Anandi Lal Poddar v. Keshavdeo Poddar

1. This application arises out of an arbitration between ten partners of a firm known as Tarachand Ghyanashamdas. The partnership for merely carried on businesses at Calcutta, Bombay, Madras, Karachi and Delhi and at branches and agencies of those places. The main part of the undertaking was a banianship business for Burma Shell Oil Storage and Distributing Co. of India Ltd. (to which further reference is not necessary), and a similar business for Messrs Shaw Wallace & Co. In regard to the latter there were more than 130 agencies. The partnership also bought and sold various kinds of goods and commodities, including purchases from the above company and firm. The partnership terminated on 31st December 1934. The partners owned shares of varying values in the partnership, the exact proportions are not material. In the award the partners are referred to as parties Nos. 1 to 10, and it is convenient so to refer to them. The applicant is party No. 10. That other parties are the respondents. The respondents, who are parties Nos. 8 and 9, support the application and together with No. 10 they are members of one family. The remaining parties Nos. 1 to 7 are members of another family and jointly oppose the application.

2. By an agreement in writing made between the partners dated 20th December 1934 it was recited, that differences had arisen amongst themselves regarding the adjustment of the partnership accounts and division of the partnership assets, and it was, inter alia, agreed that:

“All differences and matters in dispute between the paties hereto, relating to their partnership business at Calcutta, Bombay, Madras, Karachi and Delhi and the branches and agencies thereunder up to 31st December 1934 and the assets and accounts thereof are referred to the said arbitrators. The submission will not include the question of allotment of agencies or businesses as made or to be made by Burma Shell Oil Storage Co. of India Ltd. and Messrs Shaw Wallace & Co.”

3. The names of the two arbitrators were else-where stated in the arbitration agreement. The award is dated 24th December 1935 and is signed by the two named arbitrators. Between that date and 13th January 1945 one of the arbitrators died. On the latter date, the surviving arbitrator filed the award in this Court, notice of which was duly given to the parties. The arbitration was held pursuant to the provisions of the Indian Arbitration Act 1899, which was in force at the date when it took place.

4. By the award the arbitrators found and/or held and/or directed and/or awarded that: 3. The partnership carried on the following businesses: (i) The banianship for the Burma Shell Co. in areas described as Calcutta, Bombay, Madras, Karachi and Delhi in each of which there were several sub-agencies and in some of those other persons were admitted as working partners; (ii) banianship with Messrs Shaw Wallace; (iii) other miscellaneous businesses at Calcutta, Bombay, Karachi and other places; (iv) Khajanchiship of the Imperial Bank, Burra Bazar Branch (Calcutta) under the name of Joynarain Ram Chunder; (v) Owning Joyrampore and Khas Joyrampore collieries and carrying on colliery business under the name of Tarachand Ghanashyamdas; (vi) Owning and managing immoveable properties: (a) Kalichowki, Bombay; (b) & share in land at Kurla, Bombay, (c) 26 Middle Road, Entally, Calcutta 4. The shares of the respective parties in the several businesses were set out 6. The parties, by mutual consent, dissolved the partnership with effect from 31st December 1934 and had already divided amicably the agency businesses from 1st January 1934 in accordance with schs. A and B to the award, namely, 31 agencies to Nos. 8 to set out in Sch. A and the agencies (over 100 in number) to Nos, 1 to 7 as set out in Sch. B.7 The assets relating to the agency businesses and the rest of the businesses and the assets of the partnership remained undivided and the partnership accounts and affairs remained to be adjusted and divided. 9. The immoveable properties appertaining to the said 81 agencies be allotted to Nos. 8 to 10 to be used and enjoyed, owned and possessed by them in severalty and absolutely. 10. There be allotted to nos. 1 to 7 the businesses of the partnership at Calcutta, Bombay, Madras, Karachi and Delhi and the said collieries and colliery business together with, inter alia, the immovable properties appertaining to the several businesses and to the collieries, which should belong to and be enjoyed owned and possessed by nos. 1 to 7 absolutely, 11. The entire banianship business of Messrs Shaw Wallace including Indo Agri. Ltd., had been and was thereby allotted to Nos. 1 to 7, 12. The Khajanchiship business of the Imperial Bank was allotted to nos. 8 to 10, 13. The three immovable properties, Kalichowki at Bombay, share in the Kurla land at Bombay and No. 26 Middle Road, Entally, Calcutta, were valued at the sums therein specified and were allotted to nos. 1 to 7 absolutely to be used, enjoyed, owned and possessed by them in severalty. 14. The share or interest of Nos. 8 to 10 in the three immovable properties mentioned in para. 18 had been valued at Rs. 90,000 and had been taken into account in the adjustment of accounts between the parties and the division of the partnership asset between them. If desired by Nos. 1 to 7, and at their cost, Nos. 8 to 10 would execute the necessary release, transfer and assurance in favour of Nos. 1 to 7, 21. The partnership had set apart various sums from time to time for the purpose of charity and all parties desired that the shares of the companies therein stated together with cash amount of Rs. 8500 to be paid by Nos. 1 to 7, of the total value of Rs. 51,238/12 be set apart for such charitable purposes as the arbitrators might think fit and they should nominate trustees and frame a schema for the purpose and deliver the trust property to the person named therein for the purpose of the same being handed over to the trustees named by the arbitrators. 24. If necessary, mutual releases and assurances, powers of attorney and all documents should be executed by all parties for more fully and effectually out the directions contained in the and/or vesting the properties in the parties to whom they, had been respectively allotted.

5. The present application is to set aside the award and/or to have it removed from the file of the Court.

6. The grounds of the application are that: (1) The award is bad since it was filed by one of two arbitrators. (2) The arbitrators had no jurisdiction to deal with the immovable properties since they are all outside the jurisdiction of this Court. (3) The award cannot be filed in this Court since all the immovable properties with which it deals are outside its jurisdiction. (4) The arbitration agreement excluded the agencies, but the arbitrators have purported to divide and allot the agencies among the parties. (5) The award is incomplete since it does not deal with matters reserved in another arbitration agreement between the same parties in respect of the Madras business. (6) All necessary parties were not parties to the arbitration. (7) The arbitrators exceeded their powers by allotting to Nos. 1 to 7 assets, including the immovable properties, which did not belong to the partnership. (8) The award purports to create a trust. (9) The award is required to be registered under the provisions of the Registration Act since it deals with the right, title or interest of the parties in immovable properties.

7. It is convenient to deal seriatim with the above matters.

8. (1) The award filed by one of two arbitrators.

9. Under the rules of this Court, made pursuant to Section 20 of the Arbitration Act of 1899, it is provided in chap. 23, R. 12 that where the arbitrators have been requested to file the award they shall cause the award to be filed in the Court. It was contended that the rule requires both arbitrators to perform the actual act of filing and since one of the arbitrators died between the date when both of them signed the award and the filing of it by one arbitrator there has not been compliance with the rule and the award has not been filed in accordance with the provisions of the rule.

10. If, in the case of an arbitration by more than one arbitrators, one of the arbitrators should the after all have signed an award, but before it has been filed and, if it is necessary that all the arbitrators must file an award, then it must follow that such an arbitration will become abortive since it is impossible, in such a case, for all arbitrators to file the award. The rule does not require the arbitrators to file the award but they must cause it to be filed. Whilst a deceased arbitrator, after his death, cannot cause an award signed by himself and a surviving arbitrator or surviving arbitrators, to be filed, does the happening of his death after signature and before filing, in effect, render the arbitration abortive? In my view it does not. In causing an award to be filed the arbitrators do not perform a judicial act but one of a ministerial nature. Although the Rule speaks of arbitrators causing the award to be filed, the ministerial act of filing can properly be carried out by one of their number. This was the view expressed by the said Judicial Commissioners Court in Shamdas Teumal v. Khimanmal Chandumal, 29 I.C 602 : (A.I.R (1) 1914 Sind 90), with which decision I venture to agree. The failure or omission or inability of one of several arbitrators to participate in the ministerial act of filing an award by his co-arbitrator or co-arbitrators is not an irregularity which vitiates the proceedings or the award provided, as in the present case, there is an absence of any circumstance or fact such as fraud, connected with the act of the filing.

11. (2) The arbitrators had no jurisdiction to deal with the immovable properties of the partnership as they are situate outside the jurisdiction of this Court. (3) The award cannot be filed in this Court since all the immovable properties with which it deals are situate outside its jurisdiction.

12. These two questions can conveniently be considered together since the answer to each is dependent upon the same facts, circumstances and legal provisions; but this is subject to the necessity or otherwise for the award to be registered and with which I will deal later.

13. In order to consider these two questions reference is necessary to the material provisions of Section 2 of the Arbitration Act of 1899 and to cl. 12, Letters Patent of this Court, which are as follows:

Section 2.—“…. The Act shall apply only in cases where, if the subject-matter submitted to arbitration were the subject of a suit, the suit could, whether with leave or otherwise, be instituted in a Presidency Town.”

Clause 12—“The High Court of Judicature at Fort William in Bengal…. shall be empowered to try, receive and determine suits of every description, if, in the case of suits for land or other immoveable property, such land shall be situated…. either wholly, or, in case leave of the Court shall have been first obtained, in part, within the local limits of the ordinary original jurisdiction of the said High Court.”

14. These two provisions being construed together, it is clear that if and when the subject-matter of an arbitration is land or immovable property none of which is situated within the Court's jurisdiction, then the arbitrators would not have jurisdiction to hear the arbitration. If, however, the land or immovable property, the subject-matter of the proceedings, is situated partly within and partly without the jurisdiction, in the event of a suit, the Court would have jurisdiction provided its leave is obtained before the institution of the suit. Consequently, in the same circumstances, the arbitrators would likewise have jurisdiction to hear the arbitration since S. 2 provides that the Act applies when a suit could be instituted in the Court whether with leave or otherwise.

15. One of the assets of the partnership was a mortgage decree which was obtained by the partnership in Suit No. 2188 of 1928 in respect of inter alia, an immovable property situated within the jurisdiction. It was conceded, by learned counsel for parties Nos. 8 to 10, that if a, mortgage decree is immovable property then the arbitrators had jurisdiction to hear the arbitration and also there can be no objection to the filing of the award in this Court on the ground of want of jurisdiction. But it was contended a mortgage decree is not immovable property.

16. In the past, there was a conflict of opinion between several High Courts in India, whether a mortgage decree should be regarded as movable or as immovable property. Before, referring to the authorities in which these opinions are expressed it is necessary to set out the provisions of Section 17, sub-Section (1), sub-clause (b) of the Registration Act, 1908 and also sub-cl. (e) which was added to and included in the same sub-section by Section 10 of the Transfer of Property (Amendment) Supplementary Act of 1929. These provisions are as follows:

“Section 17, (1) The following documents shall be registered, (b) other non-testamentary instruments which, purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property (e) Non-testamentary instruments transferring or assigning any decree or order of a Court or any award when such decree or order or award purports or operates to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immoveable property.”

17. The Bombay High Court held that an assignment of a mortgage decree required registration, the reason being that it gives the assignee the right to sell the immovable property covered by the decree which right is a right to an interest in such property and falls within S. 17, sub-s. (1), cl. (b). Opinions to the contrary were expressed in this and in the Allahabad High Courts vide Gous Mahomed v. Khawas Ali Khan, 23 Cal. 450 and Abdul Majid v. Mahammad Faizullah, 13 All. 89. There are other decisions to the same effect by these two Courts to which reference is not necessary. The controversy has now been settled in favour of the opinion of the Bombay High Court by the amendment to S. 17, sub-s. (1) when sub-cl. (e) was added in 1929; the wording of this sub-clause follows that of sub-cl. (b). By virtue of the amendment an assignment of a mortgage decree is placed in the same category as instruments falling within the other sub-clause. When a final mortgage decree is passed it declares the mortgagee's rights in the mortgaged property and thus it comes within sub-cl. (b), but the decree itself is not a document which requires to be registered because of the exemption contained in sub-cl. (vi) of sub-s. (2) of S. 17 which enacts that:

“17. (2) Nothing in cl. (b) of sub-S. (1) applies to (vi) any decree or order of a Court except a decree or order expressed to be made on compromise and comprising immoveable property other than that which is the subject-matter of the suit or proceeding.”

18. It is clear, however, from sub-cl. (e) of sub-s. (1) that an assignment of a mortgage decree requires to be registered the reason being that the subject-matter of assignment namely the mortgage decree, does purport or operate to the effect stated in sub-cl. (b) and the assignment itself must also so purport or operate.

19. The effect of the amendment to the Registration Act by the addition of sub-cl. (e) is discussed and explained in Pandit Shiva Rao v. Shanmugha Sundara Swami, I.L.R (1940) Mad. 306 : (A.I.R (27) 1940 Mad. 140). In my view, this amendment has the effect of overruling the earlier decision of this and the Allahabad High Courts and which therefore I should not follow. I am of opinion that both a mortgage decree and an assignment of it are immovable properties. It follows that, since the decree was passed by this Court, part of the immovable properties, which are the subject-matter of the arbitration, being situated within its jurisdiction the Court could have given leave under cl. 12 of the Letters Patent for a suit to be filed in which the same matters would have been in issue as were in contest in the arbitration and consequently the arbitrators had jurisdiction to hear the arbitration and also there is jurisdiction in this Court for the award to be filed in it.

20. (4) The arbitration agreement excluded the agencies but the arbitrators have purported to divide and allot the agencies amongst the parties.

21. In the course of argument it was stated, and it is common ground, that Messrs Shaw Wallace had themselves re-allotted the agencies formerly held by the partnership to Nos. 8 to 10 and Nos. 1 to 7 as set out in schs. A and B respectively of the award.

22. Since the partnership had been their agent and it had come to an end, this is the course which one would expect Messrs Shaw Wallace to follow and that they would appoint new agents of their respective agencies as their own wishes and requirements dictated and not expect to see the agencies farmed out among themselves by the retiring partners of the defunct partnership. The individual partners of the late partnership, or rather, the two groups which the partners had formed and of which they were the members for the purpose of conducting business in the future, would have to accept the new appointments or re-allocations and would have to agree to take the agencies given to their respective groups by Messrs Shaw Wallace. It is not correct for it to be said that the parties had divided the business of the agencies amongst themselves, but, in my view, this error does not make the award bad.

23. Clause 1 of the arbitration agreement expressly excepted from the submission the question of the allotment of agencies. Complaint is made that in cl. 11 of the award, the arbitrators went beyond their powers by purporting to allot to nos. 1 to 7 the entire banianship business of Messrs Shaw Wallace and, it is contended, in this respect the award is bad upon its face and therefore should be set aside.

24. In cl. 6 it is recited that the parties had already amicably divided the agency businesses with effect from 1st January 1936 as set out in Schs. A and B. Clause 7 recites that the assets of the agencies remained undivided and the partner, ship account remained to be adjusted. In cl. 9 the partners' shares in the asset including the immovable properties appertaining to the 31 agencies allotted to Nos. 8 to 10 were allotted to them, to be used and enjoyed and possessed by them in severalty and absolutely and they were to discharge the partnership liabitities of those agencies. These assets and liabilities are set out in sch. C to the award. Clause 9 does not purport to allot 31 agencies to Nos. 8 to 10. By cl. 10, omitting immaterial parts, the arbitrators awarded the share and interest of the partnership in the assets including the immovable properties appertaining to the said agency businesses allotted to and taken over by Nos. 1 to 7 as thereinbefore stated (that is in cl. 6) and including the assets mentioned in Sch. D which contains the assets and liabilities of the partnership including all immovable properties (not mentioned in sch. C] should belong to and be enjoyed, owned and possessed by them in severalty and absolutely and they would pay and satisfy the rest of the partnership liabilities including those mentioned in Sch. D. Clause 11 states that the entire banian-ship business (including the Indo Agri. Ltd.) of Shaw Wallace & Co. had been and was thereby allotted to Nos. 1 to 7 with effect from 1st January 1935. This clause then provides that the agents of the partnership had deposited, as security with the partnership firm, sums aggregating Rs. 10,000 and there were several claims outstanding due to the partnership from agents and several sums payable by the partnership to Indo Agri. Ltd., which claims and liabilities were allotted to Nos. 1 to 7 who were exclusively to realise the claims and pay the liabilities.

25. Clause 6 recites or records that outside the arbitration the agencies had been divided by the respective parties, but cl. 11 records that the entire banianship business of Shaw Wallace had been allotted to Nos. 1 to 7. This must be subject to cl. 6 which makes it clear which part of the banianship business had been allotted to them and it can only mean the several agencies which are correctly set out in Sch. B as allotted to Nos. 1 to 7 and not the whole of these agencies. Having been previously allotted there was no need for them to be allotted once again, and this purported allotment is of no effect and is no more than an unnecessary and inaccurate repetition of the earlier allotments. The assets which belonged to and the liabilities which had been incurred by the agencies, when administered by the partnership, were the assets and liabilities of the partnership and which had to be divided and allotted by the arbitrators. The distribution by Messrs Shaw Wallace of the agencies between the two groups of partners, for control and administration, related solely to the right to the agencies after the partnership had come to an end. This distribution did not and could not affect the partnership assets and liabilities of the agencies during the administration of them by the partnership. Apart from an agreement between the parties, those assets and liabilities had to be allotted to the two groups by the arbitrators and, in doing this by cls. 9, 10 and 11 of the award, the arbitrators acted perfectly properly and in accordance with the submission to them by the arbitration agreement.

26. In para. 7 of the petition it is alleged that the partners agreed that the assets of the various agencies would belong to the partners to whom the particular agencies had been allotted. This agreement is denied in para. 7 of the affidavit in opposition and there is no reference to it in the award. Had there been any such agreement the arbirtators would have been informed of it and they would have made reference to it in the award.

27. The award is not defective by reason of the allocation of the assets and liabilities of the agencies nor by the statement in cl. 11 of the allotment of the banianship business to Nos. 1 to 7.

28. (5) The award is incomplete as it does not deal with matters reserved in another arbitration award dealing with the Madras business.

29. There was a stranger named Motilal Fomra who was a partner in the Madras business, together with the patties Nos. 1 to 10. He had a two anna share in it and the remaining 14 annas share belonged to the partnership of Nos. 1 to 10. It would seem that Fomra's brother and sons were interested with him in the above two annas share. On 10th August 1935 an arbitration agreement was made between nos. 1 to 10 together with Motilal Fomra and his relations, who were parties Nos. 11 to 16 in the agreement, by which matters in dispute at Madras were referred to the same gentlemen who were arbitrators in the earlier arbitration agreement.

30. By their award dated 21th December 1935 (the same date as the award in the other arbitration) the arbitrators found, held and directed, inter alia, that the partnership (that is the Madras business) was dissolved by mutual consent and the entire business was allotted and taken over by Nos. 1 to 7; the only dispute refer, red for decision was whether Motilal Fomra and/or his brothers and/or his sons were exclusively entitled to the profits of five specified agencies and/or were entitled to separate remuneration for the management of those agencies; the agency businesses belonged to the partnership and Motilal Fomra was entitled to an extra remuneration of Rs. 10,000; besides the amounts credited in the books of account, extra sums remained in Motilal's hands which the arbitrators had taken into account in the other arbitration between Nos. 1 to 7 and Nos. S. to 10, and it was agreed before the arbitrators that no separate decision need be given by them; and it was also agreed before the arbitrators that the general account of the Madras partnerehip should be dealt with by them in the other arbitration and the award made thereunder.

31. Complaint is made by nos. 8 to 10 that the arbitrators have not decided and their award (in the arbitration which is now under review) does not deal with, the matters which the Madras award left to be decided in the arbitration under the agreement dated 20th December 1994.

32. By cl. 10 of the award (the subject of the present application) the arbitrators allotted to Nos. 1 to 7, inter alia, the business of the partnership at Madras (as well as other businesses therein mentioned) and the shares and interest of the partnership in the assets, stock-in-trade, stores, claims, outstanding, immoveable properties, deposits and other assets appertaining to Madras (as well as other businesses) should belong to, and be enjoyed, owned and possessed by, them in severalty and absolutely and they would pay and satisfy the rest of the liabilities of the partnership, including those mentioned in Sch. D. This schedule includes in the assets of the partnership, all claims and book debts other than those allotted to nos. 8 to 10, and in the liabilities to be paid by nos. 1 to 7, the amounts due to the several persons in the Madras books.

33. From the foregoing it is clear that the matters of general account which, by agreement as stated in the Madras award, were to be dealt with in the award now under consideration, are included in that award.

34. (6) All necessary persons were not parties to the arbitration. In some of the businesses or sub-businesses, for instance, at Madras, there were persons who were not partners in the partnership but were partners with the partnership in those sub-businesses. Further, with regard to some of the immoveable properties, which the arbitrators have found belonged to the partnership, and with which I will deal later, it was alleged that these properties were owned not by the partnership but by some individual members in their personal capacity together with others who were strangers to the partnership. It was argued that all these other persons should have been parties to the arbitration and their absence makes the award bad. These persons were not parties to the arbitration agreement and if their presence at the arbitration was thought to be necessary they could, at least have been asked to be parties to the arbitration agreement. It was not suggested that they were over approached. The object of the arbitration, inter alia, was to have a pronouncement as to the assets and liabilities of the partnership and the division of them to be made among the partners. This would involve the ascertainment of the partnership shares in any other partnership, for instance at Madras and in any properties. This was done and the award gives the findings of the arbitrators with regard to them. In my view there is no substance in this contention.

35. (7) The arbitrators exceeded their powers by allotting to Nos. 1 to 7, as assets of the partnership, properties and assets which, did mot belong to it. This objection to the award more particularly relates: to the immoveable properties, Kalichowki in Bombay, shares in land at Kurla, 26 Middle Road, Entally, the collieries in Behar, and also to the khajanchiship of the Imperial Bank, Burra Bazar Branch, Calcutta. Nos. 8 to 10 allege that none of these were assets of, or were owned by, the partnership.

36. It must be borne in mind that the present application is not and cannot be an appeal against the findings of fact by the arbitrators. The arbitration agreement conferred jurisdiction upon the arbitrators to ascertain the assets of the partnership. They have found the above properties and the khajanchiship belonged to the partnership. With regard to the Bombay, Kurla and Entally properties Nos. 8 to 10 were asked for and gave a valuation of these which they did “without prejudice.” The valuation, with this reservation, shows that a contention with regard to ownership was being raised at the arbitration which doubtless received consideration by the arbitrators. The arbitrators had full authority to investigate and decide what were the assets and they have done so. Even assuming that their findings are incorrect, nevertheless there is no defect on the face of the award and nothing to show that the arbitrators have been guilty of misconduct in this respect and the findings cannot be set aside.

37. (8) The award purports to create a trust. In cl. 21 of the award it is stated that the partnership set apart various sums from time to time for the purpose of charity and all the parties desired that the properties specified in the clause, of the total value of Rs. 51,238 including a sum of Rs. 8,500 to be paid by Nos. 1 to 7 be set apart for such charitable purposes as the arbitrators might think fit and they should nominate trustees and frame a scheme. Schedule F to the award contains the scheme which the arbitrators framed. The name of the trust was to be the “Marwari Education Trust.” The objects were to help and give encouragement to Marwari boys and girls in their education and give them scholarships, donations, prizes, medals, etc., to encourage research work among Marwari students and pay money to a university and other institutions to further the cause of education among Marwari students; to start and maintain boarding houses, schools, colleges and institutions or co-operate with institutions which might agree to help Marwari students in furtherance of their education; to receive donations from others for the purposes of the trust; to amalgamate or co-operate with any other trust having similar objects; and

“for such other purpose and in each other manner as the trustees might think fit which may advance the cause of education of the Marwari Community.”

38. There are other provisions, for instance, powers, numbers, appointment and removal of trustees to which reference is not required.

39. It is contended that: (1) The submission to arbitration does not authorise the creation of a trust. (2) The object of the trust being, inter alia, to advance the cause of education, (which I have set out in quotation above) the trust is void. (3) A trust cannot be created in an arbitration award.

40. (1) Whilst there is no reference to the creation of a trust in the submission, in cl. 21 of the award it is stated that the parties desired the properties and monies therein mentioned to be set apart for charities and that the arbitrators should frame a scheme. This statement reflects that all the parties asked for and consented to this being done by the arbitrators. The petition makes no reference to the proceedings before the arbitrators relative to the trust and does not deny the correctness of the statements in the award. In para. Id of the affidavit of Guru Protap Poddar, party No. 9, who supports the present application, there is a bare allegation that the arbitrators had exceeded their jurisdiction and had gone beyond the terms of reference and had created a trust; but, again, there is no denial of the correctness of the statements in the award. It is, therefore, beyond dispute that all the parties requested the arbitrators to create a trust and to frame a scheme with respect to the properties set out in cl. 21 of the award, and agreed that this should be included in the award.

41. Where there is jurisdiction to make an award, the award is not bad because the possibility that matters, not within the jurisdiction of the arbitrators, may have been taken into account, is not in terms excluded on the face of the award. In such a case, the award can be impeached only by showing that the arbitrators did in fact exceed their jurisdiction (See Falkingham v. Victorian Railways Commissioner, 1900 A.C 452 : (69 L.J P.C 89). In Maccaura v. Northern Assurance Co. Ltd., 1925 A.C 619 : (94 L.J P.C 154), it was held that the Court will not set aside an award on the ground that the arbitrator had exceeded his authority, where the party complaining had made no protest at the hearing before the arbitrator. A fortiori, it will not do so when the party complaining agreed at the hearing that the arbitrators should deal with a matter which might not be included in the submission.

42. (2) It was argued that since the last of the objects of the trust is “for such other purpose and in such other manner as the trustees may think which might advance the cause of education in the Marwari community”,

43. This power would allow the trustees to spend the income of the trust upon propaganda and upon substantial entertainment provided that both might advance the cause; therefore, it was contended, the trust fails with respect to the whole. No objection or criticism was made with regard to any other object, including the object of paying money to a university or other institution for furthering the cause of education among Marwari students. In my view, there has been an attempt to place undue emphasis upon the word “cause”. It is quite dear, looking at the objects as a whole, what the intention and the objects of the trust are, and I do not think the wide meaning should be given or could be given to the object of advancing the cause of education as is suggested. The objects, as expressed in the scheme, appear to be in accordance with those which one finds in the majority of trusts of this nature. In my view the trust is not bad because of the objects expressed in the scheme.

44. (3) Reference was made to Chalmers v. Chalmers, 48 C.W.N 621 : (A.I.R (31) 1944 P.C 78), in which the Judicial Committee held that a trust is not created merely by entries its a book of account, and thus, it was argued, a trust was not created of the sums, set apart as being devoted to charity, in the partnership books. The shares and cash which clause 21 of the award sets out as the corpus of the trust, are not the sums, as such, which the partnership books show as being set aside for charity. These properties are those which all parties requested the arbitrators to utilise as the corpus of a trust for which they are to frame a scheme.

45. The arbitrators were requested by all parties to frame a scheme in respect of specific shares and cash and for a trust to be created in respect of those shares and cash. The arbitrators carried out the request made to them. No authority was cited by which it has been laid down that if an award settles the terms and conditions of a trust, then the award, is bad and should be est aside. In the absence of such authority I am not prepared to hold that the award is bad.

46. 9. The award is bad for want of registration. The award has not been registered and the contention that, consequently, the award is bad more especially arises out of the following, clauses in the award in which immoveable properties are allocated to one or other of the two groups of parties. Clause 9, properties appertaining to 31 agencies of Messrs Shaw Wallace & Co., allotted to Nos. 8 to 10; cl. 10, appertaining to the partnership business at, Calcutta, Bombay, Madras, Karachi and Delhi and the Bihar colliery allotted to Nos. 1 to 7, and cl. 13, Kalichowki, Bombay, Kurla land and a house at Entally allotted to Nos. 1 to 7.

47. These properties previously belonged to the partnership and, therefore, to its 10 partners. It was argued that, by making the above allotments, the award purports, even if it does not operate, to create or declare for the partners in whose favour the allotments are made, their right, title and interest therein and to extinguish those of the other partners.

48. Prior to the making of the award, all the parties, as partners in the partnership, were jointly the owners of the properties to the extent of the interest of the partnership in them. After the award, only those parties, or groups of parties, to whom the properties were allotted by the award were entitled to the properties and the interests of the other parties in them were extinguished. The right, title or interest of the parties in the properties depends upon and arises out of the terms of the award and reference to it, therefore, becomes necessary to ascertain their right, title or interest in the property.

49. The learned Advocate-General, on behalf of the contesting parties Nos. 1 to 7 argued that the award neither purports nor operates to create, declare, or extinguish any right, title or interest in immoveable property, clause 14 of the award directs Nos. 8 to 10 to execute the necessary release, transfer, and assurance in favour of Nos. 1 to 7 (if they should desire it and would pay for it to be done) in respect of the Bombay, Kurla and Entally properties; cl. 24 directs, if necessary, mutual releases and assurances and all other documents to be executed by all parties for more fully and effectually carrying out the directions as to the allotments and for vesting the properties in the parties to whom they have been respectively allotted, and, if and when these documents are executed, they would create, declare or extinguish the parties' rights in the property, but in the absence of execution of these documents, those rights would not be transferred.

50. I am unable to accept this argument. The right, title and interest of the parties is ascertained from the award. Whilst there are the directions stated in clauses 14 and 24, the execution of the documents therein directed is not compulsory; they are to be executed either if desired by Nos. 1 to 7 or if necessary, as the case might be, and if they are executed, they would have to be in accordance with and pursuant to the other clauses in the award which set out to which parties thenceforth the right, title and interest in the properties would belong. The words “hereby allot” and “hereby award and direct” in the award makes it an operative instrument. (See Sir Hari Shanker Paul v. Kedarnath Saha, 66 I.A 184 : (A.I.R (26) 1939 P.C 167).) In my opinion the award purports to create, declare or extinguish the right, title or interest of the respective parties in the properties. The transfer or assignment of them is not necessary to bring the award within Section 17(1)(b) of the Registration Act, since it purports to create, declare or extinguish those rights.

51. A further contention was raised which requires reference to the relevant portions of Section 49 of the Registration Act, they are as follows:

“No document required by S. 17……to be registered shall

(a) affect any immovable property comprised therein, or….

(c) be received as evidence of any transaction affecting such property……unless it has been registered,

Provided that an unregistered document affecting immovable property and required by this Act…to be registered may be received in evidence of a contract in a suit for specific performance under Ch. II of the Specific Relief Act 1877 or……as evidence of any collateral transaction not required to be effected by registered instrument.”

52. It was contended that the directions in the award, in clauses 14 and 24, were collateral transactions within the meaning of the proviso and that if any suit were brought to enforce the award, such suit would be one for specific performance. Consequently, it was argued, the failure to register the award does not prevent it being used as evidence in such a suit or of such a transaction. Be that as it may, when an award is filed in Court, an application to execute the award can be entertained and the question of the award being used as evidence in a suit for specific performance or as evidence of a collateral transaction, does not arise in the present proceedings nor would arise in any proceedings to obtain execution of the award.

53. Further reference is now required to the provisions of S. 17(2)(vi) of the same Act, which, previously, have been stated. This sub-clause was amended in 1929. Previously, the words “or award” appeared after “Court” but they have now been eliminated. Before the amendment an exception from registration was made with respect to an award falling within S. 17(1)(b); but this exception has now disappeared, and such an award now requires to be registered. This was the view expressed by a Division Bench of this Court in Jitendranath De v. Nagendra Nath De, 62 Cal. 201 : (A.I.R (21) 1934 Cal. 815). A decision to a like effect is to be found in Bachchan Lal v. Narottam Datt, A.I.R (20) 1933 ALL. 59 : (143 I.C 423).

54. Having come to the conclusion, as I do, that the award requires to be registered and as this has not been effected, the next question for consideration is the result of such a finding.

55. It was contended, on behalf of parties Nos. 1 to 7, that even if registration is required with regard to the portions of the award which deal with immovable properties, nevertheless the other portions are still enforcible. If, notwithstanding some portion of an award is void, the remaining part contains a final and certain determination of every question submitted, the valid portion may frequently be maintained and the invalid or void part rejected. (Vide Stone v. Phillips, (1837) 4 Bing. N.C 37 : (7 L.J (N.S) C.P 54). The bad portions, however, must be clearly separable in their nature in order that the award may be good for the residue (vide Tandy v. Tandy, (1841) 9 Dowl. 1044 : (61 R.R 845). On account of the absence of registration although it is not void, the award cannot affect the immovable property with which it deals nor be received in evidence affecting such property, and, therefore, those portions which deal with the division and allotment of immovable proper, ties are unenforcible. If the other portions remain, then the division of part only of the assets of the partnership is effective. It must follow that the remaining portions of the award do not contain a final and certain determination of every question submitted to the arbitrators, and, therefore the portions dealing with the division and allotment of the immovables cannot be separated from the remaining portions. These two portions are interdependant.

56. In Chimanlal Girdhar Gauchi v. Dahyabhai Nathubhai Gauchi, A.I.R (25) 1938 Bom. 422 : (177 I.C 911), it was held that an award, which falls within Section 17(1)(b) of the Registration Act, requires to be registered, and in the circumstances of that case the lower Court was wrong in making it a decree of Court. The award dealt with some movables as well as with immovable property. Broomfield, J., who delivered the judgment of the Court, observed at p. 423:

“It was somewhat faintly suggested that the award deals also with movable property and so far as the movables are concerned, it would not require registration. But it is quite clear in my view that the award is not separable. The various provisions are interdependent and, as a whole, it clearly required registration.”

57. In Ch. Bachchan Lal v. Narottam Dutt, A.I.R (20) 1933 ALL. 59 : (143 I.C 423), an un-registered award in a partition arbitration allot, ted moveable and immovable properties among the parties. It was held that the award was inseparable and being inadmissible in evidence for want of registration, it was rejected and the application for filing it was dismissed.

58. In the circumstances of this case and the contents of the award it is impossible to separate the portions which deal with immovable properties from the other portions and allow the other portions alone to be executed.

59. Faiture to have the award registered is not, in my view, a ground upon which it can be met aside, but, in addition to seeking to have the award set aside, there is a prayer in the petition for it to be removed from the file. The object and the result of an award being filed is that execution may be ordered upon it. It was argued that this Court cannot direct the removal of a document from its file and that the objections now raised to the effectiveness of the award are premature and should properly be put forward if and when an application is made for execution. If, as I am satisfied in this case, an I award has been filed which cannot be the subject of execution proceedings, there is no need to wait until such an application is made, but steps can be taken at the outset to prevent an attempt to enforce the award. A Court of Record has inherent power to order removal of documents from its file in proper cases: (See Hill v. Hart Davis, (1884) 26 Ch. D. 470 : (51 L.T 279). In Sadarmull Jessraj v. Agarchand Mahala, 23 C.W.N 811 : (A.I.R (6) 1919 Cal. 89), an application was made for an injunction to res-train further proceedings in an arbitration. In refusing the injunction, Rankin, J. observed at p. 814:

“Therefore, the position is simply this that in all these cases where a man says that he wants to deny the contract altogether, his course is to let the arbitrators do what they like, to wait till there is a question of the award being enforced and the moment he gets notice that the award is going to be filed or has been filed, to object to it.”

60. I do not consider that it is necessary to wait until an application is made to execute the award before taking the objections which have now been put forward and to obtain the relief which is now sought. In my view, the present application is properly made and before unnecessary costs have been incurred in initiation of execution proceedings. For the reasons which I have given, there should be an order that the award be removed from the file of the Court.

61. Considerable time has been devoted to arguments and the hearing of this matter. The applicant has succeeded upon one out of nine-contentions. In those circumstances I think the proper order to make is that each party should respectively bear his or their costs.

62. This is a fit case for certificate for two counsel.

D.H

63. Application allowed.