# RATAN LAL SHARMA v. PURSHOITAM HARIT

- **Citation:** [1974] 3 S.C.R. 109
- **Court:** Supreme Court of India
- **Decided:** 1974-01-11
- **Case number:** CIVIL Appeal No. 1625 of 1967
- **Bench:** P. Jaganmohan Reddy, S. N. Dwivedi, P. K. Goswami
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/ratan-lal-sharma-v-purshoitam-harit-6224
- **Pages:** 5

## Headnote

1 O!)
Arbitratinn Act. 1940, Sec. 11-Award-Whether, one assig11ing share in partnership 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 pronounce 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 appellant 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 instant 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 exclusive 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 S

## Text

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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 partnership 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 pronounce 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 appellant 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 instant 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 exclusive 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
A
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 Kumar and others [1969] 2 S.C.R. 244 at
pp. 251-252 applied.
(ii) As the award is unregistered, the Court could not look into it. The award
being inadmissible in evidence for want of registration the Court couJd not
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pronounce judgment in accordance with it. Sec. 17 of the Arbitration Act preiiuppose an award which can be validly looked into by the Court. The appellant
cannot successfully invoke sec. 17. The award is an inseparable tangle of several
clauses and cannot be enforced as to the part not dealing with immovable property.
{112Hl
CIVIL APPELLATE JURISDICTION : CIVIL Appeal No. 1625 of 1967.
Appeal by Special leave from the judgment and order dated the
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27th May, 1966 of the Calcutta High Court in Award Case No. 320
1963.
S. K. Mehta, K.R. Nagaraja, M. Qamaruddin and Vinod Dhawan,
for the appellant and petitioner.
B.P. Maheshwari, Suresh Sethi and R. K. Maheshwari, for the respondent.
D
The Judgment of the Court was delivered by
DWJVEDI, J.,-Before us there is this associate litigation-the civil
appeal and the special leave petition for admission. Its history runs
thus : There is the New Bengal Engineering Works. It has a factory and
various movable and immovable properties. It is a running business.
The business was set up by the appellant and the respondent as
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partners in December 1962. As usual with many partnerships, the
partner did not march in step for long Within six months they fell
out. On August 22, 1963, they could, however, agree to refer their
disputes to the arbitration of two persons, Sri R.N. Sharma and Sri
C.M. Sharma. The agreement is in writing. It referred "the disputes
of our concern" and gave "the arbitrators full authority to decide our
dispute". The arbitrators gave their award on September 20, 1963.
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They filed the award in the high Court on November, 1963. On September I 0, 1964 the respondent filed an application for determining 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 declined the request of the appellant to
proceed to pronounce judgement according to the award. From this
part of the order the appellant filed an appeal, but the appeal was
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dismissed as unmaintainable by a Division Bench. The appellant
has
now preferred the present appeal against the decision of
the single Judge declining to pronounce judgementin accordance with
the award. He has also filed the special leave petition against the judgment of the Division Bench.
.
We shall first take up the civil appeal. The special leave petition· will become infructuous or anaemic after our decision for or
against the appellant. ·The learned Single Judge refused to pronounce
judgment in accordance with the award because (I) ai:cording to
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R. L. SHARMA Y. P. HARIT (Dwivedi, J.)
111
him the award was void for uncertainty, and (2) the award, which
created rights in favour of the appellant over immovable property
worth over Rs. 100/-, required registration and was unregistered.
Counsel for the appellant has advanced three arguments : (l) the award
is not void for uncertainty; (2) the award seeks to assign the respondent's share in the partnership to the appellant and so does not require
regi•tration; and (3) under s. 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.
It is not necessary to express any opinion on the first argument as
we arc of opinion that the award requires registration and, not being
registered, is inadmissible in evidence for the purpose of pronouncing
judgment in accordance with it. So we pass on to the remaining two
arguments of the appellant.
It is well settled now that the share of a partner in the assets of the
partnership which has also immovable properties is movable property
and the assignment bf the share does not require registration under s.
17 Registration Act. (See Ajudhia Parshad Ram Parshad v.
Sham
Sunder and others (I) Addanki Narayanappal v. Bhaskara Kristappa(')
and Commissioner of Income-tax, west Bengal Calcutta v. Juggila/
Kamalapal (3). But the award with which we are ;:oncerned docs not
seek to assign the share of the respondent to the appellant, either in
express words or by necessary implication. We set out the relevant
portion of the award :
"<We) make our award as follows :
(I) The factory and all assets and propert;es of New
Bengal Engineering Works are exclusively allotted to Dr.
Ratan Lal Sharma, who is absolutely entitled to the same.
He will pay all liabilities of \he factory.
(2) Dr. Ratan Lal Sharma shall have no claim for the re·
ccipts assigned by Sri Purushottam Harit.
(3) Payment of all cheques issued by Dr. Ratan Lal
~harma on behalf of Modern Processors to Shri Purushottam Harit shall be treated invalid_
(4) Dr. Ratan Lal Sharma shall pay Rs. 17,000/-(Rupee•
seventeen thousand only) to Shri Purushottam Harit.
(5) Shri Purushottam Harit shall render all assistance
to Dr. Ratan Lal Sharma for realising all the dues of the said
firm as and when necessary and for transfer of tenancy right
of the Factory in favour of Dr. Ratan Lal Sharma.
(6) All papers and documents in respect of the said
business shall be made over to Dr. Ratan Lal Sharma.
(I) A. I. R. 1947 Lahore 13 at p. 20.
(2) [1966] 3 S. C.R. 400 at pp, 406 and 407.
(3) [1967) r s. c. R. 784 at p. 790.
112
SUPREME COURT REPORTS
C 19741 3 s.c.a.
(7) The following sums when realised shall be divided
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equally between Dr. Ratan Lal Sharma and Shri Purushottam
Harit.
NRme of Debtors
I. Associated Engineering Co,rporation
2. Link Machinery Ltd.
3. Clendent Products
4. Minerva Engineering Works
Total
Amount
Rs. 284·17
Rs. 1079·28
Rs.
47·25
Rs. 514·18
Rs. 1924·88
N.B. (8)-The factory should not be run by Dr. Ratan Lal
Sharma until and unless the payment of the award
is not made to Shri Purushottam Harit".
The word "not" is a slip here. The patties conceded before the learned Single Judge that the award deals with immovable property worth
above Rs. JOO/-. So if it is found by us that_ the award purports to
croate rigl1ts in the appellant over immovable property, it would require registration under s. 17 Registration _Act.
(See Satish Kumar
and othPl's v. Surinder Kumar and others (I).
On_ the dissolution of the
partnership or with the retirement of a partner frofu the partnership the
share of the partner in the partnership assets is equal to the value of
his share in the net partnership assets after deduction of all liabilities
and prior charges. Even during the subsistance of the partnership,
he may assign his share to another partner. In that event the assignee
partner would get only the right to receive the share of profits of the
assigner. (See Narayanappa (supra) at p. 407).
Now the award does not· transfer the share of th~ respondent,
interpreted in the aforesaid sense, to the appellant in express words.
Nor such is the necessary intendment of the award. It expressly makes
an exclusive.allotment of the partnership assets including the factory
and liabilities to the appellant. It goes further and makes him "absolutely entitled to the same". in consideration of a sum of Rs. 17000/-
(See clause 4) plus half of the amount of Rs. 1924·88 p. to the respondent and the appellant's renouncement of the right to share in the
amounts already received by the respondent. So in express words it
purports to create rights in immovable property worth above Rs. 100/-
in favour of the appellant. It would accordingly require registration
under S. 17, Registration Act. As it is unregistered, the Court could
not look ;nto it. If the Court could not, as we held, look in to it,
the Court could not pronounce judgment in accordance with it. Sections 17 Arbitration Act presupposes an award which can be validly
looked into by the Court. The appellant cannot successfully invoke
s. 17.
(I) [196912 S. C.R. 244 al pp. 251-252.
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R. L. SHARMA v. P. l!ARIT (Dwivedi, /.)
113
The award is an inseparable tangle of several clauses and cannot be
enforced as to the part not dealing with immovable property. As already
stated, various other relevant clauses constitute consideration for. cla·
use(!), that is, for the creation ofabsolute rights in the factory and other
properties in favour of the appellant. This is perfectly clear from the
note of the arbitrators appended to the award as clause 8. The appellant is not given a right to run the factory unless he had paid the awarded consideration to the respondent.
For the reasons a'ready discussed, we agree with the learned sintfe
Judge that the award requires repistration and not being registered,
no judgment could be pronounced upon it. Jn the view that we have
taken, the special leave petition cannot be admitted.
The appeal as well as the special leave petition are accordingly
dismissed. The respondent shall ger his costs in the appeal.
S.B.W.
Appeal and }Jftitio'n disn1iss£'d.
9.,-M852 Sup. Cl/74