Case: Themi P. Sidhwa &amp; Ors Vs. Shib Banerjee &amp; Sons Pvt. Ltd. &amp; Anr

2. By an agreement dated 25th April 1961 various disputes and matters in difference between the parties were referred to the sole arbitration of Mr. B. K. Daphtary. The arbitrator made his award on 25th April 1962. it is not necessary to refer to the various stages the matter went through except that the case came to be finally beard by the Delhi High Court. Before that Court by an application filed under Section 151. Civil P. C. a question was allowed to be raised that as the award directs partition of immovable property and the value of this immovable property is more than one lakh it therefore requires registration under Section 17 (1) (b) of the Registration Act and the same is not admissible in evidence and cannot be enforced or confer any rights. The learned single Judge of the High Court who heard the matter held that the award, not having been registered as required by Section 17 (1) (b) of the Indian Registration Act cannot be made a rule of the Court Under Section 17 of the Arbitration Act. The learned Judge also held that he would have had no hesitation to follow the course prescribed in S. 38 of the Stamp Act and receive the stamp duty and penalty but for his decision that the document requires registration.3. The learned Judge proceeded on the basis that the award relates to partition of immovable property of the value exceeding rupees one hundred and therefore comes within the ambit of Section 17 (1) (b) of the Indian Registration Act. 1908. No doubt it does but the learned Judge did not bestow his attention on the words of that section and are whether it operates to create rights in immoveable property or whether it merely creates a right to obtain another document which will, when executed create any such right. The learned Judge purported to follow the decision of the Andhra Pradesh High Court in M. Venkataratnam v. M. Chelamayya, AIR 1967 AP 257   (FB).4. The award in so far as it is relevant is in the following termsI hold and award that the said Tehmi Pheroze Sidhwa. Almitra Pheroze Sidhwa and Mani Rustom Sidhwa paid the total contribution of Rs. 32.500/-(Rupees thirty two thousand five hundred)as their one-fourth share in the cost of the land at Najafgarh road. Delhi being plot no. 71/5 of the Industrial Area Scheme of the Delhi Improvement. Trust admeasuring about 7246/67 square yards and the factory and other buildings and compound wall constructed thereon and occupied by Delhi floorings Private Ltd. that the said Tehmi Pheroze Sidhwa. Almitra Pheroze Sidhwa and Mani Rustom Sidhwa are between them entitled to a one-fourth share or interest in the said land and buildings and in the rents and profits thereof : that as between themselves the shares or interest of the said Tehmi Pheroze Sidhwa, Almitra Pheroze Sidhwa and Mani Rustom Sidhwa are as follows : Tehmi Pherozo Sidhwa 3/32 share on the Almitra Pheroze Sidwha 3/32 share whole Mani Rustom Sidhwa 2/32 share property.2. A lease of the said property has been granted by the Delhi Improvement Trust to Shib Banerjee and Sons private Ltd. and the said property stands in the name of Shib Banerjee and Sons Private Ltd. I hold and award that Shib Banerjee and Sons private Ltd. hold the said property upon Trust as to one-fourth thereof for the said Tehmi Pheroze Sidhwa. Almitra Pheroze Sidhwa and Mani Rustom Sidhwa in the share as above mentioned and that the said Tehmi Pheroza Sidhwa. Almitra Pheroze Sidhwa and Mani Rustom Sidhwa are entitled to a one-fourth share in the rents and profits of the said property from 1st January, 1960.3. I award and direct that Shib Banerjee and Sons private Ltd. do pay to the said Tehmi Pheroze. Sidhwa. Almitra Phiroze Sidhwa and Mani Ruston Sidhwa the one-fourth share of the rents and profits of the said property at the rate ofRs. 93-75 np. per month to Tehmi Pheroze SidhwaRs. 93-75 np. per month to Tehmi Pheroze Sidhwa.Rs. 62-50 np. per month to Mani Rustom Sidhwa.from 1st January, 1960 to 30th April, 1962 (both days inclusive) and thereafter do pay to them one-fourth share of the rents and profits of the said property in the aforesaid shares.

Court's reasoning:
It would be noticed that the award itself does not purport or operate to create, declare, assign, limit or extinguish, whether in present or in future any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards in respect of the immoveable property, as contemplated under Section 17 (1) (b) of the Registration Act. It merely creates a right to obtain another document which will, when executed. create, declare, assign. limit or extinguish any such right, title or interest. The award directs Shib Banerjee and Sons Private Ltd. to execute such documents as may be necessary for declaring the one-fourth share of the appellants in the said property and also to execute such documents as may be necessary for transferring the said property and the lease from the Delhi Improvement Trust to the Joint names of themselves and the appellants. It, therefore, squarely falls under Section 17 (2) (v) of the Registration Act.The Full Bench decision of the Andhra Pradesh High Court relied upon by the learned Judge decided that an award that created a charge must be registered. That is undoubtedly correct. The question regarding the application of Section 17 (2) (v) of the Registration Act however did not arise there.9. The learned Judge does not refer to any of the decision which we have referred to, including those of this Court because he proceeded to decide the matter on the assumption that the award itself created a right in immovable property of the value of over one hundred rupees. We are clearly of opinion that the award in this case fails under Section 17 (2) (v) and is, therefore, not registrable.10. As regards the question of stamp duty, we do not propose to express any opinion as it would appear that the learned Judge of the High Court would himself have been ready to receive the stamp duty and penalty if he had held that the agreement was not compulsorily registrable.