Assignment of a decree for specific performance did not require registration, Supreme Court holds

A bench of Justices J.B. Pardiwala and K.V. Viswanathan heard an appeal challenging whether a deed assigning a decree for specific performance of an agreement for sale of immovable property required registration under Section 17(1)(e) of the Registration Act, 1908. The question arose after the executing court refused to proceed on the ground that the assignment deed was not registered, the High Court allowed revision and directed execution, and the property-owner’s heirs brought the matter to this Court.

The Court held that a decree for specific performance of a contract for sale did not, by itself, create, declare or assign any right, title or interest in immovable property and therefore an instrument assigning such a decree was not compulsorily registrable under Section 17(1)(e). The Court upheld the High Court’s revision order and dismissed the appeal. The Court, in its reasoning, observed: “If we analyze Section 17(1)(e) of the Registration Act on which the case of the appellant pivots, it will be clear that what this section prescribes is that registration is mandatory only for non-testamentary instruments transferring or assigning any decree or order of a Court or any award when such decree or order or award 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. In this case, when the decree itself which is for specific performance does not create or purport to create any right, title or interest in any immovable property, the question of registering an instrument assigning such a decree cannot arise.” The Court further noted passages from earlier authorities that “neither an agreement of sale nor a decree passed on that basis for specific performance of the contract gives any right or title to the decree-holder and the right and title passes to him only on the execution of the deed of sale.”

Background

The dispute arose from a 1993 decree for specific performance in O.S. No.100/1989 (First Additional Sub-Court, Erode) in favour of the decree-holder in a suit for enforcement of a sale agreement. The decree directed the defendant to execute the sale deed on receipt of balance consideration and permitted the plaintiff, failing that, to obtain a sale deed through the court. The decree recorded, inter alia, that “The defendant is to receive the balance sale consideration and execute the sale of suit schedule property without any encumbrance in favour of the plaintiff.”

An assignment deed dated 17.07.1995 transferred the decree and, according to its terms, recited that “Henceforth, all rights and interests arising out of the said suit, appeal, and decree shall belong solely to you.” The assignee filed execution proceedings and, following an order dated 13.03.2008, sought execution of the sale deed. The legal heirs of the judgment-debtor filed an application under Section 47 CPC arguing that the assignment deed was unregistered and therefore not enforceable; the executing court accepted that position relying on a High Court of Andhra Pradesh decision and set aside execution.

On revision the High Court allowed the assignee, holding that a decree for specific performance conferred only a right to obtain sale through the process of law and did not create a registrable interest in immovable property; the assignment did not require registration. The present appeal contested that view.

Before this Court, petitioners argued that Section 17(1)(e) made registration of an assignment of a decree compulsory where the decree “purports or operates to create, declare, assign, limit or extinguish … any right, title or interest … to or in immovable property.” The assignee contended that the decree did not create title and that only execution of a sale deed could transfer ownership; thus Section 17(1)(e) did not apply. The Court examined statutory provisions (Transfer of Property Act Sections 54, 55), Section 28 of the Specific Relief Act and precedents including Suraj Lamp & Industries and other authorities. The Court found that the earlier decision relied upon by the executing court (K. Bhaskaram) was incorrect on the registration issue and that the High Court correctly set aside the executing court’s order. The appeal was dismissed and the High Court judgment was affirmed. No costs were ordered.

Case Details: Case No.: CIVIL APPEAL NO.13835 OF 2025 (@ SLP (C) NO.3532 OF 2018); 2025 INSC 1329 Case Title: Rajeswari & Ors. v. Shanmugam & Anr. Appearances: For the Petitioner(s): Mr. Jayanth Muth Raj, Senior Counsel For the Respondent(s): Mr. R. Ganesh, Advocate for Respondent No.1; Respondent No.2 served but did not appear