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Mulchand Doshi v. Dalam Chand Bengani And Others
Structured Summary of the Judgment
Factual and Procedural Background
This case arises from disputes among four partners (Khin Karan Doshi, Dhanraj Doshi, Mulchand Doshi and Dalam Chand Bengani) of the firm Novelty Engineering Works which were referred to arbitration on 7 August 1974. Two arbitrators appointed an Umpire (appointed 8 August 1974). The Umpire conducted sittings in December 1974, recorded minutes signed by the parties, and on 31 December 1974 made an award which was signed by the parties and by Fulchand Manmal (a creditor who had been added by consent).
The award included (inter alia) an entitlement for Dalamchand Bengani to retire with a specified capital payment; an instruction that a sum of Rs. 1,66,000 lodged with M/s Fulchand Manmal would be repaid by the continuing partners in instalments, with that sum forming a charge on the firm's assets and machinery; and allocations of licences, tenancy rights and other business benefits to the continuing partners. On the date of the award a promissory note of Rs. 1,66,000 was executed by the continuing partners.
Notice of filing the award was given on 6 May 1976. An application to set aside the award was made on 23 June 1976 (contending, among other points, that the award purported to create/assign rights in immovable property exceeding Rs. 100 and therefore required registration; being unregistered it was alleged to be a nullity). The trial Judge rejected that application and passed judgment in accordance with the award. An appeal was preferred and a conditional stay was earlier granted but later vacated for failure to furnish security. The appeal remains pending.
Mulchand Doshi thereafter applied for a determination of the validity, effect and admissibility of the award dated 31 December 1974 and of the judgment and decree passed on 23 March 1977, seeking a declaration that the award was inadmissible for want of registration and that the decree was void, together with consequential reliefs. The learned Judge heard arguments and framed five specific questions for determination arising from that application.
Legal Issues Presented
- Whether the award in question requires registration.
- If the award requires registration, whether the award being unregistered is void or a nullity.
- If the award is a nullity, whether it must be set aside as such and, if so, whether there is any period of limitation for such an application.
- If the award is a nullity, what is the effect of a decree being passed on that award.
- Whether the petitioner (Mulchand Doshi) is entitled, in the facts and circumstances of this case, to have the award or the decree taken off the file.
Arguments of the Parties
Petitioner's Arguments (as recorded)
- The petitioner contended that the award purported to create, declare, assign, limit or extinguish rights, title or interest in immovable properties of value exceeding Rs. 100, and therefore the award required registration under Section 17 of the Registration Act; being unregistered it was bad and a nullity and should not be given effect to.
- At the hearing the petitioner's advocate sought removal of the award from the court file (i.e., that the award be taken off the file).
- The petitioner relied on authorities and submissions that if an act is void it is a nullity and need not be set aside (e.g., Macfoy v. United Africa Co. Ltd., and other decisions), and argued that where an award is unregistered it could be treated as a nullity and therefore not subject to the Section 30 time-limits for setting aside.
- The petitioner also relied on limitation arguments (including reliance on the residuary clause of Article 137 of the Limitation Act) and on various case authorities to support the contention that the present challenge could be entertained notwithstanding the time-limits prescribed under the Arbitration Act.
Respondent / Other Parties' Positions (as recorded)
- It was disputed by respondents that the tenancy/right involved in clause 5 related to immovable property of value exceeding Rs. 100. The respondents contended that clause 5 dealt with partners' shares (moveable property) rather than an interest in immovable property requiring registration.
- With respect to clause 2 (the charge for Rs. 1,66,000), respondents disputed that the property in question was immovable property over Rs. 100 — making the question one of mixed law and fact that required adjudication.
- Earlier in the proceedings the Judge recorded that the petitioner had not made necessary averments to enable a determination on the registration point at the interlocutory stage, and that the registration contention involved mixed questions of law and fact.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| A. Narayanappa v. Bhaskara Krishnappa, AIR 1966 SC 1300 | Held that the interest of partners in partnership assets (including immovable property) is treated as moveable property for purposes of Section 17(1) of the Registration Act. | The Court relied on this authority to support the conclusion that clause 5 of the award (allocations of licences, tenancy rights, etc.) did not necessarily create registrable interests in immovable property and therefore did not, on its face, attract Section 17. |
| Ratan Lal v. Purushottam Harit, (1974) 1 SCC 671 : AIR 1974 SC 1066 | Restated that a partner's share in firm assets is moveable; assignment of such share does not require registration under Section 17. But where an award expressly makes an allotment of partnership immovable assets to a transferee making him absolutely entitled (in consideration of money), the award is registrable. | The Court used this decision to distinguish the present facts: clause 5 did not, on the face of it, transfer immovable property to the continuing partners in the manner requiring registration; however, if there were clear evidence that clause 2 created a charge over immovable property > Rs.100, a different conclusion might follow. |
| Satish Kumar v. Surinder Kumar, AIR 1970 SC 833 | An award on a private reference that effects partition of immovable property exceeding Rs.100 must be registered under Section 17(1)(b); an award creates rights though enforceability may follow only when made a decree. | The Court cited this to explain the test for whether an award purports to create/declare/assign or extinguish a right in immovable property above Rs.100. The Court observed that the principle is not directly decisive here because a factual adjudication is required to determine whether the award triggers Section 17. |
| Saha & Co. v. Ishar Singh Kripal Singh & Co., AIR 1956 Cal 321 (Full Bench) | The Full Bench held that challenges to the existence/validity of an award (including claims of nullity) and applications for setting aside an award must be made under Section 30 of the Arbitration Act within the prescribed time. | The Court applied this Full Bench view to conclude that where a question of registrability is not ex facie apparent and requires adjudication, the procedure under Section 30 must be followed; since the petitioner did not pursue that remedy within the time, he is estopped from now agitating the point. |
| Kerala State Electricity Board v. T.P. Kunhaliumma, (1976) 4 SCC 634 : AIR 1977 SC 282 | Relied upon by petitioner in argument about limitation/residuary limitation provisions. | The Court noted the petitioner's reliance on this authority but held that the route of Section 30 of the Arbitration Act — and the time provided thereby — was the applicable procedure in the present circumstances, rendering the residuary limitation argument inapplicable for present purposes. |
| Macfoy v. United Africa Co. Ltd., (1961) 3 All E.R. 1169 | Lord Denning's dictum that if an act is void it is a nullity and does not require the court to set it aside; sometimes convenient to have a declaration. | The Court recorded this authority as one relied upon by the petitioner, but distinguished it on the ground that the present award was not ex facie or patently void; adjudication was required and therefore Section 30 procedure applied. |
| Nanibala v. Ram Gopal, AIR 1945 Cal 19 | Division Bench held that an award inadmissible in evidence for want of registration must be treated, for the purposes of those proceedings, as not existing. | The Court noted this decision but observed that Full Bench decisions and other considerations require a more nuanced approach where registrability is not self-evident; the present award was not ex facie inadmissible and required adjudication under Section 30. |
| Anandi Lal v. Keshavdeo, AIR 1949 Cal 549 | Observed that failure to have an award registered was not a ground to set it aside. | The Court referred to this view among earlier Calcutta High Court authorities in assessing the procedural posture and the appropriate remedy. |
| Bansilal Bansidhar v. Nandlal, AIR 1975 Madh Pra 25 (Full Bench) | Madhya Pradesh Full Bench held that a decree passed on an unregistered award was not a nullity. | The Court noted this authority (relied on by petitioner) but compared it with the Court's own earlier decisions and Supreme Court precedents; ultimately the judge adhered to his earlier view that where an award is ex facie in violation of Section 17 it is a nullity, but held that the present case did not present an ex facie nullity and required adjudication under Section 30. |
| Moolchand v. Maganlal, AIR 1965 Madh Pra 75 | Full Bench decision of M.P. High Court relied upon in Bansilal case. | The Court noted this decision when discussing the Madhya Pradesh authorities but did not rely upon it to alter the procedural conclusion reached (i.e., Section 30 pathway where registrability is not self-evident). |
| Balabox Singhania v. Smt. Santi Debi (Award Case No. 156 of 1954) | Judge's earlier ruling: an award ex facie and patently in violation of Section 17 of the Registration Act is a nullity and a decree passed on such award is also a nullity. | The present Court adhered to that earlier view but held it did not determine the present case because the award here is not ex facie defective on registration grounds and requires adjudication under Section 30. |
| Vineet Kumar v. Smt. Bhagwandei, AIR 1977 All 403 | Referenced in discussion of authorities relating to registration of awards. | The Court mentioned the decision but stated it was not necessary to refer to it expressly for the conclusion reached in this case. |
| Gangaprasad v. Mt. Banaspati, AIR 1937 Nag 132 | Observed that if an application is made to file an unregistered award which requires registration, the Court must reject it. | The Court cited this observation in support of the proposition that a party who does not raise the registrability objection when the award is filed may be barred from raising it later by principles such as res judicata and finality. |
| Khagendra Nath v. Pran Nath Roy, (1902) 29 Ind. App. 101 | Privy Council observations cited regarding finality of litigation and related considerations. | The Court cited the Privy Council's observations to reinforce the public policy of finality and to support the view that the petitioner should not be permitted to belatedly attack the award. |
| Annamalay Chetty v. B.A. Thornhill, AIR 1931 PC 263 | Privy Council observations on related procedural matters (mentioned by petitioner). | The Court noted the petitioner's reliance on this authority in a submission that the application should be adjourned while appeal was pending, but held the observations were not applicable to the facts here. |
Court's Reasoning and Analysis
The Court proceeded in a stepwise analytical fashion constrained by the factual record and established authorities:
- Identification of the critical portions of the award: the Judge isolated two clauses as central to the registration question — clause 5 (entitlement to licences, tenancy rights, quota rights and benefits of the business) and clause 2 (creation of a charge of Rs. 1,66,000 on the firm's assets and machinery).
- Analysis of clause 5: applying Supreme Court authorities (A. Narayanappa and Ratan Lal), the Court concluded that clause 5, even if tenancy rights related to immovable property of value over Rs. 100, did not necessarily "create or extinguish" an interest in immovable property requiring registration because it treated partners' shares and their incidents as moveable property. On that basis clause 5 did not, on its face, attract Section 17 of the Registration Act.
- Analysis of clause 2: the Court observed that clause 2 — which purported to create a charge of Rs. 1,66,000 on assets and machinery (valued in the award at approximately Rs. 4,00,000) — raised a distinct issue. Whether this charge related to immovable property over Rs.100 was a mixed question of law and fact. The award was not ex facie inadmissible on its face with respect to clause 2; factual adjudication was necessary to determine whether registration was required.
- Procedural pathway for adjudication: the Court examined the proper procedure for challenging the existence/validity of an award. Section 33 of the Arbitration Act empowers a party to apply to the court to decide questions relating to existence or validity of an award; the Court relied on the Full Bench decision in Saha & Co. v. Ishar Singh Kripal Singh & Co. to conclude that where adjudication is necessary on such issues (and the award is not patently invalid), the challenge must be made under Section 30 of the Arbitration Act within the prescribed time.
- Consequence of failing to use Section 30: because the petitioner had the opportunity to apply within the Section 30 timeframe and did not do so in respect of the relevant award challenge, the Court held the petitioner was estopped from later raising the registrability point. The Court emphasized the public policy of finality and the need to respect procedural limits imposed by the Arbitration Act and the Registration Act.
- Distinguishing ex facie nullity: the Court accepted that if an award were ex facie and patently in violation of Section 17, it could be a nullity (and earlier decisions of the Court and Supreme Court support that outcome). However, it held that the present award is not ex facie a nullity; hence the procedural route under Section 30 is applicable.
- Rejection of alternative limitation argument: the petitioner’s submission that an unregistered award (being null) required no setting aside and could be challenged under residual limitation provisions was not accepted because the Court found the proper remedy to be Section 30 when adjudication is necessary.
- Final procedural assessment: on the combined basis that the registrability question required adjudication, that the petitioner failed to pursue the Section 30 remedy in time, and that the award was not patently void on its face, the Court concluded the petitioner could not succeed in asking for the award or decree to be removed from the file.
Holding and Implications
HOLDING: The application is dismissed.
The Court answered the five framed questions succinctly:
- (1) Whether the award requires registration — the Court held that this depends upon adjudication (i.e., it is not self-evident from the face of the award).
- (2) and (3) Whether an unregistered award is a nullity and whether it requires setting aside — the Court observed that while what is a nullity may not require formal setting aside, the award in this case is not ex facie a nullity; hence adjudication under Section 30 is required within the prescribed time.
- (4) Effect of a decree passed on a nullity — the Court found it unnecessary to answer that question for present purposes.
- (5) Whether the petitioner is entitled to have the award or decree taken off the file — answered in the negative.
Direct consequences for the parties:
- The petition by Mulchand Doshi challenging the award's admissibility for want of registration was dismissed with costs.
- The petitioner is estopped from belatedly litigating the registrability point because he failed to use the remedy under Section 30 of the Arbitration Act within the time available and had earlier opportunities in proceedings in which he was a party.
- The appeal against the earlier decision remains pending (the opinion records that a conditional stay had been granted but later vacated for failure to furnish security).
Broader legal implications: The Court adhered to existing authorities (including Full Bench and Supreme Court decisions) in holding that where registrability is not patently determinable from the award itself, the statutory remedy under Section 30 of the Arbitration Act is the appropriate channel. The judgment does not purport to establish a new legal principle; it applies and reconciles prior authorities to the facts before the Court.
Disposition
Application dismissed with costs.
JUDGMENT
1. Disputes and differences arose between Khin Karan Doshi, Dhanraj Doshi, Mulchand Doshi and Dalam Chand Bengani, the four partners of the firm of Novelty Engineering Works. There was an agreement to refer the disputes to the arbitration on the 7th Aug. 1974. The said disputes were, accordingly, referred to the arbitration of two arbitrators and they appointed on the 8th August, 1974 one Umpire. The joint arbitrators having failed to arrive at a unanimous decision, referred the matter to the Umpire. The Umpire on the 5th of December, 1974 wrote to the parties and held sittings. There was a meeting on the 7th of December, 1974. This meeting is recited in the award. The minutes of the meeting were signed by the parties. On the 20th of December, 1974 another meeting was held by the Umpire when all the parties were present and by consent of all the parties M/s. Fulchand Manmal, a firm, which was a creditor of the partnership firm in question, was added as a party to the reference. The said minutes were also signed by all the parties. On the 31st of December, 1974 an award was made by the Umpire. The said award was signed by all the parties as well as by Fulchand Manmal. The award is important for the purpose of examining the contentions of the partners. The award after reciting the facts and circumstances of this case, inter alia, provided as follows:—
“1. I Award that Dalamchand Bengani will retire on and from the 31st day of December, 1974 from the business of Messrs. Novelty Engineering Works and will be paid a sum of Rs. 1,708-74 p. (Rupees One Thousand Seven Hundred Eight and paise Seventy-four) towards his capital and share in the partnership business by the continuing partners in full and final settlement of all his claim. I further Award that a sum of Rs. 1,66,000/- (Rupees One Lac and Sixty-six Thousand), which is lying credited to the firm of M/s. Fulchand Manmal which amount was procured by Shri Dalamchand Bengani for the purpose of the business of Novelty Engineering Works would be paid back by the said firm Novelty Engineering Works and the continuing partners Shri K.K Doshi, Shri M.C Doshi and Shri D.R Doshi for which they have executed a Promissory Note of date in favour of the said Messrs. Fulchand Manmall and the said amount will be repaid by them with interest at the rate of 12% per annum payable every month till the entire amount is paid off. The said entire amount with the interest has been agreed to be repaid by the continuing partners in the following instalments to the said Messrs. Fulchand Manmall:—
Rs. 41,500/- on or before the 31st December, 1975;
Rs. 41,500/- on or before the 31st December, 1976;
Rs. 41,500/- on or before the 31st December, 1977;
Rs. 41,500/- on or before the 31st December; 1978;
2. That the said sum of Rs. 1,66,000/- payable to Messrs. Ful Chand Manmall will form a charge on the assets and machineries of Messrs. Novelty Engineering Works, which are at present valued at Rs. 4,00,000/- (Rupees Four Lacs) approximately and the same shall be deemed to be charged for payment of Rs. 1,66,000/- with interest, but for the purpose of their business the continuing partners shall be entitled to create charge with any Bank or financial institution. A list of assets and machineries are shown in the Schedule hereunder written and the said continuing partners will not do or cause to be done any act whereby the security is in any way impaired and/or jeopardised and/or reduced. In default of payment of any instalment the said Messrs. Fulchand Manmall may take steps for realisation of the money in any manner they may like. That upon payment of the dues of Sri Dalamchand Bengani, he will cease to be partner and will sign the necessary Deed of Retirement and will also cease to have any right, title and interest of any nature whatsoever in the partnership assets and properties.
3. That the continuing partners will share profit and losses in future in equal shares.
4. That the continuing partners shall be entitled to all licences, tenancy rights, quota rights, benefits of pending contracts, book-debts and good-will, telephone connections, machineries, stock, furnaces, sheds etc. of the said business as going concern.
5. That the continuing partners shall bear and pay all the liabilities statutory or otherwise arising out of all or any of the transactions done or otherwise upto the date of retirement of Dalamchand Bengani and shall keep the said Dalamchand Bengani indemnified against any claim or demand in respect thereof and/or arising therefrom.
6. That each of the partners shall bear and pay their respective income-tax liabilities.”
2. Thereafter the Umpire wrote on the 31st of December, 1974 to all the parties including Fulchand Manmall informing them that he had made the award. In implementation of the award on the same day a promissory note of Rs. 1,66,000/- was executed on the 31st of December, 1974 by Khin Karan Doshi, Dhanraj Doshi, and Mulchand Doshi in favour of Dalam Chand Bengani by way of security for the payment of the sum of Rs. 1,66,000/- by the firm of Novelty Engineering Works to Fulchand Manmall. On the 6th of May, 1976 notice of the filing the award was served on all the parties. Thereafter, an application was made on the 23rd of June, 1976 by Khin Karan Doshi and another for setting aside of the award. It was contended, inter alia in the said application that the award purported to create, declare or assign or limit or extinguish the right, title or interest of the parties in the immoveable properties of the value of more than Rs. 100/- and, therefore, the award required registration. It was submitted that the award being unregistered was bad and a nullity and, therefore, should not be given effect to and should be set aside. I rejected the said contentions on the grounds inter alia, that there was no necessary averment to indicate that the award in question dealt with the rights of the parties in immoveable properties of the value of more than Rs. 100/-. I held that in this case this contention involved mixed questions of law and facts and in the absence of necessary averments it was not possible to go into that question in that application. I, further, held that so far as interest and rights are concerned, on the retirement of a partner the other two partners became entitled to the share of the outgoing partner. Therefore, from that point of view, in my opinion, it did not require registration. Accordingly the application was dismissed by me and judgment in accordance with the award was passed.
3. An appeal has been preferred from the said decision of mine and I am told that an application for stay was made before the Division Bench of this Court. The Division Bench granted a conditional stay upon furnishing certain security. On the failure of the appellant to furnish security required of it the stay was vacated. The appeal, however, is pending.
4. In these circumstances, Mulchand Doshi has made this application for determination of the validity, effect and admissibility of the award dated the 31st of December, 1974 and the judgment and decree passed on the 23rd of March, 1977 and for a declaration that the award was inadmissible for want of registration and accordingly the decree was void and for other consequential reliefs.
5. At the hearing of this application learned advocate for the petitioner contended that he was asking that the award be taken off the file or removed from the record. In this application, in my opinion, the following questions fall for consideration:—
(1) Whether the award in question in the instant case requires registration?
(2) If the award requires registration, then the award being unregistered, is it void or a nullity?
(3) If the award is a nullity, then does it require to be set aside as such and if so, is there any period of limitation for such an application?
(4) If the award is a nullity, then what is the effect of decree being passed on that award?
(5) Whether the petitioner is entitled, in the facts and circumstances of this case, to ask for the order that the award or the decree be taken off the file?
6. The first question as mentioned hereinbefore, is whether the instant award requires registration. There are two clauses of the award upon which the contention that the award is bad because of non-registration is made, namely clause 2, which stipulates that the said sum of Rs. 1,66,000/- payable to M/s. Fulchand would form charge on the assets and machinery of M/s. Novelty Engineering Works, which are at present valued at Rs. 4 lakhs and the same should be deemed to be charged for payment of Rs. 1, 66,000/-, a list of assets and machinery having been annexed in the award, and the 5th clause which declares that the continuing partners shall be entitled to all licences, tenancy rights, quota rights etc.
7. So far as the clause 5 of the said Award is concerned, it has been alleged on behalf of the petitioner that the tenancy right involved in this matter was in respect of immoveable property of the value of Rs. 100/- and more. That point, however, is disputed. Assuming that the tenancy right was for the value of Rs. 100/- and more, clause 5 in my opinion, does not create or extinguish any charge or interest or right in the immoveable property of the value of Rs. 100/- and more, when on the retirement of a partner, the other partners became entitled to the share of the outgoing partners. Such an adjustment in the award dealing with the assets of the partnership firm, in my opinion, does not affect immoveable property but only partners' shares in the firm which are moveable properties. In this connection, reference may be made to the observations of the Supreme Court in the case of A. Narayanappa v. Bhaskara Krishnappa, reported in AIR 1966 SC 1300 at p. 1304. There the interest of the partners in a partnership assets comprising of an immoveable property was treated as moveable property and it was held that the document dealing with the same did not involve the question of registration under Section 17(1) of the Registration Act. The same view was reiterated by the Supreme Court in the case of Ratan Lal v. Purushottam Harit reported in (1974) 1 SCC 671 : AIR 1974 SC 1066. There the Supreme Court observed that it was well settled that the share of a partner in the assets of the partnership which had also immoveable properties was moveable property and the assignment of the share does not require registration under Section 17 of the Registration Act. Clause 5 in the instant award even assuming that the tenancy right was in respect of immoveable property over the value of Rs. 100/- does not, in my opinion, therefore, attract the question of the applicability of Section 17 of the Registration Act. In the aforesaid decision the Supreme Court observed that where the terms of the arbitration award did not transfer the share of a partner A in the assets of a firm to the other partner B either expressly or by necessary intendment but on the other hand expressly made an allotment of the partnership assets and liabilities to B making him absolutely entitled to the same in consideration of a sum of money to be paid by him to the other partner A, thereby expressly purporting to create rights in immoveable property of the firm worth above Rs. 100/-, the award was compulsorily registrable under Section 17 of the Registration Act and, if unregistered, could not be looked into and the court could not pronounce judgment in terms of the award under Section 17 of the Arbitration Act. Therefore, in the instant case if there was clear evidence that the property in respect of which charge or right was created was in respect of immoveable property of the value of more than Rs. 100/- then the position would have been different. I have noted in the previous decision of mine in the case of the instant award that so far as clause 5 of the instant award is concerned, the facts of the present case are distinctly different from the facts before the Supreme Court in the last mentioned decision, upon which reliance was placed in the previous application and reliance has been placed in this application also on behalf of the petitioner. I adhere to the said view I have taken on this aspect of the matter.
7. The other part of the Award, namely - Clause (2), however, is different. This involves the question of creating a charge in favour of M/s. Ful Chand Manmal. Therefore, if the charge is in respect of immoveable properties over the value of Rs. 100/-, then this charge under Section 17 of the Registration Act should have been registered. As I have noted before in the previous decision of mine on this matter that this aspect involves mixed question of law and fact in the sense that it involves the question whether the property in question in respect of which charge has been created was immoveable property worth Rs. 100/-. In the petition the petitioner has averred to that effect and the same has further been disputed by the respondent. It is clear, however, that the award as such ex facie or patently is not inadmissible nor bad for lack of registration. In order to determine whether the award is bad or not it is necessary to adjudicate whether the property in question in respect of which charge has been purported to be created is immoveable property over Rs. 100/- or not. If such a determination is necessary then the question is whether that determination can be made at this stage in the application by the petitioner. Section 33 of the Arbitration Act provides that a party to an arbitration agreement or any person claiming under him desiring to challenge the existence or the validity of arbitration agreement or an award or to have the effect of either determined shall apply to the court and the Court shall decide the question. Here the existence of the award and the right of the petitioner to have it removed from the file are being sought for and that depends on the determination of the question whether the properties involved in clause 2 of the award are immoveable property or moveable assets and whether the value is for Rs. 100/-. Is there any procedure, apart from or independent of Section 30 of the Arbitration Act, by which this challenge can be entertained or this dispute can be resolved? It was submitted that what was an unregistered award was a nullity and what was nullity did not require to be set aside and as such there was no question of any application under Section 30 of the Arbitration Act being made within the time prescribed for the same. If there was no scope for an application under Section 30 of the Arbitration Act within the time prescribed, then for an application of this nature, it was contended, in view of the facts and circumstances of this case, under the residuary clause of Article 137, of the Limitation Act and three years' period of limitation would be applicable. Reliance in this connection was placed on the observations of the Supreme Court in the case of the Kerala State Electricity Board, Trivandrum v. T.P Kunhaliumma reported in (1976) 4 SCC 634 : AIR 1977 SC 282. My attention was also drawn to the often quoted dicta of Lord Denning in the case of Macfoy v. United Africa Co. Ltd. reported in (1961) 3 All E.R 1169 at p. 1172 that if an act was void then it was in law a nullity and there was no need for an order of the court to set it aside. It was automatically null and void without more ado, though as Lord Denning observed sometimes it was convenient to have the court declare it to be so. To the similar effect are the observations of this Court in the case of Nanibala v. Ram Gopal reported in AIR 1945 Cal 19 at p. 22 where the Division Bench observed that as the award was inadmissible in evidence by reason of the provisions of the Registration Act, and therefore, on the principle that “of things that do not appear and things that do not exist the reckoning in a court of law was the same” it must be taken so far these proceedings are concerned that the award did not exist. The Court further observed that no question of either setting it aside or of remitting it to the arbitrators would arise in such circumstances. Mr. Justice Gentle in the case of Anandi Lal v. Keshavdeo, reported in AIR 1949 Cal 549 observed that failure to have the award registered was not a ground upon which it could be set aside.
8. This question so far this Court is concerned, has to be viewed in the light of the decision of the Full Bench of this Court in the case of Saha and Co. v. Ishar Singh Kripal Singh and Co. reported in AIR 1956 Cal 321 where the majority of the three of the learned Judges came to the conclusion that in the Indian Arbitration Act there was no distinction between the application for setting aside of an award and an application for adjudgment of the award to a nullity and all applications must be under S. 30 within the time stipulated for that application. The existence of an award and validity of the reference both have to be challenged in the same manner. Learned advocate for the petitioner, however, drew my attention to the judgments delivered by the learned Judges in the said Full Bench and submitted that Chief Justice Chakrabortti and Mr. Justice Lahiri were of the view that after an award had been made, all grounds of objection to the award including the grounds of non-existence and/or validity of the agreement or reference and/or other grounds must be taken in an application for setting aside the award and any ground not so taken would not be available after the expiry of the time for making such an application. Mr. Justice S.R Dasgupta and Mr. Justice Bachawat held contrary views that what was nullity could not be set aside. According to the learned advocate for the petitioners Mr. Justice P.B Mukharji, who agreed with the majority view, did not expressly deal with the question whether an unregistered award could be set aside or not. He drew my attention to the observations of His Lordship appearing at page 344 of the report where his Lordship observed that no question of registration of an award arose in the Full Bench reference and, therefore, he did not wish to say what the effect of an unregistered award was and would not make any observation on the point whether an unregistered award could not be set aside. His Lordship further expressed his opinion that the said doctrine may have to be more critically examined in the light of many other considerations under the Arbitration Act, 1940 and did not seem to be at one with the observations of the Division Bench of this Court in the case of Nani Gopal Saha v. Ram Gopal Saha reported in AIR 1945 Cal 19 and his Lordship seemed to agree with the view with Sir John Beaumont that an appropriate proceeding might be necessary to challenge the validity of the reference in certain cases.
9. Whatever may be the position in case of an award which is patently and ex facie bad because of non-registration, in this case an adjudication is necessary to find out whether the award requires registration or not in order to give effect to it. I need not go into the question whether in case of an award which is ex facie or patently bad the same could be set aside or required to be set aside and if so whether there is any procedure of setting aside apart from or independent of Section 30 of the Arbitration Act. For the purpose of this application it is sufficient, in my opinion to proceed on the basis that where the question whether an award requires registration or not has to be adjudicated and the award is not ex facie or patently clear on that aspect; in such a case an adjudication that goes to the existence of the award must only be by the procedure enjoined by Section 30 of the Arbitration Act as held by the Full Bench decision of this Court. If that is the position then the petitioner in this case had sufficient time to make the application within the time provided under S. 30. The petitioner chose not to apply to have the existence of the award determined and therefore, in my opinion, the petitioner is now estopped from agitating that question now.
10. It was urged that the award in question was not a nullity and reliance had been placed on the decision of the Full Bench of the Madhya Pradesh High Court in the case of Bansilal Bansidhar v. Nandlal, reported in AIR 1975 Madh Pra 25. There, the Madhya Pradesh High Court held that the decree passed on an unregistered award was not a nullity. A Division Bench of the Madhya Pradesh High Court proceeded to come to this conclusion on a Full Bench decision of the same High Court in the case of Moolchand v. Maganlal, reported in AIR 1965 Madh Pra 75. The last mentioned decision of the Full Bench of the Madhya Pradesh High Court was considered by me in the case of Balabox Singhania v. Smt. Santi Debi in Award Case No. 156 of 1954. The judgment was delivered on 4th July, 1977 where I have held that in view of the public policy involved in the prohibition under Section 17 of the Registration Act and in view of the decision of the Supreme Court in the case of Ratanlal v. Purushottam Harit reported in (1974) 1 SCC 671 : AIR 1974 SC 1066 and in the case of Satish Kumar v. Surinder Kumar reported in AIR 1970 SC 833 an award which is ex facie and patently in violation of Section 17 of the Registration Act was a nullity and a decree passed on such an award was also a nullity. There, of course, no question arose as to whether the award required registration because property involved was immoveable or moveable asset. I adhere to this view but the same principle would not apply in the instant case as mentioned before because in this case an adjudication is necessary to determine whether the award deals with immoveable properties or moveable assets and such an adjudication on the award must be by the procedure under Section 30 of the Arbitration Act.
11. In the case of Satish Kumar v. Surinder Kumar reported in AIR 1970 SC 833 the Supreme Court held that an award given under the Arbitration Act on a private reference required registration under Section 17(1)(b) of the Registration Act, if the award effected partition of immoveable property exceeding the value of Rs. 100/-. The award was not a mere waste paper but had some legal effect. It was final and binding on the parties and it could not be said that it was a waste paper unless it was made a rule of the Court. The award created rights in property but those rights could not be enforced until the award was made a decree of the Court. It was one thing to say that a right was not created, it was an entirely different thing to say that the right created could not be enforced without further steps. For the purpose of Section 17(1)(b) of the Registration Act, all that was necessary was whether the award purported or operated to create or declare, assign, limit or extinguish whether in present or future any right, title or interest whether vested or contingent of the value of one hundred rupees and upwards to or in immoveable property. If it did, it was compulsorily registrable. S. 17 did not concern itself with the enforcement of rights. This principle however in my opinion is not involved in this case. As I have mentioned before here that an adjudication is necessary to determine whether the award requires registration in order to become enforceable or to be valid. In the aforesoid view of the matter it is not necessary for me to refer to a decision in the case of Vineet Kumar v. Smt. Bhagwandei reported in AIR 1977 All 403 and ILR July 725 at pp. 734 and 735. I need only refer to the observations of Mr. Justice Vivian Bose in the case of Gangaprasad v. Mt. Banaspati reported in AIR 1937 Nag 132. In an application made to the Court to file an unregistered award which required registration. His Lordship has observed that if an application was made to the Court to file an unregistered award which required registration then the Court must reject it.
12. Therefore, that was one of the grounds it could be urged against the filling of an award and if that was not urged and the award was filed then the question was barred in a subsequent suit on the principles of res judicata. In the instant case the petitioner was a party to the proceedings taken up by Shew Karan Doshi in the Award Case No. 54 of 1976 and the petitioner did not take this point. Therefore the petitioner, in my opinion, cannot now be allowed to take this point again. Furthermore, the petitioner had 30 days' time to make an application under Section 30 of the Arbitration Act independently to challenge the existence of the award which the petitioner did not choose to do. Therefore, in my opinion, the petitioner should not be allowed at this stage to agitate this question again. The prohibition contained under Section 17 of the Registration Act is for public policy and that policy intends the Court to ignore or not to take any notice of the unregistered award. Another important public policy is to insist on the finality of the litigation. This compels the Court to disallow the petitioner in its belated attempt to challenge again the existence of the award which could have been challenged in the proceeding in which he was a party and which independently could have been challenged by him again. In this connection reliance may be placed on the observation of the Privy Council, Khagendra Nath v. Pran Nath Roy, (1902) 29 Ind. App. 101 at p. 106.
13. Learned advocate for the petitioner, however, drew my attention to the observation of the Privy Council in the case of Annamalay Chetty v. B.A Thornhill reported in AIR 1931 PC 263. It was submitted that the appeal is pending. This application should be adjourned. Here the question is whether the petitioner independently has any right to challenge the existence of the award beyond the time provided for in an application under Section 30 of the Arbitration Act. In that view of the matter, in my opinion, the observations of the Judicial Committee would not be applicable to the facts of the instant case.
14. In the light of the above conclusions I answer the questions posed in the beginning as follows:—
(1) Whether the award requires registration depends upon adjudication. (2) and (3) Though what is nullity may not require to be set aside but ex facie the award in the instant case cannot be said to be nullity and it must be adjudicated within the time prescribed for S. 30 application. (4) This question is not required to be answered in the view taken. (5) This question must be answered in the negative. Before I conclude I must observe that legal conclusions on the questions involved are fortified by the feeling that the justice of the case and the merits of the case do not deserve any other conclusion.
15. In the aforesaid view of the matter this application fails and is accordingly dismissed with costs.
16. Application dismissed.
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