Assignment of a Decree for Specific Performance Does Not Create Title, Needs No Registration: Supreme Court

“A decree for specific performance merely affirms a contractual right—it does not transfer ownership in immovable property” –  In a significant pronouncement on 19th November 2025, the Supreme Court of India firmly ruled that a deed assigning a decree for specific performance of a contract for sale of immovable property does not require registration under Section 17(1)(e) of the Registration Act, 1908.

While upholding the High Court’s verdict, a Bench comprising Justice J.B. Pardiwala and Justice K.V. Viswanathan emphasized that the decree itself does not create or transfer any title or interest in property, and therefore, assigning such a decree does not attract the rigours of compulsory registration. The Court categorically stated:

“Neither a contract for sale nor a decree passed on that basis for specific performance gives any right or title to the decree-holder. 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 in case he fails to execute the sale deed.”

This authoritative interpretation finally settles a long-standing conflict in execution jurisprudence concerning the assignability and enforceability of decrees related to specific performance.

“What Is Assigned Is A Right To Enforce – Not A Right In The Property”: Court Rejects Misinterpretation of Registration Act

At the heart of the dispute was a decree dated 13.09.1993, passed in a suit for specific performance filed by the predecessor-in-interest of Respondent No. 1, Shanmugam. The decree mandated execution of a sale deed in respect of the suit property. Later, through an assignment deed dated 17.07.1995, the original decree-holder assigned all his rights to Shanmugam.

However, the legal heirs of the judgment-debtor challenged the execution proceedings on the ground that the assignment deed was unregistered, relying on the Andhra Pradesh High Court’s decision in K. Bhaskaram v. Mohammad Moulana. They contended that since the decree related to immovable property, registration under Section 17(1)(e) of the Registration Act was mandatory.

The Executing Court accepted this argument and refused execution. But the High Court reversed the decision, holding that no interest in property is transferred by such a decree or its assignment—a view now emphatically affirmed by the Supreme Court.

“A Decree for Specific Performance Is Not a Conveyance—It Is a Judicial Declaration of Entitlement to One”

The Court launched into a detailed discussion on the nature of a decree for specific performance, clarifying its limited legal effect. The judgment extensively quoted earlier decisions and legal treatises to illustrate that such a decree is merely declaratory and does not, by itself, create any ownership interest. The Bench explained:

“It is only upon the registration of such a sale-deed upon payment of stamp duty... that any right, title and interest in such property shall validly pass on to the decree-holder, who is the purchaser of the suit property.”

The Court invoked Section 54 of the Transfer of Property Act, 1882, reiterating that an agreement to sell or even a decree for specific performance “does not, of itself, create any interest in or charge on such property.” This principle was reinforced by citing the landmark judgment in Suraj Lamp & Industries v. State of Haryana, where the Supreme Court had unequivocally held that ownership passes only through a duly executed and registered sale deed.

“Section 17(1)(e) Does Not Cover Decrees That Do Not Operate to Create or Declare Title”

In dissecting Section 17(1)(e) of the Registration Act, the Court made a pivotal observation:

“What this section prescribes is that registration is mandatory only for non-testamentary instruments transferring or assigning any decree when such decree... purports or operates to create, declare, assign, limit or extinguish any right, title or interest in immovable property.”

The Court clarified that since a decree for specific performance does not create or declare any interest, its assignment cannot be said to fall within the scope of Section 17(1)(e). The Court ruled:

“When the decree itself... does not create or purport to create any right, title or interest... the question of registering an instrument assigning such a decree cannot arise.”

This interpretation also resolved confusion stemming from the earlier Andhra Pradesh High Court decision in K. Bhaskaram v. Mohammad Moulana, which was expressly overruled in this judgment. The Court observed:

“The holding to the contrary in K. Bhaskaram... does not lay down the correct law.”

“Assignment of Decree Is Valid and Executable Without Registration – Court Recognizes Contractual Rights, Not Title”

The Court further noted that Order 21 Rule 16 of the CPC clearly allows execution by the transferee of a decree, provided the assignment is in writing. There is no statutory requirement for registration in such cases. The judgment also invoked Section 15 of the Specific Relief Act, which permits assignees to seek specific performance, barring contracts of a personal nature.

“The specific performance decree merely recognizes a right to enforce a contract—it does not transform the assignee into the owner.”

Addressing the appellants’ concern that non-registration would allow repeated assignments and deprive the state of revenue, the Court dismissed this as speculative:

“If a party after obtaining an assignment deed does not execute the decree, no right will enure to it in the immovable property. Hence, the argument that there will be loss of revenue to the State is not tenable.”

“Court Retains Control Even After Decree—Contract Is Not Extinguished Until Execution”

The Bench underscored the continuing jurisdiction of the court even after granting specific performance, pointing to Section 28 of the Specific Relief Act, which permits rescission of contract if the purchaser fails to pay or perform his obligations. The judgment stressed that:

“The decree for specific performance is in the nature of a preliminary decree... the court continues to retain its control over the entire matter.”

The Court relied on Hungerford Investment Trust Ltd. v. Haridas Mundhra, where it was held that a decree for specific performance does not extinguish the contract—it survives, and both parties remain bound by their obligations.

Assignment of Specific Performance Decree Needs No Registration—Ownership Passes Only by Registered Sale Deed

Ultimately, the Court concluded that no registration is required for a deed assigning a decree for specific performance, as such a decree does not create or convey any interest in immovable property. Upholding the High Court’s order allowing execution by the assignee, the Court stated:

“The Executing Court which denied execution of the decree was clearly wrong and the High Court which set aside the judgment... was clearly right.”

The appeal was accordingly dismissed, with the Supreme Court declaring that Exhibit B1—assignment deed—is valid and enforceable in law.

Date of Decision: 19 November 2025