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Collector of Jamnagar and anr. Vs. Mrs. Tarabai Lalji and ors. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtGujarat High Court
Decided On
Judge
Reported in(1976)17GLR941
AppellantCollector of Jamnagar and anr.
RespondentMrs. Tarabai Lalji and ors.
Cases ReferredChhati Lal v. Ramcharitar A.I.R.
Excerpt:
.....the division bench of the high court was clearly in error. namely, that where the court finds an error of law in the award itself or in some document actually incorporated thereto on which the arbitrator had based his award, that is to say, finds the statement of some erroneous legal proposition which is the basis of the award, it can remit the award to the arbitrator for reconsideration and want of registration is a defect de hors the award or the decision of the arbitrator, and so in our judgment is not covered by clause (c) of section 16(1), arbitration act, 1940. what was said there about a want of registration is clearly equally applicable to a want of stamp. that would be against well-established principles of the law of arbitration......officer after keeping a certified copy of the award on the record of the court for getting the award registered. the period of four months during which the document is required to be registered is to expire shortly and, therefore, permission be granted at the earliest so that no technical objections are raised later on. the award was filed before this court pursuant to the order of this court, whereby the hon'ble arbitrator was directed to file the award in this court. this original award be given to the said authorised officer on an undertaking that after the registration of the award, it will be produced by him in this court.4. this application has been amended, stating that the certified copy of the award was presented to the sub-registrar for registering the award, but an.....
Judgment:

J.M. Sheth, J.

1. This Civil Application raises an interesting question which I had no occasion to decide at any time perior to this.

2. The facts leading rise to this civil application are as follows: the opponent moved the court under Section 20 of the Arbitration Act, 1940, for filing an arbitration agreement. It was numbered as Special Civil Suit No. 25 of 1968, in the Court the Civil Judge, Senior Division Jamnagar. Mr. D.A. Chhaya, learned Civil Judge, Senior Division, Jamnagar, passed on Ex. 199 an order in the said suit, appointing Mr. N.J. Mankad, as the sole arbitrator in place of salt Commissioner of India, Jaipur. Civil Revision Application No. 460 of 1973 was filed in this court by Mrs. Tarabai Lalji, who moved the Court for filing an arbitration agreement, to set aside that order. In that revision application, the order appointing Mr. N.M. Miabhoy as an arbitrator in place of Mr. N.J. Mankad came to be passed on the basis of the consent terms. Material term No. 2 which is referred to in Civil Application No. 1728 of 1975, Ex. 'D', page 39, reads:

Shri N.M. Miabhoy may kindly be appointed as the sole arbitrator for liberating upon the disputes mentioned in paras (28 to 31) of application, Ex. 1 of special civil suit No. 25 of 1963 and that the arbitrator should file his award within six months and as per the provisions' of the arbitration Act applicable to the case.

Time was extended by this Court for filing of an award by the arbitrator till 30-4-1975. The arbitrator made the award on 22-4-1975 and filed that award in this Court on 24-4-1975.

3. On behalf of the applicants first a request was made that this award is given to the arbitrator for registration of the award. Ultimately they filed the present civil application requesting this Court that the original award be given to an authorised officer after keeping a certified copy of the award on the record of the court for getting the award registered. The period of four months during which the document is required to be registered is to expire shortly and, therefore, permission be granted at the earliest so that no technical objections are raised later on. The award was filed before this Court pursuant to the order of this court, whereby The Hon'ble arbitrator was directed to file the award in this court. This original award be given to the said authorised officer on an undertaking that after the registration of the award, it will be produced by him in this Court.

4. This application has been amended, stating that the certified copy of the award was presented to the sub-registrar for registering the award, but an objection was taken, that it being not an original document, it cannot be registered and hence this request is made for giving this original award on the aforesaid conditions for getting the award registered.

5. Original plaintiff of the said suit Mrs. Tarabai has objected to this request made. Mr. M.H. Chhatrapati appearing for her, has contended that the moment the arbitrator signs, the award the arbitrator becomes functus officio. At any rate, after the expiry of the extended period on 30-4-1975, the arbitrator became functus officio. It is only the arbitrator who is entitled to present the document of award to the sub-registrar for its registration. None else is entitled to present it for registration. The moment this award is filed in this court, rights have accrued in favour of the parties to the award to take up a contention regarding the validity of the award and validity of it can be questioned on the ground that it is not properly stamped and it is not registered and consequently, it cannot be made a rule of the court. Mr. Chhatrapati has, therefore, submitted that this Court is not entitled to allow the party to fill up any such lacuna and repair the breach committed by the arbitrator. Mr. Chhatrapati has contended that the rights of this parties under an award were crystalised on the filing of the award in the court on 24-4-1975 by the arbitrator. Admittedly, on that day this document, viz. The award filed by the arbitrator, was not registered. Mr. Chhatrapati has, therefore contended that if this document required registration, validity of it will have to be judged on looking to its condition as and when it was filed.

6. At this stage, I am not called upon to consider the effect of the registration of this document that be made in case I take the view that this document should be given to an authorised officer for presenting it to the sub-registrar for registering it. It will be open to Mr. Chhatrapati to contend regarding the validity of the award and effect of such registration which will be made, after the filing of the award, admittedly.

7. The question that is posed before me is, whether after the filing of such an award, if any party to the award claiming a right or interest under the award moves this Court for giving such directions whether the Court has got any power to grant such request. It is significant to note that such a request is made prior to the expiry of four months which is the period prescribed under Section 23 of the Indian Registration Act, 1908, for registration. That section reads:

Subject to the provisions contain in Section 21, 25 and 26, no document other than a will shall be accepted for registration unless presented for that purpose to the proper officer within four months from the date of its execution:

Provided that a copy of a decree or order may be presented within four months from the day on which the decree or order was made, or, where it is appealable, within four months from the day on which it becomes final.

A mere glance on the wording of this Section 23 of the Indian Registration Act makes it quite clear that there is no substance in the argument advanced by Mr. Chhatrapati, that it is only the executant of the document who is entitled to present it for registration of that document.

8. Furthermore, Section 32 of the Indian Registration Act, material for our purposes, reads:

Except in the cases mentioned in Sections 31, 88 and 89, every document to be registered under this Act, whether such registration be compulsory or optional, shall be presented at the proper registration-office-

(a) by some person executing or claiming under the same, or, in the case of a copy of a decree or order, claiming under the decree or order, or....

The wording of this Clause (a) of Section 32 also makes it clear that any person claiming under a document which is presented for registration is entitled to present it.

9. Mr. Chhatrapati has laid considerable emphasis in support of his argument on Section 16 of the Arbitration Act, 1940, which deals with 'power to remit award'. Section 16(1)(c) reads:

16(1) The Court may from time to time remit the award or any matter referred to irbitslon to the arbitrators or umpire for reconsideration upon such terms as it thinks fit-

(c) where an objection to the legality of the award is apparent upon the face of it.

In my opinion, at this stage I am not concerned with the remission of he award to an arbitrator. I am only concerned with the question whether any party to such an award who claims right or interest under the award Si entitled to move the court for getting such award registered after the filing of the award by the arbitrator. In my opinion there is nothing m the provisions of the arbitration Act which would medicate that the court would not be entitled to give such an award to the party for getting up registered within the prescribed period for getting such document is end it will be significant to note that it is not a case where the Court gives direction to re-write the award on a stamp paper or on a mourner stamp paper and thereafter get it registered. It is a case where the document of award itself signed by the arbitrator and filed m this Court is be given to the party who claims an interest m the award, for getting it registered within the period of limitation prescribed for registration of such document.

10. Mr. Chhatrapati has relied upon the decision of the Supreme Court in Rikhabdass v. Ballabhdas : AIR1962SC551 in support of his submission. The facts in that case were:

An arbitration agreement had been filed in Court under Section 20 of the Arbitration Act, 1940, and an order of reference made thereon. The arbitrator in due course entered upon the reference and made and filed his award in Court on July 14, 1955. The award concerned partition of certain properties between the wife and children of one Bhairon Bux.

The award was however unstamped and un-registered. As objection was taken to a judgment being passed on such an award. On such objection, the trial court passed an order remitting the award to the arbitrator for re-submitting it to the court on a duly stamped paper and after getting it registered.

A grievance was made against that order. The learned single judge in that case referred three questions for decision by a Larger Bench of the High Court, and the questions referred to, were:

(a) is the award made on a reference by the Court on an application under Section 10 of the arbitration Act chargeable to stamp duty?

(b) is such an award compulsorily registrable when it relates to partition of immoveable property of the value of one hundred rupees and upwards?

(c) has the court powers under Section 16(c) of the Arbitration Act, 1940 or otherwise to remit an award to the arbitrator or umpire to get it stamped and/or registered?

The matter was heard by a Division Bench. It was admitted by both the parties, that the award required to be stamped. The Division Bench felt that it was not necessary at that stage of the proceeding to answer the second question, viz., whether the award required registration. The Division Bench only answered the third question, viz., whether an award could be remitted under Section 16(c) of the arbitration Act to the arbitrate to get it stamped, and it answered that question in the affirmative. The Division Bench held that a want of stamp would be illegality apparent on the face of the award and, therefore, the case would fall under Section 16(1)(c) of the arbitration Act. It was also held, following the case of Lakhmichand v. Kalloolal 1956 Nagpur L.J. 504 that the copying of the award on a stamped paper was purely ministerial and making of an award did not deprive the arbitrator of the authority to copy an award on the requisite stamp paper. The Division Bench approved of the decision in . The matter was taken to the Supreme Court and the Supreme Court, after referring to the provisions of Section 16(1)(c) of the arbitration Act, at page 553, made the following observations:

We think that the Division Bench of the High Court was clearly in error. Under Section 16 of the arbitration Act an award can be remitted to the arbitrators only for reconsideration. When it is remitted for re-writing it on a stamped paper, it is not remitted for reconsideration. Reconsideration by the arbitrators necessarily imports fresh consideration of matters already considered by them. Now they can only consider and give a decision upon matters which are referred to them under the arbitration agreement. It follows that the reconsideration can only be as to the merits of the award. They consider nothing when they re-write the award on a stamped paper. We think the matter was correctly put by Mitter, J.; in Nani Bala Saha v. Ram Gopalsaha : AIR1945Cal19 in the following observation:

That Clause (c) means this and nothing more: namely, that where the court finds an error of law in the award itself or in some document Actually incorporated thereto on which the arbitrator had based his award, that is to say, finds the statement of some erroneous legal proposition which is the basis of the award, it can remit the award to the arbitrator for reconsideration and want of registration is a defect de hors the award or the decision of the arbitrator, and so in our judgment is not covered by Clause (c) of Section 16(1), arbitration Act, 1940.

What was said there about a want of registration is clearly equally applicable to a want of stamp.

It is also significant to note, that it was observed:.Section 17 of the stamp Act requires that stamping should be at the time of execution. Under Section 14(1) of the arbitration Act, it is only after the signing of the award that is, its execution, that the arbitrators are required to supply the information about the fees and charges, it is, of course, no part of the duty of the arbitrators under the Act or otherwise to find the costs of stamp themselves. Therefore, it is difficult to appreciate how the word 'charges' mentioned in this section includes stamp. But on this question it is not necessary for us to express any final opinion in this case.

The Supreme Court was merely considering the provisions of Section 16(1)(c) of the arbitration Act. The observations made in the last para by the Supreme Court are, in my opinion, very pertinent. They are:.Nothing that we have said in this judgment will affect the right of the parties to take such steps, if any, are available to them at law, for curing the defect arising from the award being on an unstamped paper.

It is thus evident that the Supreme Court has not in clear terms ruled out the right of a party, if there be any, to cure such defects arising from an award being on an unstamped paper. In para 8, the Supreme Court has considered the provisions of sec 151 of the code of civil procedure in the context of Section 16(1)(c) of the arbitration Act only and in that connection observed at page 554:

In the present case, ex hypothesi, the award has already been made and the arbitrator has therefore become functus officio. It is that award which requires stamp. Section 151 of the code cannot give the court power to direct the arbitrator to make a fresh award; that would be against well-established principles of the law of arbitration. It would again be useless to have another copy of the award prepared and stamped for the copy would not be the award and no Action in a court can be taken on it. The order cannot, therefore, be supported by Section 151 of the code. It is of some interest to read here the following passage from Russel on Arbitration (14th Edition) page 324:

The usual practice in preparing an award is to have two copies made of it. One the arbitrator signs, which then becomes the original award, and this is delivered to the party who takes up the award. The other copy is available for the other parties if they apply for it.

The original award before it is available for any purpose whatsoever, must be duly stamped, but there is no obligation upon the arbitrator to stamp it, and he does not usually do so.

11. In Nani Bala Saha v. Ramgopal Saha : AIR1945Cal19 the decision referred to by the Supreme Court-at page 21, it is observed: '...the real points in the case appear to us to be (1) whether the award is compulsorily registrable and (2) if so, what is the effect of its non-registration.

By reason of the exception contained in Sub-Section (2), Clause (vi) of Section 17, registration Act, an award did not before 1929 require registration, but by reason of the amendment of that clause in 1929 by which the phrase 'any award' was deleted from that clause, a private award would require registration if it comes within Clause (b) of Sub-section (1) of that section. A private award is a non-testamentary instrument. It would require registration if it purports or operates to create, declare, limit or extinguish any right, title or interest to or in immoveable property of the value of one hundred rupees or upwards. 'The award which we have before us deals with title to immoveable property worth more than rupees 100 and, so would prima facie require registration.'

At page 23, it has been observed:.Want of registration is a defect de hors the award or the decision of the arbitrator, and so in our judgment is not covered by Clause (c) of Section 16(1) of the arbitration Act of 1940. The purpose of remitting the award is for enabling the arbitrator to reconsider his decision and the illegality must be one connected with his decision as contained in the award. It must not relate to a matter which has no connection with his decision or to put it succinctly, his decree. We therefore hold that the learned subordinate judge was not right in setting aside the award on the ground of non-registration. He should have simply ignored the award in view of Section 49, Registration Act.

It is thus evident that in this decision also, only the connotation of Clause (c) of Section 16(1) of the Arbitration Act, 1940, is considered.

12. In Dasaratha Rao v. K. Ramaswamy Iyengar A.I.R. 1956 Madras 134 & Division Bench of the Madras High Court has, at page 138, observed:

All that the document, Ex. A-4, indicates is that the award pronounced on 28-5-1948 is written up on 19-6-1948 on stamp papers purchased subsequent to the pronouncement of the award. In these circumstances, we do not think that Ex. A-4 could be considered to be award in this case. It is only a transcription of the real award dated 28-5-1948, for purposes of registration.

At page 139, it is observed:

The proposition that when once the award has been pronounced, the arbitrators, having done what they were called upon to do under the submission, became functus officio thereafter, in regard to the reference, cannot be disputed. But there remain certain ministerial Acts such as the engrossing of the award on stamp paper and getting the award so engrossed registered which Acts cannot be put on the same footing as proceedings in connection with the pronouncement of the award.

If the arbitrators are to be deemed to have become functus officio even with regard to the carrying out of such ministerial Acts, then the resultant situation would be extremely as untenable as the arbitrators in such a case would be precluded from doing anything by way of even formal Acts required in connection with the award pronounced. Even the question of giving notice to the parties of the award or the filing of the award in court may also be said to be Acts done at a stage when the arbitrators have become functus officio, if the argument is pushed to its logical conclusion.

Therefore, the contention of Mr. Krishna Rao, the Learned Counsel for the appellants, that after the award was pronounced on 28-5-1948 the arbitrators were not entitled to Act in any manner even with reference to the formalities required in connection with the award pronounced, does not appeal to us.

After referring to the decision of the Patna High Court in Chhati Lal v. Ramcharitar A.I.R. 1941 Patna 215 the pertinent observations made are:

The decision referred to above went more upon the facts that the award was not registered as required by Section 23 of the registration Act within the period of four months prescribed, than upon the fact that it was an award re-written.

I need not dilate further on the point as I have made it quite clear in the earlier part of the judgment that I am not deciding as to what would be the effect of this registration, if it is made, on the award which was admittedly not registered on the date the award has been filed in the court. That question is kept open. Mr. Chhatrapati will be entitled to take objection in that behalf at the time his objections against the validity of the award are heard.

13. At this stage I have only, as said earlier, considered whether the permission to take this award for registration should be granted to the party who claims interest or right under the award. It is significant to note that registration of the award postulates and pre-supposes that there is already the making of the award. It is only after the award is made and executed, that the question of registering it will arise. I do not find any provision in the Arbitration Act, 1940, which, in any manner, indicates that such a course, which I propose to adopt, cannot be adopted. I may also state that in case it is necessary, it is a fit case for the exercise of inherent powers under Section 151 of the code of civil procedure and I also exercise those powers to see that interests of justice are met.

Civil Application No. 1733 of 1975 is allowed. It is directed that original award filed in this Court be given to the named officer Mr. S.N. Vasavada, under secretary to the Government of Gujarat, Revenue Department, for registration of it, on the Government Pleader's, on behalf of the State of Gujarat, filing a certified copy of the award and on his further undertaking that the original award given to the officer named by him will be re-submitted and filed in the Court as early as possible after the registration of the award. In the circumstances of the case, no order as to costs is made in this Civil Application.


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