1972 (1) TMI 118 - SC - Indian Laws

Summary

Issues Involved:
1. Admissibility of the unstamped and unregistered arbitration award.
2. Severability of the award's provisions regarding immovable properties and personal liabilities.
3. Effect of non-registration under Section 49 of the Indian Registration Act.
4. Applicability of Section 35 of the Stamp Act.

Issue-wise Detailed Analysis:

1. Admissibility of the unstamped and unregistered arbitration award:
The defendants contested the admissibility of the arbitration award dated 10-11-1955, arguing that it was unstamped and unregistered, rendering it inadmissible in evidence. The Subordinate Judge agreed, ruling that the award embodied a partition of immovable properties worth more than Rs. 100 and was thus compulsorily registrable under Section 17 of the Indian Registration Act. Additionally, the award was not duly stamped, further supporting its inadmissibility. Consequently, the suit was dismissed.

2. Severability of the award's provisions regarding immovable properties and personal liabilities:
Upon appeal, the High Court held that the award was not inadmissible on the ground that it embodied a partition. The court opined that the award was admissible in evidence as far as it did not affect immovable property. It further ruled that a decree could be passed in terms of the severable part of the award, which was valid. The Supreme Court agreed with the High Court's view, stating that the award, in referring to the partition of immovable properties, did not purport to create or declare any interest or title in immovable property. The partition had already been effected between 26-5-52 and 30-5-52, and the award merely referenced this fact, thus not requiring registration.

3. Effect of non-registration under Section 49 of the Indian Registration Act:
Section 49 of the Registration Act states that a document required to be registered shall not affect any immovable property or be received as evidence of any transaction affecting such property unless registered. The Supreme Court noted that while the charge created by the award on the immovable properties required registration and could not be received as evidence of the charge, the personal liability to pay a sum of money was distinct and severable. The court emphasized that the document could be received in evidence for a collateral purpose, as permitted by the proviso added by the Amending Act 21 of 1929.

4. Applicability of Section 35 of the Stamp Act:
The defendants argued that the award was inadmissible under Section 35 of the Stamp Act due to it not being engrossed on stamp paper. However, the High Court found that the arbitrators had filed the original award with a true copy engrossed on a stamp of Rs. 2,865, indicating that the required stamp duty and penalty had been paid. The Supreme Court upheld this view, confirming that the award was admissible in evidence since the proper duty and penalty had been paid.

Conclusion:
The appeal was dismissed with costs, as the Supreme Court upheld the High Court's decision that the award, despite its references to immovable properties, was admissible in evidence for the severable part concerning personal liabilities. The charge on immovable properties was invalid for want of registration, but the personal liability to pay the sum of money was enforceable. The award was also admissible under the Stamp Act, as the required duty and penalty had been paid.