Ratan Lal Sharma vs Purshottam Harit on 11 January, 1974
Strong reliance was, however, placed by the learned counsel
for the respondents on two decisions of this court, namely
(1) Ratan Lal Sharma v. Purshottam Harit, [1974] 3 SCR 109
and (2) Lachman Das v. Ram Lal andanr, [1989] 3 SCC 99.
Insofar as the first mentioned case is concerned, the facts
reveal that the appellant and the respondent who had set up
a partnership business in December 1962 soon fell out. The
partnership had a factory and other moveable and immoveable
properties. On August 22, 1963, the partners entered into
an agreement to refer the dispute to the arbitration of two
persons and gave the arbitrators full authority to decide
their dispute. The arbitrators made their award on
September 10. 1963. Under the award exclusive allotment of
the partnership assets, including the factory, and
liabilities was made in favour of the appellant and it was
provided that he shall be absolutely entitled to the same in
consideration
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of a sum of Rs. 17,000 plus half the amount of realisable
debts of the business to the respondent. The arbitrators
filed the award in the High Court on November 8, 1963. On
September 10, 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 barred by time
but declined to make the award the rule of the court because
in his view the award was void for uncertainty and created
rights in favour of the appellant over immoveable property
worth over Rs. 100 requiring registration. The Division
Bench dismissed the appeal as not maintainable whereupon
this Court was moved by special leave. Before this Court it
was contended (i) that the award is not void for
uncertainty-, (ii) that the award seeks to assign the
respondent's share in the partnership to the appellant and
therefore does not require registration; and (iii) that
under section 17 of the Arbitration Act, the court was bound
to pronounce judgment in accordance with the award. This
court while reiterating that the share of a partner in the
assets of the partnership comprising even immoveable
properties, is moveable property and the assignment of the
share does not require registration under section 17 of the
Registration Act. The legal position is thus affirmed.
However, since the award did not seek to assign the share of
the respondent to the appellant but on the contrary made an
exclusive allotment of the partnerShip asset including the
factory and liabilities to the appellant, thereby creating
an absolute interest on payment of consideration of Rs.
17,000 plus half the amount of the realisible debts, it was
held to be compulsorily registrable under section 17 of the
Registration Act. The Court did not depart from the
principle that the share of a partner in the asset of the
partnership inclusive of immoveable properties, is moveable
property and the assignment of the share on dissolution of
the partnership did not require registration under section
17 of the Registration Act. The decision, therefore, turned
on the interpretation of the award in regard to the nature
of the assignment made in favour of the appellant. So far
as the second case is concerned, we think it has no bearing
since that was not a case of assignment of partnership
property under a dissolution deed. In that case, the
dispute was between two brothers in 2-1/2 killas of land
situate in Panipat, Haryana. The said land stood in the
name of one brother the appellant. The respondent
contended that he was a banamidar and that was the dispute
which was referred to arbitration. The arbitrator made his
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award and applied to the court for making it the rule of the
court. Objections were filed by the appellant raising
various contentions. The award declared that half share of
the ownership of the appellant shall "be now owned by Shri
Ram Lal, the respondent in addition to his half share owned
in those lands". Therefore, the award transferred half
share of the appellant to the respondent and since the value
thereof exceeded Rs. 100, it was held that it required
registration. It is, therefore, obvious that this case has
no bearing on the point in issue herein.