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Andhra Pradesh High Court
Judges : BASI REDDI, GOPALA KRISHNAN NAIR, VENKATESAM
MATTAPALLI VENKATARATHNAM - Appellant
Versus
MATTAPALLI CHALAMIAH - Respondent
Decided On : 04-01-66
ARBITRATION - AWARD - REGISTRATION - WHETHER AN AWARD PASSED AFTER THE COMING INTO FORCE OF THE ARBITRATION ACT, 1940 AND WHICH DEALS WITH IMMOVABLE PROPERTY OF A VALUE OF MORE THAN RS. 100 IS COMPULSORILY REGISTRABLE UNDER SECTION 17 (1) (B) OF THE INDIAN REGISTRATION ACT, BEFORE IT CAN BE MADE A RULE OF COURT UNDER SECTION 17 OF THE INDIAN ARBITRATION ACT, 1940.
Fact of the Case:
The appellants and the respondents constituted a Hindu joint family which owned considerable movable and immovable properties. Differences arose between them and they considered it necessary to effect a partition of the joint properties. Consequently, on 20th May. 1950. they executed an arbitration agreement appointing three persons as arbitrators for partitioning the entire movable and immovable properties belonging to the joint family. At the time of the arbitration agreement, the second appellant, Venkataswamy, was a minor and was represented by his paternal uncle, the first respondent (Chalamiah) as guardian. By October. 1954, the second appellant became a major and therefore he along with the first appellant and the two respondents executed a document expressly stating that the immovable properties belonging to the joint family had been partitioned by the arbitrators during the minority of the second appellant and that the second appellant accepted that partition. On 28th August, 1955, the four members of the family executed a document requesting the arbitrators "to pass an award taking into consideration the chitta balance pertaining to our joint family, the paddy account relating to Faslis 1347, 1348 and 1349, the statements given by us previously and also the records." On 10th november, 1955, the arbitrators made an award dividing the moneys belonging to the joint family among the four sharers. They decided that the first respondent had taken from the joint family a sum of Rs. 14. 051-7-3 and the second respondent a sum of Rs. 8, 926-3-6 in excess of their shares and. therefore, directed them to pay to the first plaintiff, a sum of Rs, 8,268-11-0 and to the second respondent a sum of Rs. 14,708-15-9, They also decided that these amounts payable to the appellants by the respondents should be a first charge on the immovable property which fell to the respondents. The award took care to declare that the respondents were also personally liable to pay the aforesaid amounts to the appellants. The appellants thereafter took steps under sec. 14 of the Arbitration Act to cause the award to be filed in the Court below and prayed that a judgment be pronounced and a decree passed in accordance with the award. The respondents filed two separate applications, I. A. Nos. 597 and 598 of 1956, for setting aside the award. The respondents raised a preliminary objection that the award being unregistered could not be received in evidence as it came under the ban of section 49 of the Registration Act. According to them, the award which effected partition of extensive immovable properties of the joint family and which further created a charge on the immovable properties which were allotted to the share of the respondents was compulsorily registrable under section 17 (1) (6) of the registration Act. They also raised an objection that the award was not duly stamped.
Finding of the Court:
The Court held that an award which purports 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 of the value of Rs. 100 and upwards does not require to be registered under section 27 (1) (b) of the Indian Registration Act. There is no provision in the Act (Arbitration Act, X of 1940) dispensing with registration of a document compulsorily registrable under section 17 (1) (b ). Indeed, the amendment of section 17 (2) (vi) of the Registration Act by section 10 of the transfer of Property (Amendment) Supplementary Act, 1929 clearly shows that an award no longer enjoys exemption from registration which it previously enjoyed. After the amendment of 1929. which came into force on 1st April, 1930, an award is compulsorily registerable if it purports or operates to create, declare, assign, limit or extinguish, whether in present or in future, any vested or contingent right, title or interest to or in the immovable property of the value of rs. 100 and upwards.
Issues: Whether an award passed after the coming into force of the Arbitration Act, 1940 and which deals with immovable property of a value of more than Rs. 100 is compulsorily registrable under section 17 (1) (b) of the Indian Registration Act, before it can be made a rule of court under section 17 of the Indian Arbitration Act, 1940.
Ratio Decidendi: The Court held that an award which purports 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 of the value of Rs. 100 and upwards does not require to be registered under section 27 (1) (b) of the Indian Registration Act. There is no provision in the Act (Arbitration Act, X of 1940) dispensing with registration of a document compulsorily registrable under section 17 (1) (b ). Indeed, the amendment of section 17 (2) (vi) of the Registration Act by section 10 of the transfer of Property (Amendment) Supplementary Act, 1929 clearly shows that an award no longer enjoys exemption from registration which it previously enjoyed. After the amendment of 1929. which came into force on 1st April, 1930, an award is compulsorily registerable if it purports or operates to create, declare, assign, limit or extinguish, whether in present or in future, any vested or contingent right, title or interest to or in the immovable property of the value of rs. 100 and upwards.
Final Decision: The Court held that an award which purports 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 of the value of Rs. 100 and upwards does not require to be registered under section 27 (1) (b) of the Indian Registration Act. There is no provision in the Act (Arbitration Act, X of 1940) dispensing with registration of a document compulsorily registrable under section 17 (1) (b ). Indeed, the amendment of section 17 (2) (vi) of the Registration Act by section 10 of the transfer of Property (Amendment) Supplementary Act, 1929 clearly shows that an award no longer enjoys exemption from registration which it previously enjoyed. After the amendment of 1929. which came into force on 1st April, 1930, an award is compulsorily registerable if it purports or operates to create, declare, assign, limit or extinguish, whether in present or in future, any vested or contingent right, title or interest to or in the immovable property of the value of rs. 100 and upwards.
( 1 ) THE determination of this appeal involves important questions of law, one of which is whether an award passed after the coming into force of the Arbitration act, 1940 requires to be registered under section 17 (1) (b) of the Indian registration Act. No doubt, on this question there is already a decision of a bench of this High Court of which one of us (Chandrasekhara Sastry, J.) was a member, in Srinivasa Rao v. Narsimha Rao , wherein, it is held that such an award requires to be registered and would be inadmissible in evidence unless it be registered. But, Sri Narasaraju. the learned Counsel for the appellants sought to argue that the said decision requires reconsideration as several aspects were not fully considered when that decision was rendered. On the other hand mr, Parthasarathi, the learned Counsel for the respondents, stated that both on principle and on authority, even an award passed after the coming into force of the Arbitration Act. 1940, requires to be registered under section 17 (1) (b) of the Indian Registration Act as even such an award "purports" to create or declare rights in immovable property, if the award dealt with immovable property worth more than Rs. 100. Therefore, it is submitted that the decision in Srinivasa rao v. Narasimha Rao , is correct and does not require re-consideration". But, having regard to the fact that the said question is an important one and since the case involves a decision on other questions of law also, we direct under Rule 2 of Appellate Side Rules of this High Court, that the appeal be posted before a Full Bench. Pursuant to the said order, this Appeal and the Memorandum of Cross- objections came on for final hearing before the Full Bench.
( 2 ) THIS appeal has been placed before us as a result of the view expressed by a division Bench of this Court that it involves certain important questions of law which deserve consideration by a larger Bench. The question expressly mentioned in the Order of Reference to the Full Bench is :"whether a private award passed after the coming into force of the arbitration Act, 1940 and which deals with immovable property of a value of more than Rs. 100 is compulsorily registrable under section 17 (1) (b) of the Indian Registration Act, before it can be made a rule of court under section 17 of the Indian Arbitration Act, 1940. "although, no other question has been formulated in the Order of Reference to the Full Bench, certain other points also seem to arise for our consideration and we shall deal with them in due course.
( 3 ) THE salient facts leading up to this appeal may now be stated succinctly. The two appellants and the two respondents before us constituted a Hindu joint family which owned considerable movable and immovable properties. Differences arose between them and they considered it necessary to effect a partition of the joint properties. Consequently, on 20th May. 1950. they executed an arbitration agreement. Exhibit A-l appointing V. Kishniah, B. Chinna venkatrayudu and M. Ayyanna alias Venkataraju as arbitrators for partitioning the entire movable and immovable properties belonging to the joint family into four shares. Under this document, thay also agreed to acxept as final and binding, the decision of the arbitrators. At the time of Exhibit A-1, the second appellant, Venkataswamy, was a minor and was represented by his paternal uncle, the first respondent (Chalamiah) as guardian. By October. 1954, the second appellant became a major and therefore he along with the first appellant and the two respondents executed Exhibit A-2 dated 10th October, 1954 This document expressly stated that the immovable properties belonging to the joint family had been partitioned by the arbitrators during the minority of the second appellant and that the second appellant accepted that partition. On 28th August, 1955, the four members of the family executed Exhibit A-3 requesting the arbitrators " to pass an award taki
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