Assignment of a decree for specific performance does not require registration

Assignment of a decree for specific performance does not require registration

Supreme Court Clarifies Non-Requirement of Registration for Assignment of Decree in Specific Performance Cases. Landmark Judgment Determines No Transfer of Interest in Immovable Property through Decree Assignment

In a pivotal decision, the Supreme Court of India on November 19, 2025, ruled that an assignment deed for a decree of specific performance of an agreement to sell immovable property does not require registration under Section 17(1)(e) of the Registration Act, 1908. The ruling came in the civil appeal titled Rajeswari v. Shanmugam, where the appellants challenged the execution of a sale deed based on the claim that the assignment of the decree was invalid due to non-registration.

The judgment, delivered by Justices J.B. Pardiwala and K.V. Viswanathan, emphasized that a decree for specific performance does not, in itself, create or transfer any right, title, or interest in the immovable property. Instead, it merely confers the right to obtain a sale deed through the legal process, thereby negating the necessity for registration of an assignment of such a decree.

The case originated from a legal dispute in Tamil Nadu, where the legal heirs of a judgment debtor contested the execution proceedings initiated by Shanmugam, who claimed to be the assignee of the decree for specific performance dated 13 September 1993. The appellants argued that the assignment deed was unenforceable as it was not registered. The executing court initially sided with the appellants, relying on a precedent from the High Court of Andhra Pradesh, which mandated registration for such assignments. However, the High Court reversed this decision, prompting an appeal to the Supreme Court.

In its detailed judgment, the Supreme Court examined the nature and effect of decrees for specific performance, holding that these decrees do not extinguish the underlying contract but rather retain the contract's subsistence until the sale deed is executed and registered. The court cited various precedents, including Babu Lal v. M/s Hazari Lal Kishori Lal, and underscored that a decree for specific performance is akin to a preliminary decree, which does not immediately transfer ownership.

The ruling further analyzed Section 17(1)(e) of the Registration Act, clarifying that registration is compulsory only for instruments that operate to create or transfer interest in immovable property. Since a decree for specific performance does not fulfill this criterion, its assignment is exempt from registration requirements.

Legal experts have hailed the judgment as a significant clarification of the law, potentially reducing litigation concerning assignment deeds and registration issues in specific performance cases. By affirming that no interest is created in immovable property until the execution and registration of a sale deed, the Supreme Court has reinforced the distinction between contractual obligations and property rights.

The decision brings clarity to the rights of assignees under decrees for specific performance, allowing them to execute such decrees without the hurdle of registration, provided the decree itself does not transfer property rights. The court's interpretation aligns with its previous judgments, maintaining consistency in its approach to property law and specific relief.

Bottom Line:

Assignment of a decree for specific performance of an agreement of sale of immovable property does not require registration under Section 17(1)(e) of the Registration Act, 1908, as the decree itself does not create or transfer any right, title, or interest in the immovable property.

Statutory provision(s): Registration Act, 1908 Section 17(1)(e), Specific Relief Act, 1963 Sections 15 and 28, Civil Procedure Code, 1908 Order 21, Rule 16

Rajeswari v. Shanmugam, (SC) : Law Finder Doc Id # 2810518