TaxTMI 
TaxTMI 
1968 (9) TMI 119
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....then a minor through his mother Smt. Lachmi Devi) and Smt. Gujri, widow of Sohan Lal, for partition of the joint property. Behari Lal, by his award dated October 21, 1956, divided the property into two equal shares, between Harbans Lal and Surinder Kumar. Harbans Lal and Surinder Kumar signed the award. Harbans Lal died on May 20, 1960, upon which Surinder Kumar filed a suit for partition of the properties, the subject-matter of the award. This suit was dismissed as withdrawn on March 13, 1962. On March 11, 1962, Behari Lal, arbitrator, filed an application under s. 14 of the Indian Arbitration Act, 1940 (X of 1940)--hereinafter referred to as the Act--for filing the award in Court and for making the same a rule of the Court. Surinder Kumar entered appearance and filed objections under s. 30 of the Act. One of the objections was that the award dated October 21, 1956, was not admissible in evidence for want of proper stamp and registration and could not, 'therefore, be made a rule of the Court. On January 31, 1963, the objections were dismissed by Miss Harmohinder Kaur, Subordinate Judge, First Class, Ludhiana, as time-barred, but she did not make the award a rule of the Court a....
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....uishes the provisions in the Arbitration Act from the provisions in the Second Schedule in the Code of Civil Procedure is that the Act bars jurisdiction of all Courts to Pronounce upon the validity, effect or existence of an award or arbitration agreement except the Court under the Act itself. Sinha, J., looking at it from another point. of view, namely, that an award is only effective when a decree follows the judgment upon the award, observed that such an award may be covered by the exception mentioned in section 17(2)(vi) (any decree or order of a Court) of the Registration Act. The Punjab Full Bench has followed this reasoning, and indeed reproduced paras 5 to 15 of the Patna Full Bench judgment in its own judgment. Mahajan, J., with whom the two other Judges agreed, observed: "I am in respectful agreement with the entire line of-reasoning in the Patna case barring the underlined observations :-- "... an award is only effective when a decree follows the judgment on the award such an award may be covered by the exception mentioned in section 17(2) (vi) (any decree or order of a Court) of the Registration Act." If these. observations are meant to convey that aw....
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....s competent observed as follows: "The true legal position in regard to the effect of an award is not in dispute. It is well settled that as a general rule, all claims which are the subject-matter of a reference to arbitration merge in the award which is pronounced in the proceedings before the arbitrator and that after an award has been pronounced, the rights and liabilities of the parties in respect of the said claims can be determined only on the basis of the said award. After an award is pronounced, no action can be started on the original claim which had been the subject-matter of the reference. As has been observed by Mookerjee, J. in the case of Bhajahari Saha Banikya v.Behary Lal Basak(2) "the award is, in fact, a final adjudication of a Court of the 'parties' own choice, and until impeached upon sufficient grounds in an appropriate proceeding, an award, which is on the fact of it regular, is conclusive upon the merits of the controversy submitted, unless possibly the parties have intended that the award shall not be final and conclusive... in reality, an award possesses all the elements of vitality, even though it has not been formally enforced, and it m....
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..... But, after holding that the document did not operate to create or extinguish any right in immovable property, this Court observed: "The position would have been otherwise if the arbitrators had directed by t he award itself that tiffs shop would go to Prabhu Chand without any further document. In that case the award itself would have created in Prabhuchand a right to these properties. That is not, however, the provision in the award. In the absence of a registered document, Prabhu Chand would get no title on the award and Sheonarain's title would remain in the shop." In this connection we may mention two other decisions of this Court. In Champalal v. Mst. Samarath Bai([1960] 2 S,C.R 810, 816), Kapur, 1., speaking for the Court, observed as follows: "The second question that the award required registration and would not be filed by the arbitrators before it was registered is equally without substance. The filing of an unregistered award under s. 49 of the Registration Act is not prohibited; what is prohibited is that it cannot be taken into evidence so as to affect immovable property falling under s. 17 of the Act. That the award required registration was. ....
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....nion, Capoor, J., was right in dissenting from the Patna Full Bench in Sheonarain Lal v. Prabhu Chand(1) and holding that the award in dispute required registration. In the result the appeal fails and is. dismissed with costs. We may make it clear that we are dealing only with an award made on a reference by the parties without the intervention of court. Hegde, J. I agree. But I would like to add few words. Arbitration proceedings, broadly speaking may be divided into two stages. The first stage commences with arbitration agreement and ends with the making of the award. And the second stage relates to the enforcement of the award. Paragraph 7 of the First Schedule to the Arbitration Act lays down that, "the award shall be final and binding on the parties and persons claiming under them respectively". Therefore it is not possible to agree with the Full Bench decisions of the Patna High Court and that of the Punjab and Haryana High Court that an award Which is not made a decree of the Court has no existence in law. The learned Judges' who decided those cases appear to have proceeded on the basis that an award which cannot be enforced is not a valid award and the same ....