1989 (3) TMI 374 - SC - Indian Laws

Supreme Court clarifies award registration rules for immovable property rights

The Supreme Court held that the award required registration as it created new rights in immovable property. The subsequent registration of the award did ... - Issues Involved:1. Validity of the arbitrator's authority.2. Proper stamping of the award.3. Registration of the award.4. Admissibility and enforceability of the award.Issue-wise Detailed Analysis:1. Validity of the Arbitrator's Authority:The appellant contended that he had informed the sole arbitrator through registered and telegraphic notice that he had no faith in the arbitrator and repudiated his authority to proceed with the arbitration proceedings. The learned Trial Judge held that the appellant failed to prove that he had repudiated the authority of the arbitrator before the award was announced. The objections were treated as objections under Section 33 of the Arbitration Act, 1940, and were filed within the limitation period. The learned Sub-Judge IInd Class, Panipat, dismissed the objections and made the award the rule of the court.2. Proper Stamping of the Award:The appellant raised the issue that the award was on unstamped paper and thus could not be made the rule of the court. The learned District Judge held that the award was not properly stamped and could not be made the rule of the court. However, the High Court noted that the necessary stamp was purchased on 8th August 1974 before the award was filed on 9th September 1974, and thus, the award could not be argued to be unstamped. The High Court held that the learned District Judge was in error in allowing the stamp objection to be taken.3. Registration of the Award:The appellant contended that the award was unregistered and thus could not be made the rule of the court as it affected immovable property of more than Rs. 100. The learned District Judge, after analyzing the provisions of Section 17 of the Registration Act, 1908, concluded that the award declared a right in immovable property and since it was unregistered, it could not be made the rule of the court. The High Court, however, held that the award did not create any right as such in immovable property; it only admitted the already existing rights between the parties and hence did not require registration. The Supreme Court examined the award and concluded that it did create, declare, or assign a right, title, and interest in the immovable property, and thus required registration. The award was not a mere declaration of existing rights but the creation of new rights, making registration compulsory under Section 17 of the Registration Act, 1908.4. Admissibility and Enforceability of the Award:The Supreme Court held that an unregistered award affecting immovable property of the value of more than Rs. 100 could not be looked into by the court for pronouncement upon the award on the application under Section 14 of the Arbitration Act unless the award is registered. Section 49 of the Registration Act enjoins that the award cannot be received as evidence of any transaction affecting immovable property unless it is registered. The subsequent registration of the award after the relevant time did not validate it retrospectively. The Supreme Court found that the High Court was in error in accepting the award and pronouncing judgment in terms of the unregistered award. The appeal was allowed, and the judgment and order of the High Court were set aside.Conclusion:The Supreme Court concluded that the award required registration as it created new rights in immovable property. The subsequent registration of the award did not validate it retrospectively, and thus, the High Court's decision to accept the award was incorrect. The appeal was allowed, and the judgment and order of the High Court were set aside, with each party bearing their own costs.