Civil Appeal No 822 of 1966
Appeal by special leave from the judgment and order dated April 27 1965 of the Punjab High Court in Civil Revision No 841 of 1964
Sarjoo Prasad DN Mishra and Ravinder Narain for the appellants
AK Sen SV Gupte BP Maheshwari and RK Maheshwari for respondent No 1 The Judgment of SM SIKRI and RS BACHAWAT was delivered by SIKRI JKS HEGDE J delivered a separate Opinion
Sikri J
This appeal by special leave is directed against the judgment dated April 27 1965 of the High Court of Punjab at Chandigarh section B Capoor J dismissing Civil Revision No 841 of 1964
The Civil Revision arose out of the following facts
The following pedigree table shows the relationship between the parties Sohan Lal Decd Husband of Gujri Harbans Lal D Sudarshan LD husband of Kamla Wati husband of Lachmi Devi Resp6 Satish Rakeah Jatindar Kaka Chand Surinder Kumar Kumar Kumar Kumar Minor Rani Resp
6 App
1 App
2 App
3 App 4 Minor Smt
Smt Nirmal Kanda Lajya Devi Devi Devi Reap
3 Reap4 Reap5 On the death of Sohan Lal Behari Lal was appointed as arbitrator by Harbans Lal Surinder Kumar then a minor through his mother Smt
Lachmi Devi and Smt
Gujri widow of Sohan Lal for partition of the joint property
Behari Lal by his award dated October 21 1956 divided the property into two equal 246 shares between Harbans Lal and Surinder Kumar
Harbans Lal and Surinder Kumar signed the award
Harbans Lal died on May 20 1960 upon which Surinder Kumar filed a suit for partition of the properties the subject matter of the award
This suit was dismissed as withdrawn on March 13 1962
On March 11 1962 Behari Lal arbitrator filed an application under section 14 of the Indian X of 1940 hereinafter referred to as the Act for filing the award in Court and for making the same a rule of the Court
Surinder Kumar entered appearance and filed objections under section 30 of the Act
One of the objections was that the award dated October 21 1956 was not admissible in evidence for want of proper stamp and registration and could not therefore be made a rule of the Court
On January 31 1963 the objections were dismissed by Miss Harmohinder Kaur Subordinate Judge First Class Ludhiana as time barred but she did not make the award a rule of the Court as there was a further objection to the effect that the award not having been executed on a properly stamped paper and not having been registered was not admissible in evidence
This objection was dealt with by Shri Om Parkash Saini Subordinate Judge First Class Ludhiana who by his order dated June 5 1963 held that the award in question was not admissible in evidence as it was executed on deficiently stamped paper and was not registered
He accordingly dismissed the application
An appeal was taken to the District Judge and the Additional District Judge by his order dated November 23 1964 upheld the order of the Subordinate Judge
A revision was then taken to the High Court
Capoor J held that the award actually effected a partition and required registration under section 171b of the Indian 
The learned Judge dissented from the decision of  Full Bench of the Patna High Court in Seonarain Lal vs Prabhu Chand1 and preferred to follow the view expressed by the Bombay High Court in Chimanlal Girdhar Ghanchi vs Dahyabhai Nathubhai Ghandhi2 by the Nagpur High Court in M A M Salamullah Khan vs
M Noorullah Khan3 by the Rangoon High Court in U Keltaha vs
U Pannawa4 and by the Calcutta High Court in Nani Bela Saha vs Ram Gopal Saha5
He accordingly dismissed the revision petition
The decision of the Patna High Court was however later followed by a Full Bench of the Punjab and Haryana High Court in Sardool Singh vs Hari Singh6 judgment dated November 8 1966
1 ILR 37 Pat
2 AIR 1938 Bom
3 AIR 1939 Nag 233 235
4 AIR 1940 Rang
5 AIR 1945 Cal
19 21 22
6 ILR 1967 1 Pun
 Hat
247 The question which arises before us is whether an award given under the Act on a private reference requires registration under section 171 b of the Indian  if the award effects partition of immovable property exceeding the value of Rs 100
The main reason given by Sinha J speaking for the Patna Full Bench in Seonarain Lal vs Prabhu Chand1 for holding that such an award does
not require registration is that under the scheme of the Act a private award unless a decree is passed in terms of the award has no legal effect
this according to him follows from the conclusion that once a matter has been referred to arbitration it comes within the immediate control of the Court under the Act and no other authority has any jurisdiction to deal with the matter except as provided for in section 35 of the Act
He thought that what distinguishes the provisions in the from the provisions in the Second Schedule in the Code of Civil Procedure is that the Act bars jurisdiction of all Courts to Pronounce upon the validity effect or existence of an award or arbitration agreement except the Court under the Act itself
Sinha J looking at it from another point
of view namely that an award is only effective when a decree follows the judgment upon the award observed that such an award may be covered by the exception mentioned in section 172vi any decree or order of a Court of the 
The Punjab Full Bench has followed this reasoning and indeed reproduced paras 5 to 15 of the Patna Full Bench judgment in its own judgment
Mahajan J with whom the two other Judges agreed observed I am in respectful agreement with the entire line of reasoning in the Patna case barring the underlined observations   an award is only effective when a decree follows the judgment on the award such an award may be covered by the exception mentioned in section 172 vi any decree or order of a Court of the  If these
observations are meant to convey that award as such is covered by the exception vi of section 17 2 of the  I am unable to agree
But the decree that follows the award when it is made a rule of the Court no exception can be taken to the view that such a decree is covered by the exception
 The Punjab Full Bench gave two additional reasons 1 If an award is registered it is still a waste paper unless it is made a rule of the Court
Thus registration does not in any manner add to its efficacy or give it any added competence
Section 32 of the 1 ILR 37 Pat252
248 is specific for no right can be rounded on an award as such after coming into force of the 1940  2 It is not disputed and indeed it could not be that the Court has the power under section 16 to remit the award from time to time
If registration of an award is an essential pre requisite before it could be made a rule of the Court under section 17 every time an award is remitted and a new award is made the new award will require registration
The result would be that in the same controversy there can be not only one registration but a number of registrations regarding the same title a situation which is not even envisaged by the 
 It seems to us that the main reason given by the two
Full Benches for their conclusion is contrary to
what was held by this Court in its unreported decision in MIs
Uttam Singh Dugal  Co vs The Union of India1
The facts in this case shortly stated were that Ms Uttam Singh Dugal  Co filed an application under section 33 of the Act in the Court of the Subordinate JudgeHazaribag
The Union of India respondent No 1 called upon respondent No 2 Col SK Bose to adjudicate upon the matter in dispute between respondent No 1 and the appellant company
The case of Ms Uttam Singh Dugal  Co was that this purported reference to respondent No 2 for adjudication on the matters alleged to be in dispute between them and respondent No 1 was not competent because by an award passed by respondent No 2 on April 23 1952 all the
relevant disputes between them had been decided
The High Court held inter alia that the first award did not create any bar against the competence of the second reference
On appeal this Court after holding that the application under section 33 was competent observed as follows The true legal position in regard to the effect of an award is not in dispute
It is well settled that as a general rule 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
After an award is pronounced no action can be started on the original claim which had been the subject matter of the reference
As has been observed by Mookerjee J in the case of Bhajahari Saha Banikya vs
Behary Lal Basak2 the award is in fact a final 1 Civil Appeal No 162 of 1962 judgment delivered on October 11 1962
2 at p 898
249 adjudication of a Court of the parties  own choice and until impeached upon sufficient grounds in an appropriate proceeding an award which is on the fact of it regular is conclusive upon the merits of the controversy submitted unless possibly the parties have intended that the award shall not be final and conclusive in reality an award possesses all the elements of vitality even though it has not been formally enforced and it may be relied upon in a litigation between the parties relating to the same subjectmatter
 This conclusion according to the learned Judge is based upon the elementary principle that as between the parties and their privies an award is entitled to that respect which is due to the judgment of a court of last resort
Therefore if the award which has been pronounced between the parties has in fact or can in law be deemed to have dealt with the present dispute the second reference would be incompetent
This position a lso has not been and cannot be seriously disputed  This Court then held on the merits that the dispute in regard to overpayments which are sought to be
referred to the arbitration of respondent No 2 by the second reference are not new disputes they are disputes in regard to
claims which the Chief Engineer should have made before the arbitration under the first reference
 This Court accordingly allowed the appeal and set aside the order passed by the High Court
This judgment is binding on us
In our opinion this judgment lays down that the position under the Act is in no way different from what it was before the Act came into force and that an award has some legal force and is not a mere waste paper
If the award in question is not a mere waste paper but has some legal effect it plainly purports to or affects property within the meaning of section 171b of the 
We may mention that an appeal was filed in this Court against the decision of the Division Bench of the Patna High Court which had referred the case of Sheonarain Lal vs Prabhu Chand1 to the Full Bench for opinion on certain questions and which decided the case in accordance with that opinion and the same was dismissed by this Court in Sheonarain Lal vs Rameshwari Devi2 in which the judgment was delivered by the same Bench which decided the case of Ms Uttam Singh Dugal vs The Union of Indiaa
It is true that this Court in Sheonarain Lal vs Rameshwari Devi2 did not expressly rule on the validity 1 ILR 37 Pat
2 Civil appeal No 296 of 1960 judgment delivered on December 6 1962
3 Civil Appeal No 162 of 1962 judgment delivered on October 11 1962
C169 17 250 of the answer given by the Patna Full Bench in Sheonarain Lal vs Prabhu Chand1 that such awards did not require registration but decided the case on the point whether the award in dispute in that case in fact purported or operated to create a right title or interest of the value of more than Rs 100 in immovable properties
But after holding that the document did not operate to create or extinguish any right in immovable property this Court observed The position would have been otherwise if the arbitrators had directed by t he award itself that tiffs shop would go to Prabhu Chand without any further document
In that case the award itself would have created in Prabhuchand a right to these properties
That is not however the provision in the award
In the absence of a registered document Prabhu Chand would get no title on the award and Sheonarain s title would remain in the shop
 In this connection we may mention two other decisions of this Court
In Champalal vs Mst
Samarath Bai2 Kapur 1 speaking for the Court observed as follows The second question that the award required registration and would not be filed by the arbitrators before it was registered is equally without substance
The filing of an unregistered award under section 49 of the is not prohibited what is prohibited is that it cannot be taken into evidence so as to affect immovable property falling under section 17 of the Act
That the award required registration was
rightly admitted by both parties
 Again in Kashtinathsa Yamosa Kabadi vs Narsingsa BhctsKarsa Kabadi3 Shah J speaking for the Court observed The records made by the Panchas about the division of the properties it is true were not stamped nor were they registered
It is however clear that if the record made by the Panchas in so far as it deals with immovable properties is regarded as a non testamentary instrument purporting or operating to create declare assign limit or extinguish any right title or interest in immovable property it was compulsorily registerable under section 17 of the  and would not in the absence of registration be admissible in evidence 1 ILR 37 Pat 252
2   816 3   806 251 In view of the above decisions it is not necessary to refute the other reasons given by both the Full Benches but out of respect for the learned Judges we will deal with them
We may mention that no comment was made in these cases on the provisions of para 7 of Schedule 1 to the Act
This para provides 7
The award shall be final and binding on the parties and persons claiming under them respectively
 If the award is final and binding on the parties it can hardly be said that it is
a waste paper unless
it is made a rule of the Court
We are unable to
appreciate why the conferment of exclusive jurisdiction on a court under the Act makes an award any the less binding than it was under the provisions of the Second Schedule of the Code of Civil Procedure
The Punjab Full Bench held that the registration does not in any manner add to its efficacy or give it any added competence
We cannot concur with these observations
If an award affects immovable property over the value of Rs 100 its registration does get rid of the disability created by section 49 of the 
Regarding the difficulty pointed out by the Punjab Full Bench that there may be many registrations we are not called upon to decide whether these difficulties would arise because the language of section 17 of the is plain
It may be that no such difficulties will arise because under section 162 of the Act what the arbitrator submits to the Court is his decision and it may be that the decision may not be registerable under section 17 of the 
But as we have said before we are not called upon to decide this point
In our opinion Capoor J was right in dissenting from the Patna Full Bench in Sheonarain Lal vs Prabhu Chand1 and holding that the award in dispute required registration
In the result the appeal fails and is
dismissed with costs
We may make it clear that we are dealing only with an award made on a reference by the parties without the intervention of court
Hegde J I agree
But I would like to add few words
Arbitration proceedings broadly speaking may be divided into two stages
The first stage commences with arbitration agreement and ends with the making of the award
And the second stage relates to the enforcement of the award
Paragraph 7 of the First Schedule to the lays down that the award shall be final and binding on the parties and persons claiming under them respectively
Therefore it is not possible to agree with the Full Bench decisions of the Patna High Court 1 ILR 37 Part
252 252 and that of the Punjab and Haryana High Court that an award Which is not made a decree of the Court has no existence in law
The learned Judges  who decided those cases appear to have proceeded on the basis that an award which cannot be enforced is not a valid award and the same does not create any rights in the property which is the subject matter of the award
This in my opinion is not a correct approach
The award does create rights in that property but those rights cannot be enforced until the award is made a decree of the Court
It is one thing to say that a right is not created it is an entirely different thing to say that the right created cannot be enforced without further steps
For the purpose of section 171b of the  all that we have to see is whether the award in question purport or operate to create or declare assign limit or extinguish whether in present or future any right title or interest whether vested or contingent of the value of one hundred rupees and upwards to or in immovable property
If it does it is compulsorily registerable
In the aforementioned Full Bench decisions sufficient attention has not been given to section 17 of the 
The focus was entirely on the provisions of the and there again on the enforcement of the award and not in the making of the award
A document may validly create rights but those rights may not be enforceable for various reasons
Section 17 does not concern itself with the enforcement of rights
That Section is attracted as soon as its requirements are satisfied There is no gainsaying the fact that the award with which we are concerned in this case at any rate purported to creat rights in immovable property of the value of rupees more than one hundred
Hence it is compulsorily registerable
YP Appeal dismissed


Summary:
An arbitrator appointed by the appellants and respondent partitioned their immovable property exceeding the value of Rs 100
The arbitrator applied under section 14 of the Indian to the Court for making the award a rule of the court
On the question whether the award was admissible in evidence as it was not registered HELDper Full Court The award required registration
Per Sikri and Bachawat JJ 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 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
After an award is pronounced no action can be started on the original claim which had been the subject matter of the reference
The position under the Act is in no way different from what it was before the Act came into force
Therefore
the conferment of exclusive jurisdiction on a court under the does not make an award any less binding than it was under the provisions of the Second Schedule of the Code of Civil Procedure
The filing of an unregistered award under section 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 section 17 of the Registration Act
It cannot be said that the registration does not in any manner add to its efficacy or give it added competence
If an award affects immovable property order the value of Rs 100 its registration does get rid of the disability created by section 49 of the Registration Act
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 section 171b of the Registration Act 248 F H E Ms Uttam Singh Dugal  Co vs Union of India CA No 162 of 1962 dated 11 10 1962 Champalal vs Mst
Samarath Bai  816 and Kashinathsa Yamosa Kabadi vs Narsingsa Baskarsa Kabadi 1961 3 SCR 792 806 followed
Sheonarain Lal vs Prabhu Chand ILR 37 Pat
252 and Sardooll Singh vs Hari Singh ILR 1967 1 Punj
 Har 622 disapproved
Chamanlal Girdhat Ghanchi vs Dhayabhai Nathubhai Ghandi AIR 1938 Bom
422 MA M Salamullah Khan vs
M Noorullah Khan AIR 1939 Nag 233 Keltaha vs
U Pannawa AIR 1940 Rang
228 Nani Bela Saha vs Ram Gopal Saha
AIR 1945 Cal
19 and Bhajahari Saha Banikya vs Behary Lal Basak  approved
Per Hegde
J concurring It is one thing to say that a right is not created
it is an entirely different thing to
say that the right created can 245 not be enforced without further steps
An award does create rights in that property but those rights cannot be enforced until the award is made a decree of the Court
For the purpose of section 171b of the Registration Act all that had to be seen is whether the award in question purport or operate to create or declare assign limit or extinguish whether in present or future any right title or interest whether vested or contingent of the value of one hundred rupees and upwards to or in immovable property
Since it does it is compulsorily registerable
252 B D