Arbitral award over immovable property need not be registered, but an unfiled private award cannot bar a later suit.
An arbitral award concerning immovable property was treated as not creating or extinguishing rights in the property by itself, so it was held not compulsorily registrable under Section 17(1)(b) of the Registration Act and not inadmissible under Section 49 on that ground. The analysis further states that an award made on private reference, unless made a rule of the Court under the Arbitration Act, 1940, has no operative legal force and cannot be relied on to bar a later suit involving the same subject-matter. The article therefore distinguishes between registration requirements and enforceability of an unfiled award.
Issues: (i) Whether an arbitral award covering immovable property required registration and was inadmissible for want of registration. (ii) Whether an award made without intervention of the Court and not made a rule of the Court could nevertheless be used to bar the suit.
Issue (i): Whether an arbitral award covering immovable property required registration and was inadmissible for want of registration.
Analysis: The award was held not to be an instrument which, by itself, created, declared, assigned, limited or extinguished rights in immovable property within the meaning of the registration law. A Full Bench view of the Court was followed to the effect that an award, even if it relates to immovable property of value above one hundred rupees, does not require registration under Section 17(1)(b) of the Registration Act. The foundation of the trial Court's contrary view on inadmissibility under Section 49 of the Registration Act therefore could not stand.
Conclusion: The award did not require registration and was not inadmissible in evidence on that ground.
Issue (ii): Whether an award made without intervention of the Court and not made a rule of the Court could nevertheless be used to bar the suit.
Analysis: The scheme of the Arbitration Act, 1940 was treated as exhaustive for challenging or enforcing such an award. The Court held that an award given on private reference has no operative legal effect unless it is made a rule of the Court under the Act. In consequence, it cannot be relied upon even as a defence to defeat a subsequent suit dealing with the same subject-matter, because the validity and effect of the award cannot be agitated outside the procedure prescribed by the Act.
Conclusion: The unfiled award could not bar the suit and the plaintiffs' objection succeeded on this point.
Final Conclusion: The revision applications were disposed of by correcting the trial Court's view on registration and by rejecting the plea that the unfiled award barred the suit, so the matter was left to proceed to trial on the remaining issues.
Ratio Decidendi: An arbitral award made without intervention of the Court acquires no operative legal force unless it is made a rule of the Court under the Arbitration Act, 1940, and such an award is not compulsorily registrable merely because it concerns immovable property.
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