1974 (9) TMI 111 - SC - Indian Laws

Arbitration Award for Property Partition Need Not Be Registered Under Indian Law

THEMI P. SIDHWA & ORS Versus SHIB BANERJEE & SONS PVT. LTD. & ANR

The Supreme Court held that an award by an arbitrator directing partition of immovable property exceeding a certain value does not require registration ... - Issues:Whether an award made by an arbitrator directing partition of immovable property exceeding a certain value requires registration under the Indian Registration Act, and whether such an award is admissible in evidence for enforcing rights.Analysis:The Supreme Court judgment dealt with the issue of whether an award made by an arbitrator directing partition of immovable property exceeding a certain value requires registration under the Indian Registration Act. The case involved an award by an arbitrator regarding the partition of property and the rights of the parties involved. The Delhi High Court had held that the award, not being registered as required by the Registration Act, cannot be enforced or confer any rights. The High Court's decision was based on the interpretation that the award related to the partition of immovable property exceeding a specified value, thus necessitating registration. However, the Supreme Court analyzed the provisions of the Registration Act and previous judicial decisions to determine the admissibility of such awards.The Supreme Court scrutinized the content of the award and observed that the award did not itself create, declare, assign, limit, or extinguish any right, title, or interest in immovable property exceeding a certain value, as required by the Registration Act. Instead, the award created a right to obtain another document that would subsequently create, declare, or assign such rights. The Court cited precedents, including decisions by the Privy Council and previous Supreme Court judgments, to establish that an award that merely creates a right to obtain another document does not require registration under the Registration Act.The Court further distinguished cases where awards directly created rights in immovable property without the need for additional documents, emphasizing that in the present case, the award did not itself create or extinguish any rights in the property. The judgment highlighted the necessity for a document to be executed to give effect to the rights outlined in the award, which would then require registration. The Court also referenced a Full Bench decision of the Andhra Pradesh High Court regarding the registration of awards creating charges on property, affirming the correctness of such a requirement.Ultimately, the Supreme Court allowed the appeal, ruling that the award in question fell under a provision of the Registration Act that did not necessitate registration. The Court did not provide a definitive opinion on the stamp duty issue, as the High Court's decision was primarily based on the registration requirement. The judgment clarified the distinction between awards that directly create rights in immovable property and those that create a right to obtain another document, emphasizing the latter's exemption from mandatory registration under the Registration Act.