1. The appellants are mother and daughter, the first appellant being the widow of one Venkata Krishnayya who died in 1936. Venkata Krishnayya was the undivided brother of the contesting respondent, the first defendant in the lower Court. The appellants filed the suit for a declaration that they were entitled to certain properties in lieu of maintenance as a consequence of the award of an arbitrator, who is impleaded as the fifth defendant in the suit. The allegations in the plaint were that the first plaintiff is legally entitled to a half share in the family properties for the maintenance of herself and her daughter, that the first defendant was refusing to give proper maintenance to the plaintiffs who threatened legal proceedings, whereupon mediators intervened, and on their suggestion the dispute was referred to the fifth defendant as an arbitrator, who decided that the suit properties should be given to the plaintiffs, that the plaintiffs got possession in pursuance of this decision but their possession was threatened by the first defendant and his supporters, defendants 2 to 4. Along with the plaint, a copy of the award Ex. P-I, dated 20th July, 1943, was filed.
2. The written statement of the first defendant denied that there was any failure to maintain the plaintiffs and alleged that the arbitration by the fifth defendant was collusive and that the award was vitiated by gross misconduct on the part of the arbitrator and that it was illegal because the arbitrator had exceeded the scope of the reference. There is also a plea that the suit for bare declaration was not maintainable, but no plea was taken regarding the non-registration of the award. The date of the award is 29th July, 1943. The suit was filed on the 7th August, 4943, and the first defendant's written statement was filed on 16th October, 1943, when there was still time to have the award registered. When the issues were framed, the question of non-registration was not made the subject of any issue. Even at this stage there was still time for the registration of the award. When the suit came on for trial, objection was taken by the first defendant to the receipt of the award in evidence on the ground that it was a document which was com-pulsorily registrable under Section 17(1) of the Indian Registration Act and had not been so registered. This contention succeeded before the trial Court which dismissed the suit without finding on the other contentions raised in the issues and also rejected, as a consequence of the dismissal of the suit, a petition filed by the plaintiffs praying that the plaint might be converted into an application under Section 17 of the Indian Arbitration Act X of 1940.
3. The question which we have to decide in this appeal is therefore whether the lower Court was right in excluding the award on the ground that it was not registered. No doubt the objection was one which could have been met by the plaintiffs if it had been taken in the first instance in the written statement of the first defendant or at the time when the issues were framed. The belated nature of the objection is a matter which might well have been taken into consideration in awarding costs, but it cannot be a ground for treating the document as admissible in evidence if by law it is inadmissible.
4. The reference to arbitration is Ex. P-2 which is vague in its terms. It merely states that the dispute between the first plaintiff and her brother-in-law, the first defendant, was being referred to the arbitrator for settlement and that both parties agreed to abide by his decision. The first plaintiff also agreed to convey to her daughter the property which might be given for her share without effecting any alienation. It is also stipulated that, if either of the parties should fail to abide by the decision, the other party shall have the right to have the decision filed in Court and enforced through the Court.
5. Ex. P-1 the award after stating the nature of the dispute namely, the way in which the expenses of the maintenance of the first plaintiff and the education, protection and marriage of the second plaintiff should be met from the joint family property of the deceased husband of the first plaintiff, goes on to state that the arbitrator in consideration of the circumstances is making the 'following arrangements.' It provides that certain land should be utilised for the marriage of the second plaintiff either by selling the property or by some other means and that the property allotted to this purpose should be enjoyed by the first plaintiff pending marriage. Then follows a provision that certain property should be given for the maintenance of the two plaintiffs and for the dowry of the second plaintiff at the time of her marriage. Of the land so allotted it was decided that the first plaintiff should enjoy one acre for her life without the power of alienation and that after her death, the second plaintiff should take this one acre with full rights of gift, sale, etc., and the balance of one acre 5 cents should be taken delivery by the second plaintiff, that the whole of the two acres and five cents should be presented to the second plaintiff as dowry at the time of her marriage but that only one acre and five cents should be actually delivered to her on her joining her husband, the remaining acre passing to her only on the death of the first plaintiff. Then follow certain provisions regarding vessels and cattle, and it is provided that one half of the residential house should be enjoyed by the first plaintiff for life. The award concludes by reciting that the first plaintiff should take immediate possession of the lands allotted to her and that both parties should get the necessary documents executed and registered incurring the expenses in equal shares.
6. It has been held by the trial Court that this document creates an interest in immoveable properties Worth more than Rs. 100 and that therefore it is compulsorily registrable. It is no doubt well settled vide Skinner v. Skinner (1929) 57 M.L.J. 765 : L.R. 56 IndAp 363 : I.L.R. 51 All. 771 and Lakshmamma v. Kameswara I.L.R.(1889) Mad. 281 that when a document creates, declares, assigns, limits or extinguishes any right, title or interest in immoveable property of a value exceeding Rs. 100 it must be registered, even though the document itself contains a clause contemplating the execution of a more formal registered document in future. Since the amendment of the Registration Act in 1929, an arbitrator's award is not excluded from the operation of Section 17. The only question is whether the award now under consideration does itself create, declare, assign, limit or extinguish any right, title or interest in immoveable property, or whether it merely creates a right to obtain another document which will, when executed, create, declare, assign, limit or extinguish any such right, title or interest. If the latter is the case, then Sub-clause (v) of Clause (2) of Section 17 will exempt the award from the necessity of registration.
7. When there is a dispute between parties and that dispute is referred to an arbitrator whose decision the parties agree to accept, there is, in fact, a contract between these parties, the final terms of which will embody the decision of the arbitrator on the point referred to him. If the nature of the contract between the parties is such that it actually declares or creates or assigns any interest in immoveable property, the award just like any other contract having that effect, must be registered. If, however, the contract between the parties merely relates to the terms on which one party shall have the right to demand from the other party a future conveyance of property, then the award which settles the terms upon which this future conveyance should be made, is nothing more than part of an agreement to convey, and it is well settled that an agreement to convey in future falls under the exception in Section 17(2)(v) of the Registration Act.
8. We are not concerned in the present case with a reference to an arbitrator concerning the division of properties to which the parties are already entitled. No doubt, in such a case, the completion of the bargain by the award of the arbitrator would of itself declare the shares in the title already possessed jointly by the dispu- tants and no further conveyance would be necessary. The position in the present case was that the plaintiffs had a right to maintenance and the first plaintiff was demanding an assignment of property in lieu of the right to maintenance. The dispute concerned the quantum of property and the terms on which it should be assigned. The decision of the arbitrator settled this dispute but it did not of itself operate as a conveyance; nor could a mere declaration suffice to give title to the plaintiffs when a conveyance was obviously necessary. It seems to us therefore that the most that this award, read as part of the contract between the parties, could achieve was to give to the plaintiffs a right to require the first defendant to convey to them the property selected by the arbitrator. In this view, we are of the opinion that the award, Ex. P-1, stands on no higher footing than an agreement to transfer in future, and having regard to the terms of Section 17(2)(v), of the Indian Registration Act, it does not require to be registered.
9. In this view, we allow the appeal with costs and remand the suit to the trial Court for disposal on the merits. The trial Court will give the plaintiffs an opportunity, if they so desire, to amend the plaint so as to convert the suit into an application under Section 17 of the Arbitration Act X of 1940.
10. The Court-fee on the memorandum of appeal will be refunded.