S.V. Chandra Pandian v. S.V. Sivalinga Nadar(1993) 1 SCC 589

हिंदी में पढने के लिए

Case Summary

Full Case Details

(The four appellants and respondents 1 and 2 were brothers carrying on business in
partnership in the name and style of Messers Sivalinga Nadar & Brothers and S.V.S. Oil
Mills, both partnerships being registered under the Partnership Act, 1932. Most of the
properties were acquired by the firm of Sivalinga Nadar & Brothers. The firm of Ms.
S.V.S. Oil Mills merely had leasehold rights in the parcel of land belonging to the firstnamed firm on which the superstructure of the oil mill stood. Both the partnerships were
of fixed durations. Disputes arose between the six brothers in regard to the business
carried on in partnership in the aforesaid two names. For the resolution of these disputes
the six brothers entered into an arbitration agreement dated October 8, 1981, which was
as under:
“We are carrying on business in partnership together with other partners under
several partnership names. We are also holding shares and managing the Public
Limited Company, namely, the Madras Vanaspati Ltd., at Villupuram. Disputes
have arisen among us with respect to the several business concerns, immovable
and moveable properties standing in our names as well as other relatives.
We are hereby referring all our disputes, the details of which would be given by us
shortly to you, namely, Sri B.B. Naidu, Sri K.R. Ramamani and Sri Seetharaman.
We agree to abide by your award as to our disputes.”
The arbitrators directed that “the firms of M/s Sivalinga Nadar & Bros. and M/s
S.V.S. Oil Mills and also the joint house property Rent Account be dissolved as at the
close of business on July 14, 1984.”
The arbitrators set out the properties belonging to or claimed to belong to the two
firms in paras. 6 to 24 of their award. Paragraph 25 was a residuary clause which said that
any asset left out or realised hereafter or any liability found due other than those reflected
in the account books was to be divided and/or borne equally among the disputants.
Paragraphs 26 and 27 deal with the use of the firm names. Paragraph 29 refered to the
business carried on by the relatives of the disputants in the names of Sri Brahmasakthi
Agency and Srimagal Finance Corporation. The arbitrators had recognised the fact that
even though the said business was not carried on by the disputants it was desirable to
dissolve the firms also w.e.f. July 24, 1984 in the larger interest of peace and amity
among the disputants and their relatives. Paragraph 30 referred to the properties standing
in the name of the father of the six disputants, i.e., partners of the two firms in question.
The award set out the share of the disputants.
After the award was made, O.P. No. 230 of 1984 was filed by S.V. Chandrapandian
and others for a direction to the arbitrators to file their award in Court which was done.
Thereupon, the applicants S.V. Chandrapandian and others filed a Miscellaneous
Application No. 3503 of 1984 requesting the Court to pass a decree in terms of the award.
Before orders could be passed on that application, O.P. Nos. 247 and 275 of 1984 were
filed by S.V. Sivalinga Nadar and S.V. Harikrishnan respectively under Section 30 of the
Arbitration Act to set aside the award. The applications came up for hearing before a
learned Single Judge of the High Court. The learned Single Judge observed as under:

“The learned counsel for the respondents also contended that the award falls under
Schedule I Article 12 of the Stamp Act and the allocation of properties owned by
partnership firm on dissolution to the erstwhile partners is not partition of
immovable properties. In this connection, learned counsel for the respondents
placed reliance on the decision reported in Addanki Narayanappa v. Bhaskara
Krishtappa which decision has been confirmed in Addanki Narayanappa v.
Bhaskara Krishnappa. It was submitted by the learned counsel for the respondents
that the contentions with regard to stamp and registration put forward by the
petitioner cannot be accepted. It is to be pointed out that the award has been
submitted for registration long ago on October 27, 1984 itself and it is stamped and
if there is any deficiency, the registering authority could direct proper stamp to be
affixed and therefore I feel there could be no impediment for the award being made
a rule of the Court and a decree being passed in terms of the award as contended by
the learned counsel for the respondents.”
The learned Single Judge made the final order in the following terms:
“Thus on a careful consideration of the materials available and the contentions of
either side it has to be decided that Application No. 3505 of 1984 in O.P. No.
230 of 1984, filed by the petitioners therein praying for a decree in terms of the
arbitration award dated July 9, 1984 has to be allowed and O.P. Nos. 247 and
275 of 1984 and the applications filed in those two petitions, i.e., Application
Nos. 3474, 3476, 5030, 5031, 5032, 2827, 2828, 3773, 3762, 3874 of 1984 and
4886 and 4887 of 1985, are dismissed. The petitioner in O.P. No. 230 of 1984
and the applicants in Application No. 3505 of 1984 are directed to take steps for
getting the award registered. The parties in all these proceedings are directed to
bear their own costs.”
Against the judgment of the learned Single Judge, the matter was carried in appeal to
a Division Bench of the High Court of Madras which reversed the finding recorded by
the learned Single Judge and came to the conclusion that the award required registration
under Section 17(1) of the Registration Act
In this view of the matter the Division Bench allowed the appeal and set aside the
impugned judgment of the learned Single Judge and held that as the award was not
registered it could not be made the rule of the Court).
A.M. AHMADI, J. – 7. Section 4 (of the Partnership Act, 1932) defines partnership as a
relationship between persons who have agreed to share the profit of a business carried on by
all or any of them acting for all. Section 14 provides that subject to contract between the
partners, the property of the firm includes all property and rights and interests in property
originally brought into the stock of the firm, or acquired, by purchase or otherwise, by or for
the firm, or for the purposes and in the course of the business of the firm, and includes also
the goodwill of the business. It is also clarified that unless the contrary intention appears,
property and rights and interest in property acquired with money belonging to the firm shall
be deemed to have been acquired for the firm. Section 15 says that the property of the firm
shall be held and used by the partners exclusively for the purposes of the business subject of
course to contract between the partners. Says Section 18, subject to the provisions of the Act,
a partner is the agent of the firm for the purposes of the business of the firm. Under Section 19

the act of a partner which is done to carry on, in the usual way, business of the kind carried on
by the firm, shall bind the firm. This authority to bind the firm is termed as “implied
authority”. Section 22 lays down that in order to bind a firm, an act or instrument done or
executed by a partner or other person on behalf of the firm shall be done or executed in the
firm name, or in any other manner expressing or implying an intention to bind the firm.
Section 29 deals with the rights of transferee of a partner’s interest. Sub-section (1) thereof
provides that such a transferee will not have the same rights as the transferor-partner but he
would be entitled to receive the share of profits of his transferor on the account of profits
agreed to by the partners. Sub-section (2) next provides that upon dissolution of the firm or
upon a transferor-partner ceasing to be a partner, the transferee would be entitled against the
remaining partners to receive the share of the assets of the firm to which the transferor-partner
was entitled and will also be entitled to an account as from the date of dissolution. Section 30
deals with the case of a minor admitted to the benefits of partnership. Such a minor is given a
right to his share of the property of the firm and also a right to share in the profits of the firm
as may be agreed upon but his share is made liable for the acts of the firm though he would
not be personally liable for the same. Sub-section (4), however, debars a minor from suing the
partners for an account or for his share of the property or profits of the firm except when he
severes his connections with the firm, in which case for determining his share the law requires
a valuation of his share in the property of the firm to be made in accordance with Section 48.
Sections 31 to 38 relate to incoming and outgoing partners. Section 32 deals with the
consequences of retirement. Sub-sections (2) and (3) of Section 32 deal with the
consequences of retirement while Sections 36 and 37 speak about the rights of an outgoing
partner to carry on competing business and in certain cases to share subsequent profits.
Chapter VI deals with the dissolution of a firm. Section 40 provides that a firm may be
dissolved with the consent of all the partners or in accordance with the contract between the
partners. Sections 41 and 42 deal with dissolution on the happening of certain events while
Section 43 permits a partner to dissolve a firm by notice if it is a partnership at will. Section
44 speaks of dissolution through Court. Section 48 indicates the mode of settlement of
accounts between the partners on dissolution while Section 49 posits that where there are joint
debts due from the firm, and also separate debts due from any partner, the property of the firm
shall be applied in the first instance in payment of the debts of the firm, and, if there is any
surplus, then the share of each partner shall be applied in payment of his separate debts or
paid to him. The separate property of any partner shall be applied first in the payment of his
separate debts, and the surplus (if any) in the payment of the debts of the firm, Chapter VII
deals with the registration of firms, etc., and Chapter VIII contains the saving clause.

8. The above provisions make it clear that regardless of the character of the property
   brought in by the partners on the constitution of the partnership firm or that which is acquired
   in the course of business of the partnership, such property shall become the property of the
   firm and an individual partner shall only be entitled to his share of profits, if any, accruing to
   the partnership from the realisation of this property and upon dissolution of the partnership to
   a share in the money representing the value of the property. It is well settled that the firm is
   not a legal entity, it has no legal existence, it is merely a compendious name and hence the
   partnership property would vest in all the partners of the firm. Accordingly, each and every
   partner of the firm would have an interest in the property or asset of the firm but during its

subsistence no partner can deal with any portion of the property as belonging to him, nor can
he assign his interest in any specific item thereof to anyone. By virtue of the implied authority
conferred as agent of the firm his action would bind the firm if it is done to carry on, in the
usual way, the business of the kind carried on by the firm but the act or instrument by which
the firm is sought to be bound must be done or executed in the firm name or in any other
manner expressing or implying an intention to bind the firm. His right is merely to obtain
such profits, if any, as may fall to his share upon the dissolution of the firm which remain
after satisfying the liabilities set out in the various sub-clauses (i) to (iv) of clause (b) of
Section 48 of the Act.

9. In the present case the six brothers who were carrying on business in partnership fell
   out on account of disputes which they could not resolve inter se. The partnership being of
   fixed durations could not be dissolved by any partner by notice. As they could not resolve
   their disputes they decided to resort to arbitration. The three arbitrators chosen by them were
   men of their confidence and they after giving the partners full and complete opportunity took
   care to first circulate a proposed award to ascertain the reaction of the disputants therein. The
   letter written to the arbitrators by S.V. Sivalinga Nadar dated February 16, 1983 indicates that
   he was quite satisfied with the hearing given by the arbitrators. He was also by and large
   satisfied with the proposed award but thought it warranted certain adjustments to make it
   acceptable and rational. He was of the view that the award should provide for the reallocation
   of the shareholdings of Madras Vanaspati Ltd., whereas Brahmasakthi Tin Factory owned by
   his sons should be kept out of the purview of the arbitrators since it was not the subject-matter
   of arbitration. Then he raised some objection as to the percentage of his share and the amount
   found due to him. In the subsequent letter written on September 9, 1983 he has reiterated
   these very objections while raising certain questions regarding valuation of partnership
   properties. Even the application filed under Sections 30 and 33 of the Arbitration Act in the
   High Court the objections to the award as enumerated in paragraph 15 mainly concerned (i)
   the conduct of the arbitrators who, it is alleged, acted negligently, with bias and against
   principles of natural justice (ii) deliberate act in leaving out certain properties from
   consideration e.g., shareholdings of Madras Vanaspati Ltd., stock-in-trade and cash deposits,
   the properties of Velayudha Perumal Nadar, etc., and (iii) failure to grant him a higher share
   to which he was entitled. No contention was raised regarding the want of registration of the
   award. However, being a question of law, the learned Single Judge entertained the plea and
   rejected it but it found favour with the Division Bench.
   The submission made in this behalf before the courts below was that the award involved a
   partition of immovable properties as a consequence of dissolution of the firms and since the
   value of the immovable properties which are the subject-matter of the award indisputably
   exceed the value of Rs 100, the award was compulsorily registrable in view of the mandatory
   nature of the language of Section 17(1) which uses the expression ‘shall be registered’. On the
   mandatory character of the provision there is no dispute. The question which requires
   determination is whether on the dissolution of the partnership the distribution of the assets of
   the firm comprising both moveable and immovable properties after meeting its obligations on
   settlement of accounts amongst the partners of the firm in proportion to their respective shares
   amounts to a partition of immovable properties or a relinquishment or extinguishment of a

share in immovable property requiring registration under Section 17 of the Registration Act if
the allocation includes immovable property of the value of Rs 100 and above? In other words
the question to be considered is whether the interest of a partner in partnership assets is to be
treated as moveable property or both moveable and immovable depending on the character of
the property for the purposes of Section 17 of the Registration Act?

12. In CIT v. Juggilal Kamalapat [AIR 1967 SC 401], the facts were that three brothers
    and one J entered into a partnership business. The firm owned both moveable and immovable
    properties. Sometime thereafter the three brothers created a Trust with themselves as the first
    three trustees and simultaneously executed a deed of relinquishment relinquishing their rights
    in and claims to all the properties and assets of the firm in favour of J and of themselves in the
    capacity of trustees. Thereafter a new partnership firm was constituted between J and the
    Trust with specified shares. The Trust brought a sum of Rs 50,000 as its capital in the new
    firm. The new firm applied for registration under Section 26-A of the Income Tax Act, 1922
    but the application was rejected by the authorities. The Tribunal held that the deed of
    relinquishment being unregistered could not legally transfer the rights and the title to the
    immovable properties owned by the original firm to the Trust. Since the immovable
    properties were not separable from the other business assets it held that there was no legal
    transfer of any portion of the business assets of the original firm in favour of the Trust. A
    reference was made to the High Court on the question whether the new partnership legally
    came into existence and as such should be registered under Section 26-A. The High Court
    held that there was no impediment to its registration. The matter was brought in appeal before
    this Court. This Court pointed out that the deed of relinquishment was in respect of individual
    interests of the three brothers in the assets of the partnership firm in favour of the Trust and
    consequently, did not require registration, even though the assets of the partnership included
    immovable property. In taking this view reliance was placed on the decision Ajudhia Pershad
    case, AIR 1947 Lah 13 as well as the decision of this Court in Addanki Narayanappa, AIR
    1966 SC 1300.
13. Again in CIT v. Dewas Cine Corporation [AIR 1968 SC 676], the partnership firm
    was dissolved and on dissolution it was agreed between the partners that the theatres should
    be returned to their original owners who had brought them into the books of the partnership as
    its assets. In the books of accounts of the partnership the assets were shown as taken over on
    October 1, 1951 at the original price less depreciation, the depreciation being equally divided
    between the two partners. In the proceedings for the assessment year 1952-53 the firm was
    treated as a registered firm. The Appellate Tribunal held that restoration of the two theatres to
    the original owners amounted to transfer by the firm and the entries adjusting the depreciation
    and writing off the assets at the original value amounted to total recoupment of the entire
    depreciation by the partnership and on that account the second proviso to Section 10(2)(vii) of
    the I.T. Act, 1922 applied. The High Court in reference upturned the decision of the Tribunal
    and held in favour of the assessee against which the Revenue appealed to this Court. This
    Court after referring to Sections 46 and 48 of the Partnership Act held that on the dissolution
    of the partnership each theatre must be deemed to be returned to the original owner in
    satisfaction partially or wholly of his claim to a share in the residue of the assets after
    discharging the debts and other obligations. In law there was no sale or transfer by the

partnership to the individual partners in consideration of their respective share in the residue.
In taking this view reliance was once again placed on the decision of this Court in Addanki
Narayanappa.

14. In CIT v. Bankey Lal Vaidya [AIR 1971 SC 2270], this Court pointed out that on
    dissolution of partnership the assets of the firm are valued and the partner is paid a certain
    amount in lieu of his share of the assets, the transaction is not a sale, exchange or transfer of
    assets of the firm and the amount received by the partner cannot be taxed as capital gains.
15. Again in Malabar Fisheries Co. v. CIT [AIR 1980 SC 176], the facts were that the
    appellant firm which was constituted on April 1, 1959 with four partners carried on six
    different businesses in different names. The firm was dissolved on March 31, 1963 and under
    the deed of dissolution the first business concern was taken over by one of the partners, the
    remaining five concerns by two of the other partners and the fourth partner received his share
    in cash. It appears that during the assessment years 1960-61 to 1963-64 the firm had installed
    various items of machinery in respect of which it had received Development Rebate under
    Section 33 of the I.T. Act, 1961. On dissolution, the Income Tax Officer took the view that
    Section 34(3)(b) of the Act applied on the premiss that there was a sale or transfer of the
    machinery by the firm whereupon he withdrew the Development Rebate earlier allowed to the
    firm by amending the orders in that behalf. The appeal filed on behalf of the dissolved firm
    was dismissed by the Appellate Assistant Commissioner but was allowed by the Tribunal. At
    the instance of the Revenue a reference was made to the High Court and the High Court
    allowed the reference holding that there was a transfer of assets within the meaning of Section
    34(3)(b). The dissolved firm approached this Court in appeal. This Court after referring to the
    definition of the expression ‘transfer’ in Section 2(47) of the Act and the case-law on the
    point concluded as under:
    Having regard to the above discussion, it seems to us clear that a partnership firm
    under the Indian Partnership Act, 1932 is not a distinct legal entity apart from the
    partners constituting it and equally in law the firm as such has no separate rights of
    its own in the partnership assets and when one talks of the firm’s property or firm’s
    assets all that is meant is property or assets in which all partners have a joint or
    common interest. If that be the position, it is difficult to accept the contention that
    upon dissolution the firm’s rights in the partnership assets are extinguished. The firm
    as such has no separate rights of its own in the partnership assets but it is the partners
    who own jointly in common the assets of the partnership and, therefore, the
    consequence of the distribution, division or allotment of assets to the partners which
    flows upon dissolution after discharge of liabilities is nothing but a mutual
    adjustment of rights between the partners and there is no question of any
    extinguishment of the firm’s rights in the partnership assets amounting to a transfer
    of assets within the meaning of Section 2(47) of the Act.
16. From the foregoing discussion it seems clear to us that regardless of its character the
    property brought into stock of the firm or acquired by the firm during its subsistence for the
    purposes and in the course of the business of the firm shall constitute the property of the firm
    unless the contract between the partners provides otherwise. On the dissolution of the firm
    each partner becomes entitled to his share in the profits, if any, after the accounts are settled

in accordance with Section 48 of the Partnership Act. Thus in the entire asset of the firm all
the partners have an interest albeit in proportion to their share and the residue, if any, after the
settlement of accounts on dissolution would have to be divided among the partners in the
same proportion in which they were entitled to a share in the profit. Thus during the
subsistence of the partnership a partner would be entitled to a share in the profits and after its
dissolution to a share in the residue, if any, on settlement of accounts. The mode of settlement
of accounts set out in Section 48 clearly indicates that the partnership asset in its entirety must
be converted into money and from the pool the disbursement has to be made as set out in
clause (a) and sub-clauses (i), (ii) and (iii) of clause (b) and thereafter if there is any residue
that has to be divided among the partners in the proportions in which they were entitled to a
share in the profits of the firm. So viewed, it becomes obvious that the residue would in the
eye of law be moveable property i.e. cash, and hence distribution of the residue among the
partners in proportion to their shares in the profits would not attract Section 17 of the
Registration Act. Viewed from another angle it must be realised that since a partnership is not
a legal entity but is only a compendious name each and every partner has a beneficial interest
in the property of the firm even though he cannot lay a claim on any earmarked portion
thereof as the same cannot be predicated. Therefore, when any property is allocated to him
from the residue it cannot be said that he had only a definite limited interest in that property
and that there is a transfer of the remaining interest in his favour within the meaning of
Section 17 of the Registration Act. Each and every partner of a firm has an undefined interest
in each and every property of the firm and it is not possible to say unless the accounts are
settled and the residue or surplus determined what would be the extent of the interest of each
partner in the property. It is, however, clear that since no partner can claim a definite or
earmarked interest in one or all of the properties of the firm because the interest is a
fluctuating one depending on various factors, such as, the losses incurred by the firm, the
advances made by the partners as distinguished from the capital brought in the firm, etc., it
cannot be said, unless the accounts are settled in the manner indicated by Section 48 of the
Partnership Act, what would be the residue which would ultimately be allocable to the
partners. In that residue, which becomes divisible among the partners, every partner has an
interest and when a particular property is allocated to a partner in proportion to his share in
the profits of the firm, there is no partition or transfer taking place nor is there any
extinguishment of interest of other partners in the allocated property in the sense of a transfer
or extinguishment of interest under Section 17 of the Registration Act. Therefore, viewed
from this angle also it seems clear to us that when a dissolution of the partnership takes place
and the residue is distributed among the partners after settlement of accounts there is no
partition, transfer or extinguishment of interest attracting Section 17 of the Registration Act.

17. 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) 1
    SCC 671] and (2) Lachhman Dass v. Ram Lal [(1989) 3 SCC 99]. Insofar as the firstmentioned 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 immovable 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 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 immovable 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 immovable 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
realisable 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 immovable 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 benamidar and that was
the dispute which was referred to arbitration. The Arbitrator made his 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.

18. In the present case, the Division Bench of the High Court concluded that the award
    required registration because of an erroneous reading of the award. The Division Bench after
    extensively reproducing from the Schedules ‘A’ to ‘F’ of the award proceeded to state in
    paragraph 39 that the allotments are exclusive to the brothers and they get independent rights
    of their own under the award in the properties allotted under the schedule and hence it is not a
    case purely of assignment of the shares in the partnership but it confers exclusive rights to the

allottees. On this line of reasoning it concluded that the award required registration. The court
next pointed out in paragraph 42 of the judgment that the award also partitions certain
immovable properties jointly owned by the disputants. In this connection it has placed
reliance on paragraph 10(c) of the award which reads as under:
(c). Other Lands and Buildings and House properties belonging to S.V. Sivalinga
Nadar & Bros. standing in the name of the firm and/or otherwise jointly owned by
the disputants. These have been allotted by us to one or other or jointly to some of the
disputants as per schedules annexed hereto.
The reasons which weighed with the Division Bench of the High Court in concluding that the
award requires registration appear to be based on an erroneous reading of the award. We have
carefully read the award and it is manifest therefrom that the Arbitrators had confined
themselves to the properties belonging to the two firms in question and scrupulously avoided
dealing with the properties not belonging to the firm. This is manifest from paragraphs 15 to
18 of the award. However, properties standing in the names of disputants, individually or
jointly, and others as benamidars but belonging to the firm also came to be included in the
distribution of the surplus partnership asset under the award. That is the purport of paragraph
10(c) extracted hereinabove. When on settlement of accounts the residue is required to be
divided among the partners in proportions in which they entitled to share profits under subclause (iv) of clause (b) of Section 48, the properties will have to be allocated to the partners
as falling to their share on the distribution of the residue and, therefore, the Arbitrators
indicated in the schedules the properties falling to the share of each brother. Mere statements
that a certain property will now exclusively belong to one partner or the other, as the case may
be, cannot change the character of the document or the nature of assignment because that
would in any case be the effect on the distribution of the residue. The property falling to the
share of the partner on the distribution of the residue would naturally then belong to him
exclusively but so long as in the eye of law it is money and not immovable property there is
no question of registration under Section 17 of the Registration Act. Besides, as stated earlier,
even if one looks at the award as allocating certain immovable property since there is no
transfer, no partition or extinguishment of any right therein there is no question of application
of Section 17(1) of the Registration Act. The reference to other land and buildings and house
properties jointly owned by the disputants in clause (c) of paragraph 10 of the award merely
indicates that certain properties belonging to the firm stood in the names of individual
partners or in their joint names but they belonged to the firm and, therefore, they were taken
into account for the purpose of settlement of accounts under Section 48 of the Partnership Act
and distributed on the determination of the residue. The award read as a whole makes it
absolutely clear that the Arbitrators had confined themselves to the properties belonging to
the two firms and had scrupulously avoided other properties in regard to which they did not
reach the conclusion that they belonged to the firm. On a correct reading of the award, we are
satisfied that the award seeks to distribute the residue after settlement of accounts on
dissolution. While distributing the residue the Arbitrators allocated the properties to the
partners and showed them in the schedules appended to the award. We are, therefore, of the
opinion that on a true reading of the award as a whole, there is no doubt that it essentially

deals with the distribution of the surplus properties belonging to the dissolved firms. The
award, therefore, did not require registration under Section 17(1) of the Registration Act.

19. For the above reasons, we allow these appeals and set aside the impugned orders of
    the Division Bench and remit the matters to the Division Bench for answering the other
    contentions which arose in the appeal before it but which were not decided in view of its
    decision on the question of registration of the award. We also make it clear that the award
    which is pending for registration may be registered by the Sub-Registrar notwithstanding the
    objection raised by one of the partners, S.V. Sivalinga Nadar through his lawyer if that is the
    only reason for withholding registration. The appeals are allowed accordingly with costs.