Registration not required for arbitral distribution of dissolved partnership assets treated as mutual adjustment of partners' surplus rights.

An arbitral award distributing the residue of dissolved partnership firms did not amount to a partition or transfer of immovable property requiring registration under section 17(1) of the Registration Act. The analysis treats a partner's interest as confined to the surplus remaining after discharge of liabilities, so allocation of partnership assets on dissolution is a mutual adjustment of rights under the Partnership Act. Even where the award used language of exclusive allotment to individual partners, its legal character remained a distribution of partnership residue rather than an extinguishment of interest in specific immovable property.

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Issues: Whether an arbitral award distributing the assets of dissolved partnership firms among the partners required registration under section 17(1) of the Registration Act.

Analysis: The award was confined to the assets of the partnership firms and, on a proper construction, effected distribution of the residue after dissolution and settlement of accounts under the Partnership Act. A partner has no defined share in any specific item of partnership property during the subsistence of the firm; his interest is in the surplus remaining after liabilities are discharged. When such surplus is allocated on dissolution, the result is a mutual adjustment of rights and not a partition, transfer, or extinguishment of interest in immovable property within section 17(1) of the Registration Act. Mere language indicating exclusive allotment to particular partners does not alter the legal character of the award where the subject-matter is only the distribution of partnership residue.

Conclusion: The award did not require registration under section 17(1) of the Registration Act and the objection to its enforceability on that ground failed in favour of the appellants.

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