Sham arbitration awards cannot create title or withstand fraud challenges when used to evade registration and court process.

A sham or collusive arbitration used to secure title in immovable property can be challenged through suits attacking the court orders and decrees made on the award, so the bar under the Arbitration Act, 1940 did not prevent maintainability. The decrees were held vitiated by fraud and misrepresentation because the record showed no genuine dispute, inconsistent pleadings and evidence, and a process designed to evade stamp and registration duties. The awards were also invalid for want of compulsory registration where they purported to create rights in immovable property, and the orders making them rule of court were invalid as fraud on the court.

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Issues: (i) Whether the suits were maintainable despite the bar under the Arbitration Act, 1940; (ii) Whether the decrees in terms of the awards were vitiated by fraud and misrepresentation; (iii) Whether the arbitral awards were invalid for want of registration; (iv) Whether the orders making the awards rule of the court were invalid.

Issue (i): Whether the suits were maintainable despite the bar under the Arbitration Act, 1940.

Analysis: The challenge was not confined to the awards alone, but extended to the orders passed by the court making the awards rule of the court and to the decrees drawn in pursuance thereof. When the foundation of those orders and decrees was alleged fraud and misrepresentation, the bar against a separate challenge to an award did not apply in the same manner. The suit was therefore competent as a challenge to the court orders and consequential decrees obtained through the alleged fraudulent process.

Conclusion: The suits were maintainable.

Issue (ii): Whether the decrees in terms of the awards were vitiated by fraud and misrepresentation.

Analysis: The pleadings, oral evidence, and documentary record were mutually inconsistent and disclosed different versions of the same transaction. The arbitrator's conduct, the absence of any real dispute for arbitration, the preparation of documents to support a pre-arranged result, and the failure of the respondents to enter the witness box supported an inference of deceit. The court below ignored material evidence and drew erroneous inferences. The proceedings were found to be sham, collusive, and intended to secure title without a genuine adjudication and to evade stamp and registration liabilities.

Conclusion: The decrees were obtained by fraud and misrepresentation.

Issue (iii): Whether the arbitral awards were invalid for want of registration.

Analysis: An award that creates, declares, or assigns rights in immovable property of value above the statutory threshold is compulsorily registrable. The awards here purported to create title in immovable property not genuinely forming the subject of a real dispute referred to arbitration. Since they were unregistered, they could not be acted upon or made the basis of a decree under the Registration Act, 1908.

Conclusion: The awards were invalid for want of registration.

Issue (iv): Whether the orders making the awards rule of the court were invalid.

Analysis: A court cannot validly make a sham or collusive award its rule when the arbitration itself is fictitious or the process is used as a device to bypass conveyance requirements and statutory duties. As the proceedings lacked a genuine reference and adjudication, the orders were procured by suppressing the true nature of the transaction and thereby amounted to fraud on the court.

Conclusion: The orders making the awards rule of the court were invalid.

Final Conclusion: The appellate courts' view was reversed and the trial court's decrees in favour of the appellants were restored on the basis that the entire arbitration and decree-making process was fraudulent and ineffective in law.

Ratio Decidendi: A sham or collusive arbitration award that purports to create title in immovable property without a genuine dispute or adjudication, and is used to secure court decrees and evade statutory duties, is vitiated by fraud and cannot be made the rule of the court; if such an award is compulsorily registrable and remains unregistered, it is inadmissible and unenforceable.

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