- (1.) Heard counsel for the parties. Even if it is assumed for the sake of argument that a charge was created by the award made by the arbitrator, it cannot be said to be effective in law. The charge becomes effective only when the award is made a rule of the court and that was done in this case on 24-11-1970 whereas the attachment by the Tax Revenue Officer under theprovisions of Schedule II to the Income Tax Act, 1961 was earlier, i. e. , on 4/11/1970. In this view of the matter, the High court was right in taking the view it did.
(2.) Appeal is accordingly dismissed. No costs.
(3.) The appellant had instituted a suit against a third party for recovery of money. In that suit, the matter was referred to arbitration. The arbitrator passed an award in the year 1966 in which he is stated to have, inter alia, created a charge on the properties of the said third-party borrower in favour of the appellant. The appellant applied for making the award a rule of the court. The borrower contested the same but ultimately there was a compromise between them. The court made the award a rule of the court in terms of the compromise by its order dated 24/11/1970. Clause (6 of the compromise decree reads thus: "Charge on the properties as ordered by the Hon'ble court on 26/3/19666 will continue till the entire decretal amount is paid in full. " For understanding clause (6, it is necessary to see what are the terms of the order dated 26/3/1966. It reads as follows: "Ad interim injunction is issued restraining the respondents from selling, disposing of or from creating any charge, lien or interest on the following properties, Kizhakke Kotharam Building, Kulathunkal Office Building, situated at Trivandrum and a vacant plot situated at Trivandrum and a vacant plot situated at Cochin as described in the arbitration agreement till further orders of this court. Notice of this application also given to the respondents and copy of the order be sent to the Sub-Registrar, Trivandrum and Cochin. "the reading of the said two clauses together would show that though clause (6 of the compromise decree uses the word "charge", the decree did not really create a charge upon the properties as understood under the Transfer of Property Act, 1882. What was done was merely to continue the order dated 26/3/1966 - order of injunction restraining alienation etc.- till the entire decretal amount is paid. The court making the award a rule of the court continued the said order till the full payment of the decretal amount. No charge was created under the said order.;