RATAN LAL SHARMA versus PURSHOTTAM HARIT

Citation: [1974] 3 S.C.R. 109 · Decided: 11-01-1974 · Supreme Court of India · Bench: P. JAGANMOHAN REDDY · Disposal: Dismissed

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Judgment (excerpt)

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RATAN LAL SHARMA
v.
PURSHOITAM HARIT
January 11, 1974
[P. JAGANMOHAN REDDY, S. N. DWIVEDI
AND P. K. GOSWAMI, JJ.]
1 O!)
Arbitratinn Act. 1940, Sec. 11-Award-Whether, one assig11ing share in partner-
ship or one creating rights in i11m1ovable propetty worth more than Rs. 100/·.
Registration Act 1908-Requireme11t of registration under Sec. 17.
Held, court cannot pronounce judg111en1 in tern:s of uw·egistered award creatii1g
rights in in1111ovable property ll'orth abo~'e Rs. 100/·
The appellant and the respondent set up a _partnership business in December,
1962. The partners soon fell out. At the time the disputes arose, the running busi~
ncss had a factory and various movable and immovable properties. On August
'.!2, 1963, by agreement in wriling, the parties referred "the disputes of our concern"
to the arbitration of two persons and &ave .. the arbitrators full authority to decide
our dispute". The arbitrators gave their award on September IO, 1963.
The award made an exclusive allotment of the partnership
assets,
inclu~
ding the factory, and liabilities to the appellant. He was "absolutely· entitled to
the same" in consideration of a sum of Rs. 17,000/~ plus half the amount of the rea~
Usable debts of the business to the respcndent and of the appellants renouncement of
the right to share in the amounts already received by the respondent. The award,
stipulated that the appclfant should not run the factory unless he has paid the awarded
consideration to the respondent. The arbitTators filed the award in the High Court
on November 8, 1963. On September 10, 1964, the respondent filed an application·
for dctennining the validity of the agreement and for setting aside the award. On
May 27, 1966, a learned -single judge of the High Court dismissed the application·
as time barred. But he decUned the request of the appellant to proceed to pro-
nounce judgment according to the award because in his view; (i) the award was
void for uncertainty and (ii) the award, which created rights in favour of the appel-
lant over immovable property worth over Rs. 100/-, required registration .and was.
unr~gistered. From this part of the order, the appellant filed an appeal which was
dismissed as not maintainable by the Division Bench of the High Court. In this
Court, the appeUant ?referred an appeal by special leave against the decision of the
sing]e Judge declining to pronounce judgement in accordance with the award. · He
also filed a special Jea"ve petition against the judgement of the DiVision Bench. In
the appeal before this Court, the appellant contended : (i) that the award.is not void
for uncertainty; (ii) that the award seeks to assign the respondent's share in the part~
nerhsip to the appellant and so does not require registration; (iii) that under sec. 17
of the Arbitration Act, the court was bound to pronounce judgment in accordance
with the award after it had dismissed the respondent's application for setting it
aside.
Dismissing both the appeal and the special leave petition,
HELD : (i) The share of a partner in the assets of the partnership, which has also
inuno\'able properties, is movable property and the assignment of the share does not
require registration under Sec. 17 of the Registration Act. Bu·t the award in the ins-
tant case does not seek to assign the share of the respondent to the appellant, either
in express words or by necessary iaiplication. The award expressly makes an ex-
clusive allotment of the partnership assets including the factory and liabilities to the·
~ppellant. It gees further and makes him "absolutely entitled to the same''. in
consideration of a sun1 of Rs. 17000/- plus hair of the amount of Rs. ·1924 ·88P. to
the respondent and the appeUant's renouncement of the right to share in the amounts
already received by the respondent. In express words the award purports to create
rights in immovable. property worth above Rs. lOOJ · in favour of the appellant. It
would accordingly require
registration
under Sec. 17 of
the Registration··
Act. [111D; 112F]
110
SUPREME COURT REPORTS
[ 1974 J 3 S.C.!l.
Aiudhia Parshad Ram Porshad v. Sha111 Sunder and Ors. A. I. R. 1947, Labore 13
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at p. 20, Addanki Narayan v. Bhaskara Krishtappti, [1966]3 S.C.R. 400 at pp 406 and
407 and Commissioner of lncon1e Tax v. West Bengal, Calcutta v. J11ggi!al Ka111alapat
!19671 S.C.R. 784at p. 790referred to.
Sotish Kumar and Others v. Surinder

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