AI Structured Summary
Not yet generated for this judgment
Judgment
Shah, C.J.—This appeal arises out of execution proceedings. The Respondents had mortgaged the property to the Appellant''s father Keshavji Lalji for Rs. 6500/- and the dispute in respect of the mortgage and other dealings incidental thereto was referred to arbitration. The arbitrators made an award on 6-8-1950 awarding Rs. 7875/- to the creditor the same being payable by instalments and directing that in default of payment of any instalment in time, the entire sum due may be realized by selling the mortgaged property and from the sum due to the Respondents under Anr. equitable mortgage. The Plaintiff filed a suit on the award and the Defendants having admitted the award by their written statement, a decree was passed in terms thereof on 9-8-1950. The Plaintiff having sought execution by sale of the mortgaged property the Defendants objected on the ground that the award was compulsorily registrable u/s 17(1)(b), Registration Act and not having been so registered the decree passed thereon was a nullity and was not executable. The contention was upheld by the learned Judge below who dismissed the Darkhast holding that the decree was a nullity. Other objections were also taken by the Defendants but they were not pressed in the lower Court.
On appeal Mr. Mehta for the Appellant Plaintiff has urged two points, first, that the award was based on a registered mortgage deed and it did not therefore attract the provisions of Section 17(1)(b), Registration Act and was not compulsorily registrable, and second that even if the award was compulsorily registrable the executing Court could not question the legality and validity of the decree and was bound to execute the decree as it stood. The learned Judge below has not enquired into the question whether the award here was compulsorily registrable and he observes in his order that the point was conceded by the pleader for the decree-holder. The concession made by the learned pleader however is, as appears from the lower Court''s order, that an award was compulsorily registrable. That position is not disputed before me by Mr. Mehta, but his contention is that the award here being an award on a registered mortgage is not covered by Section 17(1)(b), and that this question ought to have been enquired into by the lower Court. Even if the learned pleader for the decree-holder had conceded in the lower Court that the award in question was required to be registered, the question being one of law, the admission made by the pleader is not conclusive, and does not preclude the decree-holder from contending that the award was not compulsorily registrable and that the lower Court''s order is vitiated on that ground.
The award, Exh. 2, is on a mortgage debt and other dealings, but these latter are incidental thereto. It also covers the dues on an equitable mortgage in favour of the debtors, but these again were the subject of the mortgage and formed part thereof. It must be taken therefore that the award in this case was on a mortgage. Section 17(1)(b) makes a document compulsorily registrable if it purports or operates to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property. Now the award does not by itself create or declare any interest in immovable property and though it directs that the mortgaged property be sold in default of payment, that right was already created in favour of the mortgagee by the mortgage itself. By directing that the mortgaged property be sold for realising the amount, the award merely narrates a transaction which had already taken place. There is a vital distinction between a mere recital of a fact and something which in itself creates a title. Therefore where an award in dispute between a mortgagor and a mortgagee states that the mortgagor was to pay the amount due by certain instalments and in default the amount was to be realized through Court by sale of the mortgaged property, the award merely states the fact and does not create a title. This was held in - ''Lahore Central Co-operative Bank v. Qadir Bakhsh AIR 1947 PC 117 (A), where the facts were almost the same as those of the present case and the decision applies here completely. The earlier Privy Council decision in - AIR 1932 55 (Privy Council) ), was there followed. In that case it was held that the word "declare" in Section 17 implies a definite change of legal relation to the property by an expression of will embodied in the document referred to and does not contemplate a mere statement of fact. (See also - ''Chotirmal Khushaldas v. Laloomal Nariomal AIR 1935 Sind 136 (C) ). Therefore the award in dispute is not compulsorily registrable and the contention that no decree can be passed on an unregistered award by reason, of Section 49 of the Registration Act is untenable. The lower Court''s finding, founded on the hypothesis that the award being a compulsorily registrable document and not having been so registered, the decree could not have been passed, and is a nullity, has therefore no real basis, and on this ground alone its order deserves to be set aside.
The second point urged for the Appellant is that the executing Court had no jurisdiction to question the decree even if the award was held to be compulsorily registrable and on that account hit by Section 49, Registration Act. There is some divergence of view on this point and so far as the Bombay High Court is concerned it has consistently held that the executing Court has no powers to go behind the decree and to question its legality or validity in a case like the present. In - ''Hanmantaguda v. Shivappa Dunadapp 42 B LR 1123 (D), Mr. Justice Rangnekar has considered the question and has observed as follows:
Assuming, however, that the award required registration and that the award decree was compulsorily registrable, the question is: Is it open to the Appellants to raise the question in execution proceedings? I think, not. An executing Court cannot go behind the decree and cannot question the legality, validity or correctness of the decree. It must take the decree as it stands, and if the decree is subsisting and there is no question of limitation, it must proceed to execute the decree. This principle, I think, has been accepted by all the Courts, although there does appear to be a difference of opinion between some of the High Courts in this country on the question as to whether a party can challenge a decree in execution proceedings, if it is apparent on the face of the decree that the Court passing the decree had no territorial or personal jurisdiction over the matter.
In - ''Krishnaji Kondo v. Narayan Anant AIR 1942 Bom. 132 (E), a Division Bench of the Bombay High Court has held that if the decree was based on an award which though compulsorily registrable u/s 17(1)(b) is unregistered and therefore inadmissible in evidence it can be impeached in a proper proceeding, such as an appeal, review or revision. If it has not been set aside or challenged in a proper proceeding it cannot be treated as a nullity but would be binding on the parties. Following this decision it was held in - Saburdas Mahasukhram Gandhi Vs. Gopalji Nandas Patel, , that a decree based on an unregistered award creating a charge on immovable property is valid though it is unregistered, unless it is impeached in a proper proceeding, such as an appeal, review or revision. In this case as also in - AIR 1942 Bom 132 (E) it was also, held, though that position does not arise here, that at any rate a stranger to the proceeding cannot challenge the validity of the decree or underrate its effect on the ground that the decree was founded upon an award which ought not to have been admitted in evidence, and as pointed out in Saburdas Mahasukhram Gandhi Vs. Gopalji Nandas Patel, the remedy of the stranger was a suit for a declaration that his interest cannot be affected by a decree which, according to him, was collusive. In - Himatlal Motilal Vs. Commr. of Income Tax and E.P. Tax, , Dixit J. has stated the rule as follows:
Now, the principles as regards the power of an executing Court are well settled. An executing Court cannot question the validity, legality or correctness of a decree. Its duty is to execute the decree except where it is shown that the Court passing a decree had no inherent jurisdiction to pass it.
The same view was taken in - AIR 1943 165 (Nagpur) . That was also a case of decree on an unregistered award, and it was held that such a decree is no more a nullity than a decree obtained in an ordinary suit on an unregistered mortgage or sale deed which requires registration, and that the decree cannot be questioned in execution. On similar facts the Allahabad High Court has held in - ''Sagar Mal v. Parsottam Das AIR 1942 All 36 (I), that there is no right of suit for the avoidance of a decree based on an award. A fortiori therefore the decree cannot be questioned in execution proceedings. In - Radha Mohan Vs. Mrs. Jane Hilt and Another, , an objection was taken to the validity of the decree on the ground that it was passed against the provisions of Section 214, Succession Act, but this objection was repelled by the learned Judges.
There is however a decision of the Nagpur High Court in - ''Uttamchand Motilalji v. Wasudeo Deorao A.I.R 1946 Nag 311 (K) to the contrary. There the judgment-debtor owed money to the decree-holder and the dispute having been submitted to arbitration an award was made which provided for a charge on certain immovable property. A decree was passed in terms of the award, and a dispute having arisen in execution proceedings whether the award required registration and if it was not registered whether the decree based thereon would be operative, it was held that the award required registration, and on the question whether the executing Court can question the validity of the decree, it was held that though as a general rule this cannot be done, where it is patent that a decree is in fact passed without jurisdiction or is a nullity the executing Court is entitled to question the validity of the decree. It was further held that as in that case no decree could be passed on the basis of an award which required registration, it must follow that the decree in respect of the charge was a nullity in that it was one which the Court was incompetent to pass. The ratio of the decision appears to be that the absence of jurisdiction could be ascertained without an enquiry into the facts. AIR 1943 165 (Nagpur) '' was not cited and not considered in that case. Moreover the real point was not a question of jurisdiction, but whether the decree was not erroneous on the ground of being based on an unregistered document. The decision is contrary to the accepted rule that it is only where it is shown that the Court passing a decree had no inherent jurisdiction, territorial or pecuniary, that the decree can be questioned by an executing Court, and, with respect, this decision is not correct.
In - Bhawani Shankar Vs. Mahmud Ali and Another , which is a decision of a single Judge, the decree was based on a compromise and was compulsorily registrable, and it was held that in holding that the decree was not capable of execution, the Court cannot be said to be going behind the decree. There also, there was no question of jurisdiction of the decreeing Court. I am unable to follow this ruling for the same reasons The better view in my judgment is the one taken by the Bombay High Court and by the Nagpur High Court in - AIR 1943 165 (Nagpur) ''. Admittedly there is no question here of the decreeing Court''s territorial or pecuniary jurisdiction, and, in accordance with the view which I accept, it must be held that it was not open to the lower Court to question the validity or the legality of the decree in the present case, and it was bound to execute it. For these reasons I allow the appeal, set aside the order of the lower Court and direct the lower Court to proceed with the further execution of the decree. The Respondents to pay the Appellant''s costs of the appeal and to bear their own. The costs in the lower Court will abide the result of the Darkhast.