Kiran Raj

The Supreme Court of India Division Bench of Justice J.B. Pardiwala and Justice K.V. Viswanathan held on Wednesday (November 19) that a decree directing specific performance of an agreement to sell may be transferred to another person even if the deed of assignment is not registered, because such a decree does not, by its own force, create any proprietary interest that would attract mandatory registration. The dispute concerned whether an assignee could seek execution of the decree despite the assignment document being unregistered. The Court concluded that the decree merely enables enforcement of the underlying contractual obligation, upheld the High Court’s view permitting execution by the assignee, and rejected the challenge to the assignment’s validity.

The matter arose from a decree for specific performance granted in 1993 by a Sub Court in Tamil Nadu, directing the defendant to receive the balance sale consideration, execute a sale deed for the immovable property, and deliver possession. The decree-holder later assigned his rights under this decree to another individual through a written assignment executed in 1995, stating that the assignee would pursue execution and obtain the sale deed. The assignee subsequently initiated execution proceedings seeking recognition of the assignment and completion of the transfer.

Also Read: Justice Bhuyan Cites “Deadly Delhi Smog” In Dissent Opposing Supreme Court Move Toward Post-Facto EC, Says Court Must Not Retreat From Established Environmental Principles

In 2008, the Executing Court ordered execution of the sale deed in favour of the assignee. The legal heirs of the original judgment-debtor then filed an application under Section 47 of the Code of Civil Procedure, contending that the assignment could not be acted upon because it had not been registered as required under the Registration Act. They argued that the decree and the assignment involved rights relating to immovable property, thereby triggering compulsory registration.

The assignee opposed this, submitting that a decree for specific performance does not itself create any interest in the property but only grants a right to obtain a conveyance through the court process. Both sides referred to Section 17 of the Registration Act and judicial precedents to support their respective positions.

The Court examined the nature of a decree for specific performance and recorded that “neither an agreement of sale nor a decree passed on the basis of 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 either by the judgment-debtor himself or by the Court itself in case the judgment-debtor fails to execute the sale deed.”

It noted that the statutory definition of a contract for sale under the Transfer of Property Act states that it “does not, of itself, create any interest in or charge on such property.” The Court further stated that “the contract between the parties is not extinguished, upon passing of a decree and it subsists notwithstanding the decree.”

When analysing Section 17(1)(e) of the Registration Act, the Court recorded that registration is required only when a decree “purports or operates to create, declare, assign, limit or extinguish… any right, title or interest… to or in immovable property.” Applying this provision, it observed that “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 referred to the reasoning of the Bombay High Court and noted that a decree for specific performance “does not elevate the status of a decree-holder… to that of the owner of the property in question” and that “mere passing a decree for specific performance of contract does not result in the transfer of property.” It also acknowledged that such a decree is “in the nature of a preliminary decree” and remains subject to further judicial supervision until execution.

Addressing the assignability of decrees, the Court quoted Order 21 Rule 16 CPC, noting that “the transferee may apply for execution of the decree to the Court which passed it; and the decree may be executed in the same manner and subject to the same conditions as if the application were made by such holder.”

Also Read: “It’s A Mess”: Delhi HC Slams BCI On Foreign Law Firm Rules; Cautions Against ‘Castigating’ CMS IndusLaw & Dentons; Interim Bar Extended

Responding to concerns that registration could be avoided by repeated assignments, the Court recorded that “if a party after obtaining an assignment deed does not execute the decree, no right will enure to it in the immovable property.” It also stated that “the holding to the contrary in K. Bhaskaram… does not lay down the correct law.”

The Court recorded: “the assignment deed (Exhibit B1) assigning the decree of specific performance in this case did not require registration. The Executing Court which denied execution of the decree was clearly wrong and the High Court which set aside the judgment of the Executing Court was clearly right. The appeal is dismissed. No order as to costs.”

Advocates Representing the Parties

For the Petitioners: Mr. Jayanth Muth Raj, Sr. Adv. Mrs. Malavika Jayanth, AOR Ms. Isha Singh, Adv.
For the Respondents: Mr. G. Balaji, AOR Ms. Arzu Paul, Adv. Mr. Neeleshwar Pavani, Adv.

Case Title: Rajeswari & Ors. v. Shanmugam & Anr.
Neutral Citation: 2025 INSC 1329
Case Number: Civil Appeal No.13835 of 2025; SPECIAL LEAVE PETITION (CIVIL) NO. 3532 of 2018
Bench: Justice J.B. Pardiwala, Justice K.V. Viswanathan