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1989 DIGILAW 404 (ALL)

State of U. P. v. L. T. Co. Manabahdra Shah

1989-05-05

GIRDHAR MALAVIYA, K.C.AGARWAL

body1989
JUDGMENT Girdhar Malaviya, J. - This appeal has been filed by the State of U.P. under Section 39 of the Arbitration Act against the judgment dated 14-10-1978 rejecting the objections preferred by it under Section 30 of the said Act. The learned District Judge dismissed the objections holding that none of them had any substance. 2. A part from the objections disposed of by the aforesaid order, the appellant State of U.P. took two more points against the award : (i) that the award was compulsorily register-able, and (2) that the award being on an unstamped paper, was in admissible in evidence. These two objections were decided by the learned District Judge by a separate order dated 14-10-1978. He upheld the plea of the document being on unstamped paper as inadmissible in evidence, but decided the controversy about the registration against the State. The District Judge ordered: "The award is impounded and is directed to be sent to the Collector immediately under Section 38 of the Stamp Act in Original for realisation of the duty and penalty, and after it returning the award for further action by this Court. Let a formal order be prepared." 3. This order was challenged by L.T. Col. Manabendra Shah of Tehri Garhwal by a belated revisions No. 422 of 1988, filed after 10 years 94 days. The revision has been disposed of by us by a separate judgment pronounced today. We have held that the award was inadmissible on account of Section 35 of the Stamp Act, and an award given on an unstamped paper is not invalid attracting Section 30 of the Arbitration Act. 4. In the instant case, the arbitration was without the intervention of the Court and the award had been filed by the arbitrator before the Court for being made a rule of the Court. 5. If the reference to the arbitrator is at the instance of the Court, the award automatically becomes apart of the record of the case pending in the Court and the Court can proceed to hear objection, if any, filed against the said award and after rejecting any such objection can make the award a rule of the Court. But, the position regarding awards being given on arbitration without intervention of the Court is entirely different. Such awards have to be brought on record of the Court. But, the position regarding awards being given on arbitration without intervention of the Court is entirely different. Such awards have to be brought on record of the Court. Section 35 of the Stamp Act prohibits any instrument, which is chargeable with duty from being admitted in evidence for any purpose. In view of Section 35 of the Stamp Act, the award could not be admitted in evidence. Section 33 of the Stamp Act Prescribes the procedure of impounding an instrument which is chargeable with duty when it is filed before any authority, including a Court, and by that procedure the defect of want of procedure can be rectified. 6. In the instant case, the learned District Judge has followed that procedure and sent the award to the Collector for the purpose of charging of duty payable under Article 12 of the Stamp Act as well as penalty. In Pikhab Das v. Ballabh Das, AIR 1962 SC 551 the Supreme Court was called upon to consider the case of an award which was unstamped and unregistered. Their Lordships approved the decision of the Calcutta High Court in Nanibala v. Ram Gopal, AIR 1945 Calcutta 19. Saying, "Want of registration is a defect dehors the award or the decision of the arbitrator." Their Lordships then said : "What was said there about the want of registration is clearly equally applicable to a want of Stamp." Towards the concluding, part of the judgment, it was observed by the Supreme Court that it was open to the parties to take such steps as were available to them at law for curing the defect. 7. Consequently, the argument of the State Counsel that the award should have been set aside and remitted under Section 16(i)(c) of the Arbitration Act to the arbitration for re-writing the same, does not appear to us to be correct. Section 16(i)(c) applies where an objection as to the legality of the award is apparent on the fact of it. In view of the aforesaid decision of the Supreme Court, for want of payment of proper duty. Section 16 cannot be applied and the award cannot be sent to the arbitrator for reconsideration. 8. Section 16(i)(c) applies where an objection as to the legality of the award is apparent on the fact of it. In view of the aforesaid decision of the Supreme Court, for want of payment of proper duty. Section 16 cannot be applied and the award cannot be sent to the arbitrator for reconsideration. 8. However, there appears to be strength in the submission of the State Counsel that the Court should not have disposed of the objections on merit first without getting the defect in the award of having been written on an unstamped paper removed. Counsel was right that so long as the defect was not removed, the award was inadmissible in evidence. "Inadmissible" would mean that it could not decide the rights of the parties referred to the arbitrator. The Court would have jurisdiction to consider the objection under Section 30 after the defect was cured. Section 35 of the Stamp Act Casts a duty on the Court in all cases to impound an award and send the same to the Collector for appropriate action. In Therpal v. Arjun Singh, AIR 1957 MP 49 , the High Court approved the procedure of impounding of an unstamped award. There was no occasion for the Court to examine the merits of the objections taken under Section 30 and to decide the same one way or the other. When the defect is removed and the award is brought to order by curing the defect, it would then be the occasion proper and appropriate for the Court to decide the objections filed under Section 30. 9. The other question that was raised by the learned Standing Counsel was about the registration. Counsel urged that Section 17(b) of the Registration Act enjoins that any non-restamentary instrument which purports or operates to create, declare, assign, limit or extinguish, whether in present or in furture, any right, title or interest, whether vested or contingent of the value of one hundred rupees and upwards, to or in immovable property, should be registered. Therefore, the question is, does the document itself extinguish or purport to create or declare any right in immovable property. 10. The Court below repelled the argument of the State regarding registration by holding that the award only referred to existing facts, but did not on its own create or extinguish any right, and, as such did not require registration. Therefore, the question is, does the document itself extinguish or purport to create or declare any right in immovable property. 10. The Court below repelled the argument of the State regarding registration by holding that the award only referred to existing facts, but did not on its own create or extinguish any right, and, as such did not require registration. Learned Standing Counsel Submitted that but for the award the applicant Maharaja would have had no right to enforce the same against the State Government and, consequently, the award required registration before it was made a rule of the Court. The law is clear that where the award is compulsorily registerable under the Registration Act, it would not be admissible in evidence in Court. Satish Kumar v. Surindar Kumar, AIR 1970 SC 833 and Ratan Lal v. Purshottam, AIR 1974 SC 1066 . 11. As the objections under Section 30 would have to be decided, we would consider it appropriate that the controversy relating to registration of the award may also be decided afresh. 12. For what we have said above, We allow the First Appeal from order filed by the State of U.P. and set aside the judgment dated 14-10-1978 passed by the District Judge. The District Judge is directed to decide the objections filed under Section 30 of the Arbitration Act afresh. The stay order, if any stands discharged.