L R 62 Cal. 201 (equivalent to A I R 1934 Cal. 815) that an award made in pursuance of a submission in a suit would not require registration is correct or not, as in the case before u: the award is not of that character."
13. A Full Bench of the Judicial Commissioner's Court of Sind in the case of Hassanand v. Judhomal (A I R 1936 Sind 79.), held that an award made in pursuance of a reference filed in Court under para. 17, Schedule 2, C. P. C. purporting to create a mortgage or lien over immovable property of the value of Rs. 100 or upwards is not compulsorily registerable but an award made without the intervention of Court does require registration. The reason for this distinction given was that an award in a suit being a part of a judicial proceeding does not require registration on the principle laid down by the Privy Council in I L R 20 All. 171. In that case the Privy Council had held that section 17 of the Registration Act does not apply to proper judicial proceeding whether consisting of pleadings filed by the parties or orders made by the Court. Bindesri Naik v. Ganga Saran Sahu (I L R 20 All. 171).
14. The same question was also the subject‑matter of consideration before a Full Bench of the Nagpur High Court in the case of Muhammad Azizullah Khan v. Muhammad Noorullah Khan (A I R 1939 Nag. 233). Their Lordships in that case were considering an appeal arising out of a suit under para. 20, Schedule 2, C. P. C. which is equivalent to the present section 14 of the Arbitration Act. In this case, an award had been made without the intervention of the Court. Their Lordships dealing with the question of the validity of the award which was unregistered posed the question thus:
"The question then resolves itself into this does the award have to be proved under para. 20, and if so, does section 49, Registration Act, shut it out when it is not registered and when it relates to property of the requisite value "
They, however, went on to add:
"We wish to make it clear that we are not dealing with a case such as may arise where the arbitration is on a suit where the award is a step in the course of a suit. To such case different considerations apply. The filing in such a case is by the arbitrators and no contest is contemplated. On the other hand, where the arbitration is without the intervention of the Court the award is filed by a party. Para. 20 makes provision for an application to file. That application initiates a contest. That contest has an essential part of the proof of the award."
Dealing with the argument in the case with reference to section 49 of the Registration Act that when a person applies to have an award filed in Court he is nut endeavouring to affect the property in it; he is only asking that a piece of paper be tiled in Court, their Lordships observed;
"This contention, though ingenious, has, we think, been negatived by their Lordships of the Privy Council in 33 C W N 1150 (James R. R. Skinner v. Robert Hercules Skinner). That was a case in which a plaintiff who had obtained a sale‑deed which required registration and which therefore he was unable to enforce, brought a suit for specific performance and endeavoured to use the deed, not for the purpose of enforcing the sale, but in proof of an agreement to sell. Their Lordships declined to countenance such a subterfuge. They stated at page 1155 that an instrument which requires registration cannot be used in any legal proceedings to bring abut indirectly the effect which it would have had if registered. It is not to 'affect' the property and it is not to be received as evidence of any transaction 'affecting' the property."
In this view of the matter their Lordships of the Full Bench upheld the decision of the lower Court which had declined to file the award.
15. We may now pause to consider the salient points of these decisions. These may be broadly summaries thus:
(1) An award affecting immovable property of the requisite value if mace with the intervention of the Court, that is either in a pending suit or upon an agreement having been filed in Court, does not require registration as the award is a part of the judicial proceeding.
(2) An award in such a case made without the intervention of the Court affects immovable property and requires to be registered and if not registered it is inadmissible having regard to the provisions of section 49 of the Registration Act.
(3) A private award made without the intervention of the Court is operative by itself."
16. I shall stow refer to two decisions in which the contrary view has been taken: The first of these is a judgment by a Division Bench of the Patna High Court in the case of Sia Kishori v. Bhairvi Nandan (A I R 1953 Pat. 42). The learned Chief Justice with whom the other Judge agreed after referring to the Privy Council decision in the case of Muhammad Niwaz Khan (18 Cal. 414 (P C)), went on to observe thus:
"The decisions to which I have referred illustrate the state of the law previous to the coming into force of the Arbitration Act, 1940. A valid award was an operative by itself and there were two ways in which it could be enforced. It might be made a rule of the Court by an application under the Civil Procedure Code or under the Arbitration Act, 1899, as the case may be, or the party might be, or the party might treat it as an independent source of title and enforce it by suit. In either case it was open to the opposite‑party to challenge the validity of the award. The remedy by suit was taken away by section 32 of the Arbitration Act, 1940."
His Lordship then after review in a large number of decisions in which the effect of section 32 of the Arbitration Act had been considered, went on to hold as follows:
"After the coming into force of the Arbitration Act, 1940, the remedy by suit is taken away by section 32 of the Act, further, the Act insists that within vie time limited by Art. 178, Limitation Act, 1903, an application must be made in Court for the filing of the award. And the award becomes operative only when it is made a rule of the Court. Thus, the legal affect of the award as a decree finally determining the right of the parties does not remain unless the procedure prescribed by the Act is followed and a judgment is pronounced followed by a decree of the Court under section 16."
17. The second case is a Full Bench decision of the Patna High Court Seonarain v. Prubhuchand (A I R 1958 Pat. 252). In this case the Full Bench after considering at length the whole scheme of the Arbitration Act of 1940 and its various provisions recorded its conclusion thus:
"It is apparent from a review of the sections of the Arbitration Act of 1940 that, once a reference has been male to arbitration even without the intervention of the Court, the Court under the Act, has got exclusive jurisdiction in regard to the validity, effect or existence of the reference and toe award, and the jurisdiction‑of all other Courts is ousted. Further, section 17 of the Arbitration Act shows in unmistakable terms that an award, though given without the intervention of the Court, has to be made a rule of the Court, and the Court will pronounce judgment on the basis of the award, and a decree shall follow that is to sly, the award by itself is of no effect. It follows that an award as such, does not purport or operate to create any right, title or interest in the property dealt with by it within the meaning of section 17(1)(b) of the Registration Act, and therefore an award even though it be in respect of immovable property worth one hundred rupees and upwards, does not require registration.
Looked at from another point of view, namely, that an award is only effective when a decree follows the judgment upon 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. Such an award, even if not registered, can be enforced so as to enable the Court to pronounce the judgment according to it under section 17 of the Arbitration Act."
18. There is considerable force in the two decisions of the Patna High Court noted above in view of the provisions of the Arbitration Act, 1940 which have been fully brought out in the Full Bench decision and which I do not propose to repeat. Considering that even in a private arbitration the proceedings are subject to control of the Court under the provisions of the Act at all its stages and the award to be enforceable has to be made a rule of the Court as defined by the Act and also considering the bar contained in section 32 of the Act, the conclusion becomes difficult to resist that there is any good reason for distinguishing between an award made upon a private reference and an award made after the arbitration agreement had been filed into Court. If an unregistered award affecting immovable property is held to be non‑existent it is difficult to see how such an award, though made after' the intervention of Court, can be made the basis of a decree. But this is what was held in the two Full Bench cases of the Nagpur High Court and the Sind J. C.'s Court quoted above. But my task has been lightened by the amendment to section 49 of the Registration Act by the amending Ordinance of 1962, the effect of which I shall now proceed to examine.
19. I have quoted the section as it stood before the amendment as well as the amended section. One of the effects of the amendment is that a document which is compulsorily registerable under section 17 of the Registration Act is no longer inadmissible in evidence. This result has been achieved by the omission of the former clause (c) of section 49. We then come to the former clause (a) which barred an unregistered document from affecting any immovable property comprised therein. This has been substituted by a new clause (a) whereby an unregistered document (required to be registered under the Act or any earlier law) does not operate to create, declare, assign. limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, to or in immovable property. It would, therefore, be noticed that the broader expression contained in the former clause (a) to section 49, that is "affect any immovable property comprised therein" has been substituted by specific words which bar the operation of the un registered document for purposes stated therein. Now, the question is does an award which has been made the rule of the Court operate to create, declare, etc., any right, title or interest to or in immovable property. I am inclined to the view that it can so operate only when it is made the rule of the Court. It may we be that after an award bas been made on a private reference the parties may by an agreement accept it and if it affect immovable property have it registered and act upon it, but that in my opinion would not be by operation of the award itself. It would be the result of agreement between the parties who decided to act upon it. Such a result can be achieved even without an award. For example, there are frequently cases of private partition of immovable property by consent of parties. The award, therefore, does not become effective and operate in the manner provided by the section until it has been filed. In Court and made the rule of the Court. It would be noticed from the decisions which have been cited above and according to which a private award affecting immovable property is required to be registered before it is filed in Court, that the main difficulty in the way of holding otherwise was felt to have been caused by reason of the bar contained in the former section 49 of the Registration Act; whereby an unregistered document could not be received as evidence of any transaction affecting such property. Again and again it has been pointed out that because of this bar the Court cannot look at the document. That bar is now removed. The document, therefore, becomes admissible. That being so, once it is filed in Court it becomes the duty of the Court to deal with it under the provisions of the Arbitration Act.
20. For the reasons given my conclusion is that the Court is not precluded from dealing with the award under section 17 of the Arbitration Act for want of registration. I, therefore, reject this last contention as well of Mr. Brohi. In the result the objections are over‑ruled and the award is made the rule of the Court. Considering the close relationship between the parties I make no order as to costs.
K. B. A.
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