Rajeswari & Ors. Vs Shanmugam & Anr. (Supreme Court of India)
No Sale, No Title, No Registration: Assignment of Specific-Performance Decree Needs No Registration -Supreme Court Settles Decree-Assignment Law
The Supreme Court considered whether a deed assigning a decree for specific performance of an agreement to sell immovable property must be registered under Section 17(1)(e), Registration Act, 1908. The appellants—legal heirs of the judgment-debtor—argued that the decree-holder’s assignment of the specific-performance decree (Ex.B1), being unregistered, was invalid & incapable of execution.
The Executing Court accepted this contention & set aside the execution, relying on K. Bhaskaram (AP HC), which held that assignment of such decrees involves transfer of interest in immovable property & therefore requires registration. The High Court reversed this, holding that a decree for specific performance confers only a right to obtain conveyance through court, not any present right or title in the property, & therefore an assignment of such a decree does not require registration.
The Supreme Court examined the nature of a decree for specific performance, reaffirming that it does not itself create any right, title, or interest in immovable property. Ownership passes only when a registered sale deed is executed, either by the judgment-debtor or through the court in execution. The Court relied on Babu Lal, Suraj Lamp, & earlier jurisprudence to hold that a specific-performance decree is akin to a preliminary decree; the underlying contractual obligations continue, & the decree merely entitles the decree-holder to seek conveyance.
Because the decree itself does not create or assign any interest in immovable property, Section 17(1)(e)—which demands registration only when the decree “purports or operates to create, declare, assign, limit or extinguish” rights in immovable property—does not apply. The assignment of the decree transfers only the right to seek execution, which is fully permitted under Order 21 Rule 16 CPC.
The Court expressly disapproved the contrary holding in K. Bhaskaram, noting it was based partly on admissions & misapplication of principles, & upheld the Bombay High Court view in Amol v. Deorao that assignment of a specific-performance decree does not require registration.
The Court rejected the argument that allowing unregistered assignments would result in revenue loss, observing that no transferee gains any property right until actual execution & registration of a sale deed.
Concluding that the assignment deed did not require registration, the Court held that the Executing Court erred in refusing execution, & the High Court’s order was correct. The appeal was dismissed.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
