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  • cl. (b) of sub-s. (1) of s. 17 of the Registration Act, 1908,
  • provisions of cl. (c) of s. 49 of the Registration Act.
  • provision of s. 49 of the Indian Registration Act
  • s. 17 of the Indian Arbitration Act, 1940.
  • ss. 17 and 30 of the Arbitration Act
  • Section 2(c) of the Arbitration Act
  • s. 17(1)(b) of the Registration Act.
  • s. 49(c) of the Registration Act,
  • s. 17 of the Registration Act,
  • s. 33 of the Arbitration Act
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Cites
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Citation Codes
Equivalent Citations
citation codes
Case Number
Judges
Acts
  • cl. (b) of sub-s. (1) of s. 17 of the Registration Act, 1908,
  • provisions of cl. (c) of s. 49 of the Registration Act.
  • provision of s. 49 of the Indian Registration Act
  • s. 17 of the Indian Arbitration Act, 1940.
  • ss. 17 and 30 of the Arbitration Act
  • Section 2(c) of the Arbitration Act
  • s. 17(1)(b) of the Registration Act.
  • s. 49(c) of the Registration Act,
  • s. 17 of the Registration Act,
  • s. 33 of the Arbitration Act
Smart Summary

Comprehensive Summary of the Opinion (Vimadalal, J.)

Factual and Procedural Background

Disputes arose between two branches of the same family concerning the estate of the deceased Narbheram. By an arbitration agreement dated 15 June 1973, the parties referred those disputes to R.K. Kamani. The arbitrator made his award on 27 December 1973 and filed the award in this Court on 27 February 1975. The plaintiff moved by Notice of Motion for a decree in terms of that award under s. 17 of the Indian Arbitration Act, 1940. The defendant opposed the motion and raised legal objections, notably contesting (a) the jurisdiction of the Court in which the award had been filed and (b) that the award, insofar as it affects immovable property, required registration under the Registration Act and therefore could not be acted upon. Counsel appearing in the argument were Mr. A.N. Modi for the plaintiff and Mr. Thakkar for the defendant.

Legal Issues Presented

  1. Whether the Court in which the arbitrator filed the award (this Court) had jurisdiction to pronounce judgment and pass a decree in terms of the award, given the location of the immovable properties, the defendant's residence and the cause of action.
  2. Whether the award, insofar as it creates or declares rights in immovable property, required registration under s. 17(1)(b) of the Registration Act and, if unregistered, whether the Court could look into the award or pronounce judgment in accordance with it (having regard to s. 49(c) of the Registration Act).
  3. Whether the words "shall" in s. 17 of the Arbitration Act made the Court's duty to pass a decree automatic once an award is filed in the Court, or whether the Court may suo motu refuse to do so on jurisdictional or other statutory grounds.

Arguments of the Parties

Plaintiff's Arguments (Mr. A.N. Modi)

  • Section 17 of the Indian Arbitration Act uses mandatory language; once the arbitrator filed the award in this Court, the Court must pass a decree in terms of the award.
  • There is no other remedy available to the plaintiff because no petition has been filed to set aside the award.
  • On the registration point: the award does not itself declare rights in immovable property but only directs the execution of a family settlement document (clause 11), and therefore, it is that subsequent document that would require registration, not the award itself.

Defendant's Arguments (Mr. Thakkar)

  • This Court is not the proper Court in which the award should have been filed; therefore it has no jurisdiction to pronounce judgment and pass a decree under s. 17 of the Arbitration Act.
  • Under s. 17(1)(b) of the Registration Act and s. 49(c) of that Act, an award which creates or declares rights in immovable property of value over Rs. 100 requires registration; an unregistered document of that nature cannot be received as evidence and thus the Court cannot act upon it to pass a decree.
  • Authority and precedent were cited to show that where an award is compulsorily registrable and unregistered, the Court cannot make it a decree and may have power to remove such an award from its file.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Gulamali Abdulhussein & Co. v. Vishwambharlal (1948) 51 Bom. L.R. 79 Held that s. 33 of the Arbitration Act does not exhaust the kinds of applications available; s. 32 may leave room for other applications and the Court's inherent jurisdiction. The Court relied on this decision to show that applications under the Arbitration Act can be made beyond s. 33's scope, subject to the limitation that they relate to the bar in s. 32; used as background on permissible applications under the Act.
Jawahar Lal Burman v. Union of India [1962] A.I.R. S.C. 378 Confirmed that s. 32 recognizes the inherent jurisdiction of the Court to entertain applications even where a suit is barred by s. 32; clarified that not all applications are confined to s. 33. The Court treated this Supreme Court authority as binding confirming the principle that certain applications may be entertained despite s. 32; used to frame the limits of permissible applications under the Arbitration Act.
Hastimal Dalichand v. Hiralal (1953) 56 Bom. L.R. 99 Held that where an award directs performance of an act prohibited by law or is patently illegal/void, the Court may suo motu consider the patent defect and refuse to make it a decree; ss.17 and 30 construed as wide enough to include such jurisdiction. The Court extended this principle to hold that it may suo motu consider whether the award was filed in the proper Court (jurisdictional defect) and refuse to pass a decree when jurisdiction is lacking.
Ratan Lal Sharma v. Purshottam Harit, 1974 1 SCC 671 Supreme Court held that an award which purports to create or declare rights in immovable property worth over Rs. 100 requires registration under s. 17 of the Registration Act; an unregistered award is inadmissible in evidence for pronouncing judgment and the Court "could not look into it" or pronounce judgment in accordance with it. The Court treated Ratan Lal Sharma as authoritative and binding on the question of admissibility and consequence of non-registration; applied it to conclude that the present unregistered award could not be the basis for a decree.
Chimanlal v. Dahyabhai (1938) 40 Bom. L.R. 952 Division Bench view that if a compulsorily registrable award is not registered and the Court makes it a decree, the Court acts contrary to s. 49 of the Registration Act. Used to support the conclusion that a Court cannot make an unregistered, compulsorily registrable award into a decree.
Anandi Lal v. Keshavdeo [1949] A.I.R. Cal. 549 Held that in cases where an award relating to immovable property was not registered, the Court has inherent power to remove the award from its file; failure to register is not a ground to set aside the award but may justify removal from the file where appropriate relief is sought. Distinguished on facts (there an express prayer existed) but cited as authority for the view that a Court can remove an unregistered award from its file; the present Court exercised inherent power to order removal suo motu.

Court's Reasoning and Analysis

The Court proceeded in two main analytic strands: jurisdiction (proper Court for filing and passing a decree) and registration (effect of Registration Act on an award affecting immovable property).

1. Jurisdiction and s. 17 of the Arbitration Act:

  • The Court examined the definitions in s. 2(c) of the Arbitration Act (defining "court" as a civil Court having jurisdiction to decide the questions forming the subject-matter of the reference if that matter had been the subject-matter of a suit) and s. 31(1) (an award may be filed in any Court having jurisdiction in the matter to which the reference relates).
  • Mr. Thakkar's contention—that these provisions mean an award can only be filed in the Court where a suit relating to the subject-matter could have been filed—was accepted as a relevant legal proposition and it was factually uncontested that the present Court was not such a Court (properties, defendant and cause of action lay outside this Court's jurisdiction).
  • Although s. 17 uses mandatory language ("shall"), the Court relied on the division bench decision in Hastimal Dalichand to conclude that where an award is patently illegal or directs performance of an act prohibited by law, the Court may, even suo motu, refuse to make it a decree. The Court legitimised a modest extension of that principle to hold that it should consider, on a Notice of Motion for a decree, whether the award has been filed in the proper Court and whether it has jurisdiction to pass a decree.
  • Applying this principle, the Court held that it did not have jurisdiction to pass a decree in terms of the award because the award had been filed in a Court that was not the proper forum for the subject-matter.

2. Registration under the Registration Act:

  • The Court considered cl. (b) of sub-s. (1) of s. 17 of the Registration Act and s. 49(c) of that Act. Section 17(1)(b) makes registration obligatory for instruments that "create or declare any right, title or interest" in immovable property valued over Rs. 100; s. 49(c) provides that no document required to be registered under s. 17 shall be received as evidence of any transaction affecting immovable property unless it has been registered.
  • Mr. Modi's argument that clause 11 of the award merely directed the execution of a family settlement (and that the settlement, not the award, would create or declare rights) was rejected. The Court found clause 11 and clause 12, and annexure III to the award, to be declaratory in nature: they declared rights of the parties in immovable property and made certain persons absolutely entitled to specific immovable properties (e.g., Sushila P. Kamani under clause 12).
  • Because the award itself declared rights in immovable property, the Court concluded that the award was compulsorily registrable under s. 17(1)(b). Following the Supreme Court's decision in Ratan Lal Sharma (binding on this Court), and consistent division-bench authorities (Chimanlal) and the Calcutta decision (Anandi Lal), the Court held that an unregistered award of that character could not be looked into for the purpose of pronouncing judgment and no decree could be passed on it.
  • The Court also observed that it was impossible to separate the "good" part of the award from the "bad" part for the purpose of passing a decree; consequently, the entire application for a decree had to be refused on that ground as well.

3. Remedy and procedural disposition:

  • The Court considered procedural options: simply dismissing the Notice of Motion and leaving the parties to pursue appropriate proceedings to have the award removed from the file and filed in the proper Court, or additionally directing that the award be taken off the Court's file (as in Anandi Lal).
  • While Anandi Lal had an express prayer for removal, in the present case there was none; nonetheless, the Court exercised its inherent power to order that the award be taken off the files, with liberty to the arbitrator or either party to take the award back from the Prothonotary's office to pursue appropriate proceedings elsewhere.
  • The Court expressly declined to make any order as to costs, noting that it was through no fault of the plaintiff that the award had not been filed in the proper Court.

Holding and Implications

Holding:

Notice of Motion dismissed.

Direct consequences and immediate implications:

  • The Court refused to pronounce judgment and pass a decree in terms of the award on two independent grounds: (a) this Court did not have jurisdiction to pass a decree because the award had been filed in the wrong Court, and (b) the award declared rights in immovable property and therefore required registration under s. 17(1)(b) of the Registration Act; being unregistered, it could not be acted upon (s. 49(c)).
  • The Court ordered, in the exercise of its inherent power, that the award filed by the arbitrator be taken off the files with liberty to the arbitrator or either party to retrieve the award from the Prothonotary's office and pursue such proceedings as they may advise (for example, to file in the proper Court or to seek registration as appropriate).
  • No order as to costs was made in favour of either party.

Broader precedent: The opinion applies and follows existing authorities (including a binding Supreme Court decision) on jurisdictional limits and the effect of non-registration of awards affecting immovable property. The Court did not state that it was laying down a new legal principle; rather, it applied established authorities to the facts at hand.


Source: Opinion of Vimadalal, J., as provided. This summary is strictly confined to the material and citations contained in the supplied opinion.

    Smt. Kusumlataben D. Kamani v. Prafulchandra Narbheram Kamani

    Vimadalal, J.:— This is a Notice of Motion for a decree in terms of the award in which some interesting questions of law have been raised on behalf of the defendant who has opposed it. Disputes and differences having arisen between the two parties, as representing two branches of the same family, regarding the estate of the deceased Narbheram, by an arbitration agreement dated June 15, 1973, all those disputes were referred to the arbitration of one R.K Kamani who was respected as the head of the family. The said R.K Kamani made his award on December 27, 1973, the greater part of which has already been carried out. The said arbitrator filed his award in this Court on February 27, 1975, and the present Notice of Motion has thereafter been taken out for a judgment being pronounced in accordance with that award and a decree being passed thereon under s. 17 of the Indian Arbitration Act, 1940. It is the contention of Mr. A.N Modi on behalf of the plaintiff that the terms of s. 17 are mandatory, and that once the arbitrator files his award in this Court, a decree must be passed by this Court in accordance with that award. It is his contention that the arbitrator having filed the award in this Court, the plaintiff has no other remedy, but to apply for a decree in terms of that award, since no petition has been filed to set it aside.

    2. As against these contentions of Mr. Modi, Mr. Thakkar has submitted that no decree can be passed by this Court on the award in the present case for two reasons, viz. (1) this is not the Court in which the award should have been filed, and this Court, has therefore, no jurisdiction to pass a decree in accordance with that award; and (2) in view of s. 49(c) of the Registration Act, the avard, cannot be looked at for the purpose of passing a decree in so far as it is one which operates to affect rights in immoveable property, and, therefore, requires registration under s. 17(1)(6) of that Act.

    3. It will be convenient at the outset to refer to the relevant sections with which I am concerned in this case. Section 2(c) of the Arbitration Act defines the term “court” as meaning a civil Court having jurisdiction to decide the questions forming the subject-matter of the reference, if the same had been the subject-matter of a suit, and s. 31(1) lays down that an award may be filed in any Court having jurisdiction in the matter to which the reference relates. It is the contention of Mr. Thakkar that s. 2(c) read with s. 31(1) must lead to the conclusion that the award can be filed only in the Court in which a suit relating to the subject-matter of the reference could have been filed. His further contention is that s. 17 under which the present application has been made for judgment in terms of the award, itself uses the word “court” which, in the light of s. 2(c) referred to above, means the Court in which a suit relating to the subject-matter of the reference could have been filed, and it is only that Court that is empowered to pass a decree in terms of the award. Mr. Thakkar has pointed out that it cannot be disputed that, on the facts of the present case, a suit relating to the subject-matter of the reference could not have been filed in this Court, since all the properties in dispute are situated outside its jurisdiction, and the defendant also resides outside the jurisdiction of this Court and the whole cause of action has arisen outside it. Indeed, that position has not been disputed by Mr. Modi in the course of his arguments before me. Mr. Modi's sole contention has been, as already stated above, that once the award is filed by the arbitrator in this Court, it is only this Court that can pass a decree in terms of that award, and that there is no other remedy open to the plaintiff. As far as the second part of Mr. Modi's submission in concerned, Mr. Thakkar has drawn my attention to the decision of this Court in the case of Gulamali Abdulhussein & Co. v. Vishwambharlal . 1948 51 Bom. L.R 79. in which a division Bench of this Court has taken the view (at p. 84) that s. 33 of the Arbitration Act does not provide for all kinds of applications, and that it is open to a party to make any application under that Act with regard to which a suit is barred under s. 32 thereof. That view has now been confirmed by the Supreme Court in the case of Jawahar Lal Burman v. Union Of India . . [1962] A.I.R S.C 378, paras. 9-10 and 13-14., in which it has been laid down that s. 32 recognizes the inherent jurisdiction of the Court to entertain applications in matters which fall within the bar of that section. It must, therefore, be regarded as well-settled that an application under the Arbitration Act can be made in matters other than those which would be covered by s. 33 of that Act. It is, however, necessary to bear in mind one little limitation which occurs both in the judgment of this Court in Gulamali's case as well as of the Supreme Court in Jawahar Lal's case, and that is, that an application of any nature can be made under the Act “in matters which fall within the bar created by section 32”. The plain terms of s. 32 show that a suit is barred under that section only for a decision upon the existence, effect or validity of an arbitration agreement or award, or for an order that an award be set aside, amended, modified or otherwise affected. It seems to me to be a matter of some doubt whether the ratio of the decisions in Gulamali's case and Jawahar Lal's case would be applicable to a, case like the present one in which, if the defendant's contentions were to be accepted, the application which the plaintiff would have to make would be to take, the award off the file, as that would be an application which neither affects the existence or the effect or the validity of the arbitration agreement or the award, nor would it be an application to set aside, amend or modify the award or affect it in any manner. It appears to me that to order that an award be taken off the file is not to affect the award itself in any manner. It is, however, not for me to advise what the remedy of the plaintiff is, whether it would be by way of an application of an appropriate nature under the Arbitration Act, or whether it should be by way of a suit or other proceeding. The question as to what is the nature of the remedy available the plaintiff cannot affect the question as to whether, when an award is filed in a wrong Court, as in the present case, that Court can pass a decree on it, or the question as to whether a Court can pass a decree on an award which though compulsorily registrable, has not been registered. I will, therefore, proceed to consider those two questions.

    4. Turning to the first of those two questions, it is true that s. 17 uses the word ‘shall’.in connection with the pronouncing of a judgment in terms of an award and passing a decree thereon, but a division Bench of this Court has laid down in the case of Hastimal Dalichand v. Hiralal . 1953 56 Bom. L.R 99, at pp. 102-104. that if an award directs a party, to do an act which is prohibited by law, or if it is otherwise patently illegal or void, it would be open to the Court to consider that patent defect in the award suo motu, and that the words used both in ss. 17 and 30 of the Arbitration Act are wide enough to include the jurisdiction of the Court to deal with the matters covered by those sections suo motu, though the Court would exercise that jurisdiction rarely and only where the award may be patently illegal and void. The decision of the division Bench in Hastimal Dalichand's case is, however, distinguishable in so for as it cannot be said that the award in the present case is invalid in any respect. It is a perfectly valid award, at any rate, for the purpose of the present Motion in which it was not necessary to go into any grounds that may exist for setting aside the award since that is not the nature of the application before me. In my opinion, however, it would be a legitimate extention of the principle of Hastimal Dalichand's case to apply it to a case like the present one. Applying that principle, I hold that, on a Notice of Motion for a decree in terms of the award, the Court should consider the question whether the award has been filed in the proper Court and whether that Court has the jurisdiction to pass a decree on the award. Even without any independent application being made to take the award off the file, or for similar relief, this Court can, and indeed, should, even suo motu, go into the question as to whether it has the jurisdiction to pass a decree in terms of the award. Holding, as I do, that it has no such jurisdiction in the present case, I must, decline to grant the relief sought on this Motion.

    5. That brings me to the second ground on which Mr. Thakkar has based his opposition to the present Motion, and that is, that the award in the present case requires registration, and being unregistered, no decree can be passed in terms of that award. Reference may be made, in that connection, to two provisions of the registration act on which Mr. Thakkar has relied. The first of these provisions is to be found in cl. (b) of sub-s. (1) of s. 17 of the Registration Act, 1908, which makes it obligatory to register any non-testamentary instrument which, inter alia, operates to create or declare any right, title or interest of the value of over Rs. 100 to or in immoveable property. section 49 of that act lays down, by cl. (c) thereof, that no document which is required by s. 17 to be registered shall be received as evidence of any transaction affecting immoveable property of the value of Rs. 100, unless it has been registered. The proposition that an award which affects immoveable property of the value of Rs. 100 would require registration has not been disputed by Mr. Mody, and it is indeed, too late in the day to do so. He has, however, contended that the present award does not declare any right in any immoveable property, but merely provides, by cl. 11 thereof, that a further document by way of a family settlement is to be executed for partition of an immoveable property known as “Kamani Mansion” at Jamshedpur, and it is the contention of Mr. Modi that it is that document which would create or declare rights in the said immoveable property and would require registration, and not the award which merely provides for the execution of such a document. I do not accept that contention of Mr. Modi, as, in my opinion, cl. 11 clearly declares the rights of the parties in regard to that immoveable property in the manner set out in annexture III to the award, cl. 1 of which provides for a partition on certain terms and subject to certain conditions and limitations. In this connection, it is important to bear in mind that these rights come into existence the moment the award is made declaring, those rights, even though the machinery by way of the execution of a formal document in the nature of a family settlement is intended to follow. There is also cl. 12 of the award which declares that one Sushila P. Kamani who, it may be stated, was not a party to the Reference is to be absolutely entitled to other immoveable properties. Rightly or wrongly, the award, therefore, also declares the right in those immoveable properties and would require registration under s. 17(1)(b) on that ground also as the use of the word “declare” in s. 17(1)(b) as well as the view taken in the cases which, I shall presently cite, show. A provision of the nature that is to be found in cl. 12 which declares a certain person to be entitled to certain immoveable properties would also require that the award containing the same should be registered. I, therefore, hold that the award in the present case is one which requires registration under s. 17(1)(b) of the Registration Act.

    6. There are three cases which were cited before me on this point to which I will now refer. The first and the most important decision to which I will refer is the one in the case of Ratan Lal Sharma v. Purshottam Harit . 1974 1 SCC 671 in which one of the clauses of the award provided that the factory and all the assets and properties of a certain industrial concern were “exclusively allotted”, to one of the parties who would be “absolutely entitled to the same” and would pay all its liabilities. It was held that the award, therefore, purported to create rights in immoveable property worth over Rs. 100 and would require registration under s. 17 of the Registration Act, and that the said award not being registered, was “inadmissible in evidence for the purpose of pronouncing judgment in accordance with it” (para. 3), and the Court “could not look into it” and “could not pronounce judgment in accordance with it” (para. 6). That view was taken by the Supreme Court apparently in view of the provisions of cl. (c) of s. 49 of the Registration Act. Whatever be my own view in regard to the question as to whether an award could be said to be received in evidence within the terms of cl. (c) of s. 49 when the Court is asked to pass a decree according with that award, the view taken by the Supreme Court is clear on that point and is binding upon me, and I must follow the same. In the case of Chimanlal v. Dahyabhai . 1938 40 Bom. L.R 952., the view taken by a division Bench of this Court also was that, if an award which is compulsorily registrable, has not been registered, and the Court in which it is filed makes it a decree of that Court, “it is acting contrary to the provision of s. 49 of the Indian Registration Act” (at p. 955). In the case of Anandi Lal v. Keshavdeo . [1949] A.I.R Cal. 549. also, on an application to set aside the award and/or to have it removed from the file of the Court, it was held that in the case of an award which dealt with immoveable property, but was not registered, the Court has inherent power to remove it from the file of the Court (paras. 57-59). Reference may particularly be made to certain observations in the judgment in the said case to the effect that failure to have the same registered is not a ground on which it could be set aside, but that since there was also a prayer in the petition in the said case that the award be removed from the file that order had to be granted, as the Court need not wait until execution proceedings were adopted and an objection taken to the decree on that ground. Following the view taken by the division Bench of this Court in Ghimanlal's case as well as by the Supreme, Court in Ratan Lal's case, by which I am bound, I must, therefore, hold that no decree can be passed on the award in the present case, as it is one which creates, or declares rights in immoveable property and, therefore, requires registration, but has not been registered. It is impossible to separate the good part of the award from the bad one and, under the circumstances, on that ground also, I must refuse to pass a decree in accordance with the award.

    7. The only other question which survives for my consideration is, what is the form of the order which I should make in this case.

    8. One course which I could follow is merely to dismiss the Notice of Motion and leave the parties to take appropriate proceeding to have the award taken off the file of this Court and filed in the proper Court. The other course, which is it urged I should follow is, that I should not only dismiss the Notice of Motion, but should direct, as was done by the Calcutta High Court in Anandi Lal's case, that the award be taken off the file. It is, however, important to bear in mind that in Anandi Lal's case, there was an express prayer to that effect, whereas if I were to pass such an order in the present case, I would have to do so suo motu, without there being any such prayer before me. As already stated above, it is a matter of some doubt as to what should be the procedure for seeking relief of that nature, whether it should be by way of an application under the Act, or by a separate suit, or in any other manner. Rather than leave the parties to further litigation on doubtful points of procedure, I think the proper course I should adopt is to order that this Notice of Motion be dismissed, and to make a further order in the exercise of my inherent power that the award filed by the arbitrator be taken off the files with liberty to the arbitrator, or to either of the parties, to take the award back from the Prothonotary's office for taking such proceedings in regard to the same as they may be advised. I order accordingly. Having regard to the fact that it is through no fault of the plaintiff that the award has not been filed in the proper Court, I make no order in regard to the costs of the Motion.

    9. Notice of Motion dismissed.

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    Comments

    Smt. Kusumlataben D. Kamani v. Prafulchandra Narbheram Kamani
    (Apr 8, 1976)