Does Assignment of a Specific Performance Decree Require Registration?

The question whether an assignment of a decree of specific performance requires compulsory registration under the Registration Act, 1908, has long puzzled courts, litigants, and conveyancing lawyers. This is because such decrees relate to immovable property, yet—as settled—do not in themselves create title or transfer ownership. Conflicting High Court decisions had deepened the uncertainty until the Supreme Court, in Rajeswari & Ors. v. Shanmugam (2025), authoritatively resolved the issue.

In this landmark judgment, the Court held that an assignment of a decree for specific performance does not require registration, because such a decree does not itself create or assign any right, title, or interest in immovable property, but merely confers a right to seek enforcement of a contract through the court.

Facts of the Case

The dispute arose from a decree of specific performance passed in O.S. No.100/1989 by the First Additional Sub Court, Erode. The relevant facts are as follows:

1. The Original Decree (1993)

A decree was passed on 13.09.1993 directing the defendant to:

• execute the sale deed for the suit property upon receiving the balance sale consideration, and
• failing this, permit the plaintiff to obtain execution through court.

The decree also awarded costs.

2. Assignment of the Decree (1995)

The original decree-holder (plaintiff) assigned the decree to the first respondent Shanmugam through an assignment deed dated 17.07.1995. Under the deed:

• The assignee paid ₹20,000 to the decree-holder.
• All rights and interests arising from the suit, appeal, and decree were transferred to the assignee.

3. Execution Petition (2004)

Shanmugam filed E.P. No.150/2004, seeking:

• recognition of the assignment,
• execution of the sale deed, and
• delivery of possession.

The Executing Court allowed execution on 13.03.2008.

4. Objection by the Legal Heirs of the Judgment-Debtor (2009)

The appellants (legal heirs of the deceased judgment-debtor) filed E.A. No.180/2009 under Section 47 CPC, arguing:

• The assignment deed was unregistered,
• Therefore, it was invalid, and
• Execution could not proceed.

5. Executing Court’s Decision (2010)

The Executing Court agreed with the appellants, holding that:

• An assignment of a decree relating to immovable property requires compulsory registration.
• Hence, an unregistered assignment is invalid.
• Execution cannot proceed.

This view relied on the Andhra Pradesh High Court judgment in K. Bhaskaram v. Mohammad Moulana (2005).

6. High Court’s Decision

The Madras High Court reversed the Executing Court, relying on the Allahabad High Court’s view in Mumtaz Ahmad v. Sri Ram (1913), holding:

The decree does not create rights in immovable property.

Therefore, the assignment of such a decree does not require registration.

7. Appeal to the Supreme Court

The legal heirs of the judgment-debtor appealed, leading to the present decision.

Issue Before the Supreme Court

The Supreme Court framed the central issue as follows:

• Whether a deed assigning a decree for specific performance of an agreement of sale of immovable property requires compulsory registration under Section 17(1)(e) of the Registration Act, 1908?

Judgment and Reasoning

The Supreme Court dismissed the appeal and upheld the High Court’s view. The reasoning is structured around several key findings.

1. A Decree for Specific Performance Does Not Create Ownership or Property Rights

The Court began by re-emphasising a settled position: neither an agreement to sell nor a decree for specific performance transfers title or creates an interest in immovable property.

This is based on:

• Section 54, Transfer of Property Act – a contract for sale does not create any interest or charge in property;
• Suraj Lamp (2012) – title passes only by a registered sale deed, never by agreement;
• Babu Lal (1982) – a decree for specific performance is like a preliminary decree; the title passes only when a sale deed is executed.

Thus:

“The decree does not elevate the decree-holder to the status of owner. Rights flow only from the registered sale deed.”

2. Contract Continues Even After the Decree

The Court relied on Section 28 of the Specific Relief Act:

• Even after a decree for specific performance, the contract continues to exist.
• If the purchaser defaults, the vendor may apply for rescission even after decree.
• This shows the decree is not a final transfer of rights.

Thus, the decree is not a conveyance but an enforcement mechanism.

3. Meaning and Scope of Section 17(1)(e) of the Registration Act

Section 17(1)(e) requires registration of instruments assigning decrees only when the decree itself purports or operates to create, declare, assign, limit or extinguish rights in immovable property.

The Court held:

• A decree for specific performance does not create any such rights.
• Therefore, the assignment of such a decree falls outside the scope of Section 17(1)(e).

In simple terms:

If the decree does not create property rights, assigning it cannot amount to transferring property rights.

4. Assignment Transfers Only the Right to Enforce the Decree, Not Property Rights

The Court emphasised that what is being assigned is:

• the right to seek execution,
• the right to obtain a sale deed,
• the benefit of the decree.

Not property.

Order 21 Rule 16 CPC explicitly recognises this:

An assignee of a decree may apply for execution, as if he were the decree-holder.

Thus, assignment is permitted without needing registration.

5. Rejection of the Andhra Pradesh High Court’s View

The Supreme Court overruled K. Bhaskaram (AP HC), observing:

• The decision incorrectly assumed that specific performance decrees create rights in immovable property.
• It was thus wrongly concluded that their assignment requires registration.

The Court held that Bhaskaram “does not lay down the correct legal position”.

6. No Loss of Stamp Duty or Revenue

The appellants argued that if assignments are allowed without registration, parties may avoid stamp duty by repeatedly assigning the decree instead of executing a sale deed.

The Court rejected this completely:

• Stamp duty becomes payable only upon execution of a registered conveyance, not earlier.
• Multiple assignments confer no ownership.
• If the assignee never executes the sale deed, he never acquires the property, and the State loses nothing.

Thus, fears of revenue leakage are unfounded.

7. Assignability of Contractual Rights is Lawful

Relying on Khardah Company Ltd. v. Raymon (1962) and Kapilaben v. Ashok Kumar (2020), the Court reiterated:

• Rights under a contract are assignable unless the contract is personal in nature.
• Obligations cannot be assigned without consent.

Here, the decree-holder assigned only the right to enforce the decree, not obligations.

Thus, an assignment is legally permissible and needs no registration.

Conclusion

The Supreme Court has finally settled a long-standing legal controversy. By holding that the assignment of a decree for specific performance does not require registration, the Court has reaffirmed the fundamental principles of property law:

• a contract for sale does not create an interest;
• a decree for specific performance does not create ownership;
• only a registered conveyance transfers title.

This judgment brings clarity, predictability, and doctrinal coherence, ensuring that procedural objections do not obstruct substantive justice. It also preserves the delicate balance between contract law, property law, and registration law—ensuring that rights are transferred only through the formal mechanisms mandated by statute.

In effect, the decision strengthens the enforceability of judicial decrees while preventing unwarranted hurdles in execution proceedings, thereby advancing the rule of law.

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