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A.M.AHMADI, K.RAMASWAMY, M.M.PUNCHHI
S. V. Chandra Pandian – Appellant
Versus
S. V. Sivalinga Nadar – Respondent
No, the arbitration award distributing immovable properties as part of partnership assets upon dissolution does not require registration under Section 17 of the Registration Act. (!) (!) (!) (!) (!) (!)
Partnership property, whether movable or immovable, vests in the firm during its subsistence, with each partner holding an undefined, fluctuating interest in the entire assets, not in any specific portion. (!) [1000316690007][1000316690015][1000316690017]
On dissolution, Section 48 of the Partnership Act requires settlement of accounts: debts and liabilities are first discharged from firm assets, followed by adjustments for advances and capital, leaving a residue (if any) divided among partners proportionate to their profit-sharing ratios. This residue is treated as money (movable property) in law, as firm assets must be realized and converted into cash before distribution. (!) [1000316690007][1000316690010][1000316690011][1000316690015][1000316690017]
Allocating specific properties from this residue to partners constitutes a mutual adjustment of their common interests, not a "transfer," "partition," "creation," "declaration," "assignment," "limitation," or "extinguishment" of any right, title, or interest in immovable property under Section 17(1)(b), (c), or (e) of the Registration Act. No partner has a definite, earmarked share in any immovable property beforehand, so no such change occurs upon allocation. (!) [1000316690015][1000316690016][1000316690017]
The award here confined itself to firm properties (including those benami or standing in partners' names but belonging to the firm), settled accounts, and allocated residue via schedules, without effecting a registrable instrument. (!) (!) [1000316690017][1000316690018]
Thus, the award is valid without registration and can be made a rule of the court. (!) [1000316690018]
JUDGMENT
Ahmadi, J.
The four appellants and respondents 1 and 2 are brothers. They were carrying on business in partnership in the name and style of Mes-sers Sivalinga Nadar & Brothers and S.V.S. Oil Mills, both partnerships being registered under the Partnership Act, 1932. Most of the properties were acquired by the firm of Sivalinga Nadar & Brothers. The firm of Messrs S.V.S. Oil Mills merely had leasehold rights in the parcel of land belonging to the first-named firm on which the superstructure of the oil mill stood. Both the partnerships were of fixed durations. Disputes arose between the six brothers in regard to the business carried on in partnership in the aforesaid two names. For the resolution of these disputes the six brothers entered into an arbitration agreement dated October 8, 1981, which was as under:
"We are carrying on business in partnership together with other partners under several partnership names. We are also holding shares and managing the Public Limited Company, namely, the Madras Vanaspati Ltd., at Villupuram. Disputes have arisen among us with respect to the several business concerns, immovable and moveable properties standing in our names as well as other r
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