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1981 Supreme(All) 251

IN THE HIGH COURT OF ALLAHABAD
T. S. Misra and D. N. Jha, JJ.
MAHESHWAR DAYAL - Appellant
Versus
NEEL KANTHESHWAR DAYAL - Respondents
First Appeal 38 Of 1976
Decided On : 07/08/1981

An award that is required to be registered under Section 17 of the Indian Registration Act, 1908, cannot be received in evidence or acted upon unless it has been registered.

Headnote:

ARBITRATION - AWARD - REGISTRATION - STAMP DUTY - EFFECT OF NON-REGISTRATION - ADMISSIBILITY IN EVIDENCE - SECTION 17, ARBITRATION ACT, 1940 - SECTION 49, INDIAN REGISTRATION ACT, 1908 - SECTION 35, INDIAN STAMP ACT, 1899.

Fact of the Case:

An arbitrator made an award on 9-10-1973, but it was not executed on stamp paper or registered. The appellant, one of the parties to the arbitration, filed an application under Section 14(2) of the Arbitration Act, 1940, seeking to make the award a rule of the court. The respondents, the other parties to the arbitration, objected, arguing that the award was inadmissible in evidence and invalid for want of registration and proper stamp duty.

Finding of the Court:

The court held that the award was inadmissible in evidence and could not be acted upon because it was not registered and was not properly stamped. The court also held that the award could not be remitted to the arbitrator for re-writing on stamp paper or for getting it registered.

Issues: 1. Whether the award was admissible in evidence and could be acted upon, given that it was not registered and not properly stamped? 2. Whether the award could be remitted to the arbitrator for re-writing on stamp paper or for getting it registered?

Ratio Decidendi: 1. An award that is required to be registered under Section 17 of the Indian Registration Act, 1908, cannot be received in evidence or acted upon unless it has been registered (Section 49, Indian Registration Act). 2. An unstamped or insufficiently stamped instrument cannot be admitted in evidence unless the proper duty and penalty have been paid (Section 35, Indian Stamp Act, 1899). 3. An award cannot be remitted to the arbitrator for re-writing on stamp paper or for getting it registered under Section 16(1)(c) of the Arbitration Act, 1940, or under Section 151 of the Code of Civil Procedure, 1908.

Final Decision: The appeal was dismissed, and the court made no order as to costs.

T. S. MISRA, J.

( 1 ) THIS appeal arises in the following circumstances. Sheo Dularay filed an application under section 14 (2) of the Arbitration Act before the Court below alleging that he was appointed arbitrator by the present appellant and the respondents Nos. 1 and 2 to effect partition of immovable properties situate at village Korar and Sair as also at Lucknow. He made his Award on 9-10-1973 and filed the same in the Court below on 6-11-1973. The respondents Nos. 1 and 2 filed their separate objections praying that the Award be set aside, on a variety of grounds stated in their objections. One of the common grounds taken in the objections was that the Award having not been made on stamp-paper of requisite value was inadmissible in evidence and cannot be acted upon and that the Award which was compulsorily registrable had not been registered under the provisions of the Indian Registration Act; hence it was invalid. The present appellant Maheshwar Dayal disputed this assertion. A number of other grounds were taken impugning the Award but they need not be mentioned here for the purposes of this appeal. A preliminary issue was framed in the following terms :-

"whether impugned award is illegal, invalid and inadmissible in evidence for want of proper stamp and compulsory registration as alleged, and if so to what effect. "

( 2 ) THE trial Court held that the Award in question is vitiated for want of registration and as it was not properly stamped it was liable to be impounded. The application for making the Award rule of the Court was rejected and the objections filed by the present respondents Nos. 1 and 2 were allowed, The Award was impounded with a direction to be sent to the Collector for necessary action. Maheshwar Dayal being aggrieved has filed the instant appeal.

( 3 ) SHRI Hargovind Dayal Srivastava the learned counsel for the appellant while conceding that the award was not made on stamp paper of requisite value submitted that it did not require registration because it did not create any title in favour of any person and that it merely recognized the title which already existed in favour of the wife of Maheshwar Dayal with respect to the house situate in Barood Khana, Lucknow. Further, it was submitted that the said house was claimed as exclusive property of the wife of the appellant: hence the award with respect to that property was seperable and should have been made a Rule of the Court even if the award required registration. It was also argued that for the purposes of registration a document comes into existence only when it is properly stamped. Hence the award which was not at all stamped could not be presented for registration unless the requisite stamp charges and the penalty had been paid, and the period of four months for presenting the document for registration would start from the date the said charges and penalty had been paid. Sri S. D. Misra, the learned counsel for the respondents submitted that by reason of Section 17 (1) (b) of the Indian Registration Act the award required registration inasmuch as it had an effect of extinguishing the right of the heirs of sheo Narain Lal in whose name the property in question situate at Barood Khana, Lucknow, stood recorded and in declaring the said property as the property of Maheshwar Dayal appellant. He also submitted that the award should have been presented for registration within four months from the date of its execution and it was wrong to say that the period of four months would start from the date when the stamp charges and penalty had been paid.

( 4 ) WE shall now proceed to examine the rival contentions of the parties, It was not in dispute that the impugned award dated 9-10-1973 was not made on stamp paper of requisite value, In fact it did not bear any stamp at all. The award was also not registered under the provisions of the indian Registration Act, The arbitrator filed this award in the Court without getting it registered. When an objection was r













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