Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
2025 INSC 1329
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.13835 OF 2025
(@ SPECIAL LEAVE PETITION (CIVIL) NO. 3532 of 2018)
Rajeswari & Ors. …Appellant(s)
Versus
Shanmugam & Anr. …Respondent(s)
J U D G M E N T
K.V. Viswanathan, J.
1. Leave granted.
2. Should a deed assigning a decree for specific
performance of an agreement of sale of immovable property,
be registered under the provisions of the Registration Act,
1908, is the question that presents itself for consideration in
this case.
BRIEF FACTS: -
3. The appellants are the legal heirs of the judgment-
Signature Not Verified
Digitally signed by
CHANDRESH
Date: 2025.11.19
13:50:10 IST
Reason:
debtor. Their predecessor suffered an ex-parte decree on
Page 1 of 28
13.09.1993 in O.S. No.100/1989 before the First Additional Sub
Court, Erode, Tamil Nadu. The first Respondent herein-
Shanmugam claims to be the assignee of the decree dated
13.09.1993. The assignment deed is dated 17.07.1995.
4. The first Respondent-assignee filed E.P. No.150/2004 in
O.S. No.100/1989 seeking to recognize the assignment and
seeking directions to execute the sale deed and deliver
possession.
5. On 13.03.2008, the Executing Court ordered the
execution of the sale deed in favour of the first respondent.
6. When the matter stood thus, on 31.10.2009, the
appellants herein, who were the legal heirs of the deceased-
judgment debtor filed E.A. No.180/2009 under Section 47 of
the Code of Civil Procedure, 1908 (for short ‘CPC’) seeking to
set aside the execution of the sale deed dated 13.03.2008 in
favour of the first respondent. They also prayed for the
dismissal of the Execution Petition primarily on the ground
that the assignment deed in favour of the first respondent was
not registered and, hence, unenforceable in law. By an order
Page 2 of 28
of 08.04.2010, the Executing Court allowed E.A. No.180/2009
and on the aspect of the need for registration of the
assignment, the Court recorded the following finding, after
relying on the judgment of the High Court of Andhra Pradesh
in K. Bhaskaram and another vs. Mohammad Moulana
1
(died) and others :-
“18. …… While perusing the above decision, it can be
noticed that it is not in dispute that there can be oral
transfer of property without writing in every cases in which
writing is not exclusively required under law. But if it is an
immovable property, the value of which is more than
Rs.100/- such transfer deed will have to be reduced in
writing and also it requires compulsory registration. After
analyzing section 17 of the Indian Registration Act … the
Hon’ble High Court categorically held that u/s.17(1)(e) and
(f) of the Registration Act the assignment and transfer of the
decree relating to immovable property of the value of Rs.
100/- and upwards is compulsorily registrable. Further it
was held that the transfer of the right in a decree by way of
assignment in immovable properties require stamp and
registration and if there is a valid assignment of decree by
operation of law, then the assignee is entitled to get the
decree executed in his favour after issuing a notice to the
transferors and the Judgment-Debtors. Further it was held
that the non-compliance with provisio regarding notice
under Order 21 Rule 16 C.P.C. renders all subsequent
proceedings void. The above decision was also rendered
in a case of specific performance relating to immovable
property. Therefore, this court finds that the principles and
1
AIR 2005 AP 524
Page 3 of 28
the decision reported above is squarely applicable to the
facts of the present case also. No other decision or the
principle laid down in any other case has been pointed out
and produced by the respondents so as to reject or over-
look the contentions raised by the petitioners herein or the
decision reported in ‘A.I.R. 2005- Andhra Pradesh- Page
524’. Therefore, this court has no other go except to accept
the principles laid down in the above decision.
19. Since this court comes to the conclusion that the
nd
assignment deed executed by the 2 respondent in favour
st
of the 1 respondent has not been recognised prior to the
execution of the sale deed and that the assignment deed
Ex. Bl is bad for want of registration as per Section 17(1) of
the Registration Act, this court finds that the execution
proceedings initiated by the 1st respondent cannot be
proceeded further.”
7. The first respondent herein filed a Revision Petition
before the High Court which was allowed after holding that
what has been assigned by the decree holder was only a right
to derive benefits from the decree passed by the Court and
nothing more and as such the deed of assignment was not
compulsorily registrable. The High Court relied on the
judgment of High Court of Judicature at Allahabad in Mumtaz
2
Ahmad and Another vs. Sri Ram and others .
2
(1913) 11 A.L.J.R 815
Page 4 of 28
8. We have heard Mr. Jayanth Muth Raj, learned senior
counsel for the appellants and Mr. R. Ganesh, learned counsel
for the assignee-respondent No.1. Respondent No.2, though
served, is not appearing. We have perused the records,
including the original records of the High Court and the Trial
Court, which we called for.
CONTENTIONS OF THE APPELLANTS: -
9. Mr. Jayanth Muth Raj, learned senior counsel, after
drawing our attention to Section 17(1)(e) of the Registration
Act, as amended in 1929, contended that assignment of
decree is compulsorily registrable when the decree purports
or operates to create, declare, assign, limit or extinguish,
whether in present or in future, any right, title or interest,
whether vested or contingent, of the value of one hundred
rupees and upwards, to or in immovable property. According
to the learned senior counsel, the Executing Court rightly
relied upon the judgment of K. Bhaskaram (supra) wherein it
was held that the assignment and transfer of the decree
Page 5 of 28
relating to immovable property of the value of one hundred
rupees and upwards is compulsorily registrable and if it was
unregistered and unstamped then there is no assignment of
the decree in the eye of law.
10. Mr. Jayanth Muth Raj, learned senior counsel, contends
that a decree passed in a suit for specific performance of a sale
agreement on immovable property creates an interest in the
immovable property. Learned senior counsel refers to the
Black’s Law Dictionary for the meaning of the word “interest”
as “ a legal share in something; all or part of a legal or equitable
claim to or right in property ”.
11. Learned senior counsel submits that if the assignment of
the decree of specific performance is not registrable, parties
will get a specific performance decree and instead of
executing a sale deed, they will assign the decree multiple
times for 12 years thereby they can avoid the registration
charges which will defeat the purpose and object of the
provisions of the Registration Act, 1908. No other submission
has been canvassed before us.
Page 6 of 28
CONTENTIONS OF THE RESPONDENT NO.1: -
12. Mr. R. Ganesh, learned counsel for the assignee,
submitted that the decree itself does not create or transfer any
right as regards the suit property but only confers a right to
obtain sale through the process of law. Hence, it is submitted
that the contention of the appellants, that the assignment of
decree warrants registration, is incorrect. Learned counsel
relied on the judgment of the High Court of Judicature at
3
Bombay in Amol and others vs. Deorao and others , wherein
it was held that assignment of a decree for specific
performance does not require registration.
13. Learned counsel contends that upon passing of a decree
for specific performance the contract between the parties is
not extinguished; that the parties to the contract continue to
bear their rights and obligations to complete the contract in
accordance with the terms and conditions of the contract; that
the decree is subject to the further process, upto the stage of
3
2011 SCC OnLine Bom 11
Page 7 of 28
execution of the sale deed and its registration. It is submitted
that the grant of specific performance is an equitable relief
and merely because a decree for specific performance is
passed, it cannot be presumed that a decree-holder is bound
to get the sale deed executed in his favour. It is submitted that
a decree for specific performance does not elevate the status
of a decree-holder to that of an owner since no right, title or
interest in or charge on the immovable property is created in
favour of the decree holder.
DISCUSSION AND ANALYSIS: -
14. We need to first set out the text of the decree for specific
performance obtained by the second respondent which was
the subject matter of the assignment. The decree dated
13.09.1993 reads as under: -
“1. The defendant is to receive the balance sale
consideration and execute the sale of suit schedule property
without any encumbrance in favour of the plaintiff.
2. Failing to do so as aforementioned, the plaintiff can
execute and obtain a sale deed through the court.
3. The defendant should pay the plaintiff the costs Rs.
4,317.50.
Page 8 of 28
4. The plaintiff is given a time of 1 month to execute the sale
deed.”
15. We have also gone through the original records obtained
from the High Court and the translated version of the
assignment deed (Ex.B1) executed by the second respondent
in favour of the first respondent herein. The assignment deed
reads as under:-
“Ex.B.1 - Decree Made Over
Decree Made over for Rs.20,000/-
The Decree Made over Deed, that is entered into, by me,
K.T.Natarajan, S/o.Thirumalaisamy Gounder, residing at
Kanagapuram village, Erode Taluk,
TO AND IN FAVOUR OF
Shanmugam, S/o. Palanisamy Gounder, residing at
Murungakaadu Thottam, Poondurai Semur village, Erode
*
Taluk, on 07.07.1995 (sic.), recites as hereunder:-
As the plaintiff, I obtained a decree in O.S. No. 100 of 1989 on
the file of the I Additional Subordinate Court, Erode, against
the defendant Kuppusamy Gounder, son of Chellappa
Gounder, residing at Ayyagoundanpalayam, Elumathur
Village, Erode Taluk, stating that according to the sale
agreement dated 01.03.1988, the defendant Kuppusamy
Gounder received a balance sale consideration of
Rs.15,000/- from me in respect of the suit property and
agreed to execute a sale deed in favour of me, the plaintiff,
free from encumbrances, and to deliver possession thereof
and in default of such execution, it was ordered that I, the
plaintiff, shall be entitled to have the sale deed executed
*
The assignment deed is undisputedly dated 17.07.1995
Page 9 of 28
through court and the defendant was also directed to pay the
costs of the suit, amounting to Rs.4,817/-. Also, according to
the aforesaid decree, I had deposited the balance sale
consideration of Rs.15,000/- before the Hon’ble Court on
03.09.1991. Since the aforesaid Defendant had not executed
the sale as per the decree, I was constrained to file an
Execution Petition.
In this situation, I am having received from you a total sum of
Rs. 20,000/- (Rupees Twenty Thousand only) in cash, being
the consideration towards the decree and costs awarded to
me in the said suit, had executed the made over, the rights
and interests of aforesaid suit, appeal, and decree, in full and
absolute manner, into your favour, through this. Henceforth,
all rights and interests arising out of the said suit, appeal, and
decree shall belong solely to you. Hence, you shall execute
the sale deed from the court through the Execution Petition in
accordance with the aforesaid decree.
Hereafter, neither I nor my heirs shall have any claim or
succession over the said decree. Thus, it is the Made Over
Deed executed with my full consent. Henceforth, you shall
file the Execution Petition and recover the costs along with
the purchase of the property as per the agreement.”
NATURE AND CHARACTER OF A DECREE FOR SPECIFIC
PERFORMANCE: -
16. As will be seen, what has been the subject matter of the
assignment is a decree for specific performance of an
agreement of sale. It will be trite at this stage to consider what
exactly is the nature and legal character of a decree for
specific performance.
Page 10 of 28
4
17. In Babu Lal vs. M/s Hazari Lal Kishori Lal and others ,
this Court in the context of examining the question, whether in
a suit for specific performance, the relief of possession could
be claimed at a subsequent stage, discussed the nature of the
decree of specific performance in the following terms: -
“6. It would be appropriate to refer to the state of law as it
existed prior to the amendment of the Specific Relief Act in
1963. One view was that the decree-holder does not acquire
title or right to recover possession unless a sale deed is
executed, in execution of the decree for specific
performance. In Hakim Enayat Ullah v. Khalil Ullah Khan [AIR
1938 All 432] a Division Bench of the Allahabad High Court
dealing with the question observed:
“A decree for specific performance only declares the
right of the decree-holder to have a transfer executed
in his favour of the property covered by the decree. The
decree by itself does not transfer title. That this is so is
apparent from the fact that in order to get title to the
property the decree-holder has to proceed in execution
in accordance with the provisions of Order 21 of the
Code. So long as the sale deed is not executed in favour
of the decree-holder, either by the defendant in the suit
or by the court, the title to the property remains vested
in the defendant and till the execution of the sale deed
the decree-holder has no right to the possession of the
property. It is only the execution of the sale deed that
transfers title to the property.”
4
(1982) 1 SCC 525
Page 11 of 28
7. In Kartik Chandra Pal v. Dibakar Bhattacharjee [AIR 1952
Cal 362] a Division Bench of the Calcutta High Court,
however, after reviewing a number of reported cases,
viz., Ranjit Singh v. Kalidasi Debi [ILR (1910) 37 Cal
57] Madanmohan Singh v. Gaja Prasad Singh [(1911) 14 CLJ
159], Deonandan Prasad v. Janki Singh [(1920) 5 Pat LJ 314]
and Atal Behary Acharya v. Barada Prasad Banerji [AIR 1931
Pat 179], observed:
“ ...It is incontestable that in a suit for specific
performance of contract for the sale of land it is open to
the plaintiff to join in the same suit two prayers, one for
the execution of the deed of transfer and another for
recovery of possession of the land in question....
*
We ought to remember in this connection that no
special form of decree in a suit for specific performance
is supplied by the Civil Procedure Code. Chapter II,
Specific Relief Act, deals with the various circumstances
under which a contract may be enforced specifically
and where it cannot be allowed. When a contract is to
be specifically enforced, it means simply this that when
the parties do not agree to perform the contract
mutually the intervention of the Court is required and
the Court will do all such things as the parties would
have been bound to do had this been done without the
intervention of the Court. A sale of a property after
payment of the consideration and upon due execution
of the deed of sale presupposes and requires the
vendor to put the purchaser in possession of the
property. It cannot be suggested that when a party
comes to Court for the specific performance of a
contract he is to be satisfied with simply the execution
of the document on payment of the consideration
money. The Court when allowing the prayer for specific
performance vests the executing court with all the
powers which are required to give full effect to the
decree for specific performance. By the decree for
specific performance, the Court sets out what it finds to
be the real contract between the parties and declares
that such a contract exists and it is for the executing
court to do the rest.
It may be noticed further that a decree in a suit for
Page 12 of 28
specific performance has been considered to be
somewhat in the nature of preliminary decree which
cannot set out in the fullest detail all the different steps
which are required to be taken to implement the main
portion of the order directing specific performance of
the contract. The executing court is in such a case
vested with authority to issue necessary directions.”
*
21. If once we accept the legal position that neither a
contract for sale nor a decree passed on that basis for
specific performance of the contract gives any right or
title to the decree-holder and the right and the 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 he fails to execute the sale deed, it is idle to
contend that a valuable right had accrued to the
petitioner merely because a decree has been passed for
the specific performance of the contract. The limitation
would start against the decree-holders only after they had
obtained a sale in respect of the disputed property. It is,
therefore, difficult to accept that a valuable right had
accrued to the judgment-debtor by lapse of time. Section 22
has been enacted only for the purpose of avoiding
multiplicity of proceedings which the law courts always
abhor.”
(Emphasis supplied)
18. It will be seen from the above judgment 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.
Page 13 of 28
19. Sir Edward Fry in “ A Treatise on the Specific Performance
of Contracts ” (Sixth Edition) graphically captures what
specific performance of a contract is, in the following terms: -
“3. The specific performance of a contract is its actual
execution according to its stipulations and terms; and is
contrasted with damages or compensation for the non-
execution of the contract. Such actual execution is enforced
under the equitable jurisdiction vested in the Courts of this
country by directing the party in default to do the very thing
which he contracted to do, and, in the event of his
disobedience, by treating such disobedience as a contempt
of Court and visiting it with all the consequences of such
contempt, including imprisonment; and in some cases by
doing in one way the thing which the defaulter was directed
to do in another way, as, e.g., by vesting by an order of the
Court an estate which ought to have been vested by
conveyance of the party. To say, as is above said, that the
Courts enforce actual execution according to the stipulations
and terms of the contract is not quite exact: for the Court
rarely, if ever, interferes until the time for performance has
passed and default been made: consequently the
performance enforced by the Court is almost always behind
time as compared with due performance voluntarily
yielded.”
20. The statutory provisions of the Transfer of Property Act,
1882 also make the same clear. The definition of sale and
contract for sale which are relevant are set out hereinbelow: -
“54 . “Sale” defined.— “Sale” is a transfer of ownership in
exchange for a price paid or promised or part-paid and
part-promised.
Sale how made.— Such transfer, in the case of tangible
immoveable property of the value of one hundred rupees
Page 14 of 28
and upwards, or in the case of a reversion or other
intangible thing, can be made only by a registered
instrument.
In the case of tangible immoveable property of a value less
than one hundred rupees, such transfer may be made either
by a registered instrument or by delivery of the property.
Delivery of tangible immoveable property takes place when
the seller places the buyer, or such person as he directs, in
possession of the property.
Contract for sale.— A contract for the sale of immoveable
property is a contract that a sale of such property shall take
place on terms settled between the parties.
It does not, of itself, create any interest in or charge on such
property.”
21. Lucidly explaining the distinction between sale and a
contract for sale, this Court speaking through (R.V.
Raveendran, J.) in Suraj Lamp & Industries (P) Limited (2)
5
through Director vs. State of Haryana and Another , held as
under: -
“Scope of an agreement of sale
16. Section 54 of the TP Act makes it clear that a contract
of sale, that is, an agreement of sale does not, of itself,
create any interest in or charge on such property. This
Court in Narandas Karsondas v. S.A. Kamtam [(1977) 3 SCC
247] observed: (SCC pp. 254-55, paras 32-33 & 37)
“ 32 . A contract of sale does not of itself create any
interest in, or charge on, the property. This is
expressly declared in Section 54 of the Transfer of
5
(2012) 1 SCC 656
Page 15 of 28
Property Act. (See Ram Baran Prasad v. Ram Mohit
Hazra [AIR 1967 SC 744]). The fiduciary character of
the personal obligation created by a contract for sale
is recognised in Section 3 of the Specific Relief Act,
1963, and in Section 91 of the Trusts Act . The personal
obligation created by a contract of sale is described
in Section 40 of the Transfer of Property Act as an
obligation arising out of contract and annexed to
the ownership of property, but not amounting to an
interest or easement therein.
33 . In India, the word ‘transfer’ is defined with
reference to the word ‘convey’. … The word ‘conveys’
in Section 5 of the Transfer of Property Act is used in
the wider sense of conveying ownership.
*
37 . … that only on execution of conveyance, ownership
passes from one party to another….”
17. In Rambhau Namdeo Gajre v. Narayan Bapuji
Dhotra [(2004) 8 SCC 614] this Court held: (SCC p. 619, para
10)
“ 10 . Protection provided under Section 53-A of the Act
to the proposed transferee is a shield only against the
transferor. It disentitles the transferor from disturbing
the possession of the proposed transferee who is put
in possession in pursuance to such an agreement. It
has nothing to do with the ownership of the proposed
transferor who remains full owner of the property till it
is legally conveyed by executing a registered sale
deed in favour of the transferee. Such a right to protect
possession against the proposed vendor cannot be
pressed into service against a third party.”
18. It is thus clear that a transfer of immovable property
by way of sale can only be by a deed of conveyance (sale
deed). In the absence of a deed of conveyance (duly
stamped and registered as required by law), no right, title
or interest in an immovable property can be transferred.
19. Any contract of sale (agreement to sell) which is not a
registered deed of conveyance (deed of sale) would fall short
of the requirements of Sections 54 and 55 of the TP Act and
Page 16 of 28
will not confer any title nor transfer any interest in an
immovable property (except to the limited right granted
under Section 53-A of the TP Act). According to the TP Act,
an agreement of sale, whether with possession or without
possession, is not a conveyance. Section 54 of the TP Act
enacts that sale of immovable property can be made only
by a registered instrument and an agreement of sale does
not create any interest or charge on its subject-matter.”
(Emphasis supplied)
DECREE FOR SPECIFIC PERFORMANCE – DOES NOT
EXTINGUISH THE CONTRACT
22. It will be seen that in case of immovable property of value
of one hundred rupees and upwards, transfer of ownership
will occur only on the execution of a registered instrument.
23. It is also relevant to notice the fundamental principle that
with the passing of a decree of the specific performance, the
contract between the parties is not extinguished. Section 28 of
the Specific Relief Act, 1963, statutorily recognizes this
principle with regard to contracts for the sale or lease of
immovable property, the specific performance of which has
been decreed. Section 28 reads as under: -
“28. Rescission in certain circumstances of contracts for
the sale or lease of immovable property, the specific
performance of which has been decreed.—
Page 17 of 28
(1) Where in any suit a decree for specific performance of a
contract for the sale or lease of immovable property has
been made and the purchaser or lessee does not, within the
period allowed by the decree or such further period as the
court may allow, pay the purchase money or other sum
which the court has ordered him to pay, the vendor or lessor
may apply in the same suit in which the decree is made, to
have the contract rescinded and on such application the
court may, by order, rescind the contract either so far as
regards the party in default or altogether, as the justice of
the case may require.
(2) Where a contract is rescinded under sub-section (1), the
court—
(a) shall direct the purchaser or the lessee, if he has
obtained possession of the property under the
contract, to restore such possession to the vendor or
lessor, and
(b) may direct payment to the vendor or lessor of all the
rents and profits which have accrued in respect of the
property from the date on which possession was so
obtained by the purchaser or lessee until restoration
of possession to the vendor or lessor, and if the justice
of the case so requires, the refund of any sum paid by
the vendee or the lessee as earnest money or deposit
in connection with the contract.
(3) If the purchaser or lessee pays the purchase money or
other sum which he is ordered to pay under the decree
within the period referred to in sub-section (1), the court
may, on application made in the same suit, award the
purchaser or lessee such further relief as he may be entitled
to, including in appropriate cases all or any of the following
reliefs, namely:—
(a) the execution of a proper conveyance or lease by the
vendor or lessor;
(b) the delivery of possession, or partition and separate
possession, of the property on the execution of such
conveyance or lease.
(4) No separate suit in respect of any relief which may be
Page 18 of 28
claimed under this section shall lie at the instance of a
vendor, purchaser, lessor or lessee, as the case may be.
(5) The costs of any proceedings under this section shall be
in the discretion of the court.”
24. In Hungerford Investment Trust Limited (In Voluntary
6
Liquidation) vs. Haridas Mundhra and others , this Court
held as follows: -
“25. …… We have already indicated that the contract
between the parties was not extinguished by the
passing of the decree, that it subsisted notwithstanding
the decree. It was on implied term of the contract and,
therefore, of the decree passed thereon that the parties
would perform the contract within a reasonable time. To
put it in other words, as the contract subsisted despite
the decree and as the decree did not abrogate or modify
any of the express or implied terms of the contract, it
must be presumed that the parties to the decree had the
obligation to complete the contract within a reasonable
time.”
SCOPE OF SECTION 17(1)(e) – REGISTRATION ACT
25. Section 17(1)(e) of the Registration Act, 1908 reads thus:-
“17. Documents of which registration is compulsory.—(1)
The following documents shall be registered, if the property
to which they relate is situate in a district in which, and if they
have been executed on or after the date on which, Act No.
XVI of 1864, or the Indian Registration Act, 1866, or the Indian
Registration Act, 1871, or the Indian Registration Act, 1877, or
this Act came or comes into force, namely:—
*
6
(1972) 3 SCC 684
Page 19 of 28
(e) non-testamentary instruments transferring or assigning
any decree or order of a Court or any award when such
decree or order or award purports or operates to create,
declare, assign, limit or extinguish, whether in present or in
future, any right, title or interest, whether vested or
contingent, of the value of one hundred rupees and upwards,
to or in immovable property.”
26. If we analyze Section 17(1)(e) of the Registration Act on
which the case of the appellant pivots, it will be clear that what
this section prescribes is that registration is mandatory only
for non-testamentary instruments transferring or assigning
any decree or order of a Court or any award when such
decree or order or award purports or operates to create,
declare, assign, limit or extinguish, whether in present or in
future, any right, title or interest, whether vested or
contingent, of the value of one hundred rupees and upwards,
to or in immovable property. In this case, 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.
Page 20 of 28
27. In an erudite judgment which repays study, a learned
Single Judge of the Bombay High Court (R.K. Deshpandey J.)
in Amol (supra) , held as under: -
“27. In the light of the aforesaid judgments of the Apex
Court, it has to be held that the contract between the parties
is not extinguished, upon passing of a decree and it subsists
notwithstanding the decree. Passing of the decree does not
abrogate or modify any of the express or implied terms of
the contract. The parties to the contract continue to bear
their rights and obligations to complete the contract in
accordance with the terms and conditions of the contract. It
does not confer an indefeasible right upon the decree-
holder to get the property straightaway in his own name.
The decree for specific performance of contract is in the
nature of a preliminary decree and the Court passing the
decree continues to retain its control over the entire matter
and the suit is deemed to be pending, even after such a
decree. Such decree is subject to the further process, upto
the stage of execution of the sale-deed and its registration.
The Court continues to monitor the further process and may
either direct the execution of the sale-deed by the vendor
or the execution of the sale-deed through the process of
Court or even to refuse the execution of the sale-deed, if it
is found that the decree-holder is not ready and willing to
abide by his obligations, which are traceable either to the
contract for sale or to the terms of such decree. In a given
case, the Court may also order rescission of the agreement,
to do equity. Thus, the grant of specific performance and its
execution is an equitable relief and he who seeks equity can
be put on the terms to ensure that the equity is done to the
opposite party. Merely because a decree for specific
performance is passed, it cannot be presumed that a
decree-holder is bound to get the sale-deed executed in his
favour.
28. Thus, a decree for specific performance passed on the
basis of an agreement to sale or a contract for sale, merely
recognizes a claim for specific performance of contract,
Page 21 of 28
which is capable of being specifically enforced at the
instance of a decree-holder. It does not elevate the status of
a decree-holder, subsisting prior to passing of such a
decree, to that of the owner of the property in question. It
does not create any right, title, interest in or charge on the
immovable property in favour of a decree-holder. Even in
respect of such a decree, the sale would be complete only
upon the execution of the sale-deed in favour of the decree-
holder either by the vendor/judgment-debtor or through
the process of the Court. It is only upon the registration of
such sale-deed upon payment of stamp duty under Item 20
of Schedule I of the Stamp Act, 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. Hence,
mere passing a decree for specific performance of contract
does not result in the transfer of property.
*
30. Section 17(1)(e) deals with an assignment of a decree of
a Court, when such decree purports or operates to create,
declare, assign, limit or extinguish, whether in present or in
future any right, title or interest, whether vested or
contingent of the value of one hundred rupees and upwards,
to or in immovable property. What is contemplated by this
provision is that the decree passed itself, should purport or
operate to create, declare, assign, limit or extinguish,
whether in present or in future any right, title or interest,
whether vested or contingent of the value of one hundred
rupees and upwards, to or in immovable property. As
pointed out earlier, the decree for specific performance of
contract by itself, does not create right, title or interest in or
charge on the immovable property in favour of a decree-
holder. Hence, the provision of Section 17(1)(e) is not at all
attracted. Though the Executing Court was right in holding
that neither the decree nor the Deed at Exhibit 178 required
registration, it committed an error in holding that the Deed
at Exhibit 114 was required to be registered.”
We record our concurrence to the holding in the said
paragraphs.
Page 22 of 28
28. What is assigned under Exhibit B1, in the present case,
are the rights and interest arising out of the said decree. There
is no dispute that such decrees could be assigned and in fact
there could not have been any. Order 21 Rule 16 of the CPC
permits the assignee of a decree to execute it in the same
manner and subject to the same conditions as if the
applications were made by such decree-holder. There has
been no argument before us about any non-compliance with
the proviso to Order 21 Rule 16. Order 21 Rule 16 reads as
under:-
“ORDER XXI
EXECUTION OF DECREES AND ORDERS
*
Application for Execution
*
16. Application for execution by transferee of
decree.— Where a decree or, if a decree has been passed
jointly in favour of two or more persons, the interest of any
decree-holder in the decree is transferred by assignment
in writing or by operation of law, 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:
Provided that, where the decree, or such interest as
aforesaid, has been transferred by assignment, notice of
Page 23 of 28
such application shall be given to the transferor and the
judgment-debtor, and the decree shall not be executed
until the Court has heard their objections (if any) to its
execution:
Provided also that, where a decree for the payment of
money against two or more persons has been transferred
to one of them, it shall not be executed against the others.”
29. We may also notice here that Section 15 of the Specific
Relief Act also recognizes that representative-in-interest of a
party can obtain specific performance. Relevant portion of
Section 15 of the Specific Relief Act reads as under.
“15. Who may obtain specific performance.— Except as
otherwise provided by this Chapter, the specific
performance of a contract may be obtained by—
(a) any party thereto;
(b) the representative-in-interest or the principal, of any
party thereto:
Provided that where the learning, skill, solvency or any
personal quality of such party is a material ingredient in the
contract, or where the contract provides that his interest
shall not be assigned, his representative in interest or his
principal shall not be entitled to specific performance of the
contract, unless such party has already performed his part
of the contract, or the performance thereof by his
representative in interest, or his principal, has been
accepted by the other party;”
30. Relying on Khardah Company Ltd. vs. Raymon & Co.
7
(India) (P) Ltd. , which elucidated how rights under a contract
7
1962 SCC OnLine SC 28
Page 24 of 28
are assignable subject to certain limitations, this Court, in
8
Kapilaben and others vs. Ashok Kumar Jayantilal Sheth ,
held as under: -
“24. It is well-settled that the term “representative-in-
interest” includes the assignee of a contractual interest.
Though the provisions of the Contract Act do not
particularly deal with the assignability of contracts, this
Court has opined time and again that a party to a contract
cannot assign their obligations/liabilities without the
consent of the other party. A Constitution Bench of this
Court in Khardah Co. Ltd. v. Raymon & Co. (India) (P)
Ltd. [AIR 1962 SC 1810] has laid out this principle as
follows : (AIR p. 1819, para 19)].
“ 19 . … An assignment of a contract might result by
transfer either of the rights or of the obligations
thereunder. But there is a well-recognised distinction
between these two classes of assignments. As a
rule obligations under a contract cannot be assigned
except with the consent of the promisee, and when such
consent is given, it is really a novation resulting in
substitution of liabilities . On the other hand, rights
under a contract are assignable unless the contract is
personal in its nature or the rights are incapable of
assignment either under the law or under an
agreement between the parties .”
31.
We are not able to countenance the submission of Mr.
Jayanth Muth Raj, learned Senior Counsel that a decree
passed in a suit for specific performance of the sale agreement
8
(2020) 20 SCC 648
Page 25 of 28
on immovable property creates an interest in the immovable
property. As held in Suraj Lamp (supra) cited hereinabove,
the personal obligation created by an agreement of sale is
described in Section 40 of the Transfer of Property Act as an
obligation arising out of a contract and annexed to the
ownership of property, but not amounting to an interest or
easement therein.
32. Reliance by the learned senior counsel for the appellants
9
on Satish Kumar and others vs. Surinder Kumar and others ,
is again misplaced. The paragraph cited from that judgment
dealt with Section 17(1)(b) of the Registration Act which again
prescribes for the creation or extinguishment of any right, title
or interest in the immovable property. As held hereinabove,
since no interest is created in the immovable property,
Section 17(1)(b) also would not be applicable. We are also not
able to accept the submission that if multiple assignments are
permitted registration can be avoided. If a party after
9
(1969) 2 SCR 244
Page 26 of 28
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.
33. The holding to the contrary in K. Bhaskaram (supra) on
the aspect of the need for registration of an assignment deed
assigning a decree for specific performance of an agreement
for sale, does not lay down the correct law. In that case, it
appears that parties proceeded on an admission that the
registration was required. Further in that case, the Court
faulted the assignment for breach of Order 21 Rule 16 also.
34. In any event, in view of what has been held hereinabove,
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. We uphold
the judgment of the High Court for the reasons set out
hereinabove.
Page 27 of 28
35. For the reasons stated above, the appeal is dismissed.
No order as to costs.
……….........................J.
[ J.B. PARDIWALA ]
……….........................J.
[ K. V. VISWANATHAN ]
New Delhi;
th
19 November, 2025
Page 28 of 28
IN THE SUPREME COURT OF INDIA
2025 INSC 1329
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.13835 OF 2025
(@ SPECIAL LEAVE PETITION (CIVIL) NO. 3532 of 2018)
Rajeswari & Ors. …Appellant(s)
Versus
Shanmugam & Anr. …Respondent(s)
J U D G M E N T
K.V. Viswanathan, J.
1. Leave granted.
2. Should a deed assigning a decree for specific
performance of an agreement of sale of immovable property,
be registered under the provisions of the Registration Act,
1908, is the question that presents itself for consideration in
this case.
BRIEF FACTS: -
3. The appellants are the legal heirs of the judgment-
Signature Not Verified
Digitally signed by
CHANDRESH
Date: 2025.11.19
13:50:10 IST
Reason:
debtor. Their predecessor suffered an ex-parte decree on
Page 1 of 28
13.09.1993 in O.S. No.100/1989 before the First Additional Sub
Court, Erode, Tamil Nadu. The first Respondent herein-
Shanmugam claims to be the assignee of the decree dated
13.09.1993. The assignment deed is dated 17.07.1995.
4. The first Respondent-assignee filed E.P. No.150/2004 in
O.S. No.100/1989 seeking to recognize the assignment and
seeking directions to execute the sale deed and deliver
possession.
5. On 13.03.2008, the Executing Court ordered the
execution of the sale deed in favour of the first respondent.
6. When the matter stood thus, on 31.10.2009, the
appellants herein, who were the legal heirs of the deceased-
judgment debtor filed E.A. No.180/2009 under Section 47 of
the Code of Civil Procedure, 1908 (for short ‘CPC’) seeking to
set aside the execution of the sale deed dated 13.03.2008 in
favour of the first respondent. They also prayed for the
dismissal of the Execution Petition primarily on the ground
that the assignment deed in favour of the first respondent was
not registered and, hence, unenforceable in law. By an order
Page 2 of 28
of 08.04.2010, the Executing Court allowed E.A. No.180/2009
and on the aspect of the need for registration of the
assignment, the Court recorded the following finding, after
relying on the judgment of the High Court of Andhra Pradesh
in K. Bhaskaram and another vs. Mohammad Moulana
1
(died) and others :-
“18. …… While perusing the above decision, it can be
noticed that it is not in dispute that there can be oral
transfer of property without writing in every cases in which
writing is not exclusively required under law. But if it is an
immovable property, the value of which is more than
Rs.100/- such transfer deed will have to be reduced in
writing and also it requires compulsory registration. After
analyzing section 17 of the Indian Registration Act … the
Hon’ble High Court categorically held that u/s.17(1)(e) and
(f) of the Registration Act the assignment and transfer of the
decree relating to immovable property of the value of Rs.
100/- and upwards is compulsorily registrable. Further it
was held that the transfer of the right in a decree by way of
assignment in immovable properties require stamp and
registration and if there is a valid assignment of decree by
operation of law, then the assignee is entitled to get the
decree executed in his favour after issuing a notice to the
transferors and the Judgment-Debtors. Further it was held
that the non-compliance with provisio regarding notice
under Order 21 Rule 16 C.P.C. renders all subsequent
proceedings void. The above decision was also rendered
in a case of specific performance relating to immovable
property. Therefore, this court finds that the principles and
1
AIR 2005 AP 524
Page 3 of 28
the decision reported above is squarely applicable to the
facts of the present case also. No other decision or the
principle laid down in any other case has been pointed out
and produced by the respondents so as to reject or over-
look the contentions raised by the petitioners herein or the
decision reported in ‘A.I.R. 2005- Andhra Pradesh- Page
524’. Therefore, this court has no other go except to accept
the principles laid down in the above decision.
19. Since this court comes to the conclusion that the
nd
assignment deed executed by the 2 respondent in favour
st
of the 1 respondent has not been recognised prior to the
execution of the sale deed and that the assignment deed
Ex. Bl is bad for want of registration as per Section 17(1) of
the Registration Act, this court finds that the execution
proceedings initiated by the 1st respondent cannot be
proceeded further.”
7. The first respondent herein filed a Revision Petition
before the High Court which was allowed after holding that
what has been assigned by the decree holder was only a right
to derive benefits from the decree passed by the Court and
nothing more and as such the deed of assignment was not
compulsorily registrable. The High Court relied on the
judgment of High Court of Judicature at Allahabad in Mumtaz
2
Ahmad and Another vs. Sri Ram and others .
2
(1913) 11 A.L.J.R 815
Page 4 of 28
8. We have heard Mr. Jayanth Muth Raj, learned senior
counsel for the appellants and Mr. R. Ganesh, learned counsel
for the assignee-respondent No.1. Respondent No.2, though
served, is not appearing. We have perused the records,
including the original records of the High Court and the Trial
Court, which we called for.
CONTENTIONS OF THE APPELLANTS: -
9. Mr. Jayanth Muth Raj, learned senior counsel, after
drawing our attention to Section 17(1)(e) of the Registration
Act, as amended in 1929, contended that assignment of
decree is compulsorily registrable when the decree purports
or operates to create, declare, assign, limit or extinguish,
whether in present or in future, any right, title or interest,
whether vested or contingent, of the value of one hundred
rupees and upwards, to or in immovable property. According
to the learned senior counsel, the Executing Court rightly
relied upon the judgment of K. Bhaskaram (supra) wherein it
was held that the assignment and transfer of the decree
Page 5 of 28
relating to immovable property of the value of one hundred
rupees and upwards is compulsorily registrable and if it was
unregistered and unstamped then there is no assignment of
the decree in the eye of law.
10. Mr. Jayanth Muth Raj, learned senior counsel, contends
that a decree passed in a suit for specific performance of a sale
agreement on immovable property creates an interest in the
immovable property. Learned senior counsel refers to the
Black’s Law Dictionary for the meaning of the word “interest”
as “ a legal share in something; all or part of a legal or equitable
claim to or right in property ”.
11. Learned senior counsel submits that if the assignment of
the decree of specific performance is not registrable, parties
will get a specific performance decree and instead of
executing a sale deed, they will assign the decree multiple
times for 12 years thereby they can avoid the registration
charges which will defeat the purpose and object of the
provisions of the Registration Act, 1908. No other submission
has been canvassed before us.
Page 6 of 28
CONTENTIONS OF THE RESPONDENT NO.1: -
12. Mr. R. Ganesh, learned counsel for the assignee,
submitted that the decree itself does not create or transfer any
right as regards the suit property but only confers a right to
obtain sale through the process of law. Hence, it is submitted
that the contention of the appellants, that the assignment of
decree warrants registration, is incorrect. Learned counsel
relied on the judgment of the High Court of Judicature at
3
Bombay in Amol and others vs. Deorao and others , wherein
it was held that assignment of a decree for specific
performance does not require registration.
13. Learned counsel contends that upon passing of a decree
for specific performance the contract between the parties is
not extinguished; that the parties to the contract continue to
bear their rights and obligations to complete the contract in
accordance with the terms and conditions of the contract; that
the decree is subject to the further process, upto the stage of
3
2011 SCC OnLine Bom 11
Page 7 of 28
execution of the sale deed and its registration. It is submitted
that the grant of specific performance is an equitable relief
and merely because a decree for specific performance is
passed, it cannot be presumed that a decree-holder is bound
to get the sale deed executed in his favour. It is submitted that
a decree for specific performance does not elevate the status
of a decree-holder to that of an owner since no right, title or
interest in or charge on the immovable property is created in
favour of the decree holder.
DISCUSSION AND ANALYSIS: -
14. We need to first set out the text of the decree for specific
performance obtained by the second respondent which was
the subject matter of the assignment. The decree dated
13.09.1993 reads as under: -
“1. The defendant is to receive the balance sale
consideration and execute the sale of suit schedule property
without any encumbrance in favour of the plaintiff.
2. Failing to do so as aforementioned, the plaintiff can
execute and obtain a sale deed through the court.
3. The defendant should pay the plaintiff the costs Rs.
4,317.50.
Page 8 of 28
4. The plaintiff is given a time of 1 month to execute the sale
deed.”
15. We have also gone through the original records obtained
from the High Court and the translated version of the
assignment deed (Ex.B1) executed by the second respondent
in favour of the first respondent herein. The assignment deed
reads as under:-
“Ex.B.1 - Decree Made Over
Decree Made over for Rs.20,000/-
The Decree Made over Deed, that is entered into, by me,
K.T.Natarajan, S/o.Thirumalaisamy Gounder, residing at
Kanagapuram village, Erode Taluk,
TO AND IN FAVOUR OF
Shanmugam, S/o. Palanisamy Gounder, residing at
Murungakaadu Thottam, Poondurai Semur village, Erode
*
Taluk, on 07.07.1995 (sic.), recites as hereunder:-
As the plaintiff, I obtained a decree in O.S. No. 100 of 1989 on
the file of the I Additional Subordinate Court, Erode, against
the defendant Kuppusamy Gounder, son of Chellappa
Gounder, residing at Ayyagoundanpalayam, Elumathur
Village, Erode Taluk, stating that according to the sale
agreement dated 01.03.1988, the defendant Kuppusamy
Gounder received a balance sale consideration of
Rs.15,000/- from me in respect of the suit property and
agreed to execute a sale deed in favour of me, the plaintiff,
free from encumbrances, and to deliver possession thereof
and in default of such execution, it was ordered that I, the
plaintiff, shall be entitled to have the sale deed executed
*
The assignment deed is undisputedly dated 17.07.1995
Page 9 of 28
through court and the defendant was also directed to pay the
costs of the suit, amounting to Rs.4,817/-. Also, according to
the aforesaid decree, I had deposited the balance sale
consideration of Rs.15,000/- before the Hon’ble Court on
03.09.1991. Since the aforesaid Defendant had not executed
the sale as per the decree, I was constrained to file an
Execution Petition.
In this situation, I am having received from you a total sum of
Rs. 20,000/- (Rupees Twenty Thousand only) in cash, being
the consideration towards the decree and costs awarded to
me in the said suit, had executed the made over, the rights
and interests of aforesaid suit, appeal, and decree, in full and
absolute manner, into your favour, through this. Henceforth,
all rights and interests arising out of the said suit, appeal, and
decree shall belong solely to you. Hence, you shall execute
the sale deed from the court through the Execution Petition in
accordance with the aforesaid decree.
Hereafter, neither I nor my heirs shall have any claim or
succession over the said decree. Thus, it is the Made Over
Deed executed with my full consent. Henceforth, you shall
file the Execution Petition and recover the costs along with
the purchase of the property as per the agreement.”
NATURE AND CHARACTER OF A DECREE FOR SPECIFIC
PERFORMANCE: -
16. As will be seen, what has been the subject matter of the
assignment is a decree for specific performance of an
agreement of sale. It will be trite at this stage to consider what
exactly is the nature and legal character of a decree for
specific performance.
Page 10 of 28
4
17. In Babu Lal vs. M/s Hazari Lal Kishori Lal and others ,
this Court in the context of examining the question, whether in
a suit for specific performance, the relief of possession could
be claimed at a subsequent stage, discussed the nature of the
decree of specific performance in the following terms: -
“6. It would be appropriate to refer to the state of law as it
existed prior to the amendment of the Specific Relief Act in
1963. One view was that the decree-holder does not acquire
title or right to recover possession unless a sale deed is
executed, in execution of the decree for specific
performance. In Hakim Enayat Ullah v. Khalil Ullah Khan [AIR
1938 All 432] a Division Bench of the Allahabad High Court
dealing with the question observed:
“A decree for specific performance only declares the
right of the decree-holder to have a transfer executed
in his favour of the property covered by the decree. The
decree by itself does not transfer title. That this is so is
apparent from the fact that in order to get title to the
property the decree-holder has to proceed in execution
in accordance with the provisions of Order 21 of the
Code. So long as the sale deed is not executed in favour
of the decree-holder, either by the defendant in the suit
or by the court, the title to the property remains vested
in the defendant and till the execution of the sale deed
the decree-holder has no right to the possession of the
property. It is only the execution of the sale deed that
transfers title to the property.”
4
(1982) 1 SCC 525
Page 11 of 28
7. In Kartik Chandra Pal v. Dibakar Bhattacharjee [AIR 1952
Cal 362] a Division Bench of the Calcutta High Court,
however, after reviewing a number of reported cases,
viz., Ranjit Singh v. Kalidasi Debi [ILR (1910) 37 Cal
57] Madanmohan Singh v. Gaja Prasad Singh [(1911) 14 CLJ
159], Deonandan Prasad v. Janki Singh [(1920) 5 Pat LJ 314]
and Atal Behary Acharya v. Barada Prasad Banerji [AIR 1931
Pat 179], observed:
“ ...It is incontestable that in a suit for specific
performance of contract for the sale of land it is open to
the plaintiff to join in the same suit two prayers, one for
the execution of the deed of transfer and another for
recovery of possession of the land in question....
*
We ought to remember in this connection that no
special form of decree in a suit for specific performance
is supplied by the Civil Procedure Code. Chapter II,
Specific Relief Act, deals with the various circumstances
under which a contract may be enforced specifically
and where it cannot be allowed. When a contract is to
be specifically enforced, it means simply this that when
the parties do not agree to perform the contract
mutually the intervention of the Court is required and
the Court will do all such things as the parties would
have been bound to do had this been done without the
intervention of the Court. A sale of a property after
payment of the consideration and upon due execution
of the deed of sale presupposes and requires the
vendor to put the purchaser in possession of the
property. It cannot be suggested that when a party
comes to Court for the specific performance of a
contract he is to be satisfied with simply the execution
of the document on payment of the consideration
money. The Court when allowing the prayer for specific
performance vests the executing court with all the
powers which are required to give full effect to the
decree for specific performance. By the decree for
specific performance, the Court sets out what it finds to
be the real contract between the parties and declares
that such a contract exists and it is for the executing
court to do the rest.
It may be noticed further that a decree in a suit for
Page 12 of 28
specific performance has been considered to be
somewhat in the nature of preliminary decree which
cannot set out in the fullest detail all the different steps
which are required to be taken to implement the main
portion of the order directing specific performance of
the contract. The executing court is in such a case
vested with authority to issue necessary directions.”
*
21. If once we accept the legal position that neither a
contract for sale nor a decree passed on that basis for
specific performance of the contract gives any right or
title to the decree-holder and the right and the 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 he fails to execute the sale deed, it is idle to
contend that a valuable right had accrued to the
petitioner merely because a decree has been passed for
the specific performance of the contract. The limitation
would start against the decree-holders only after they had
obtained a sale in respect of the disputed property. It is,
therefore, difficult to accept that a valuable right had
accrued to the judgment-debtor by lapse of time. Section 22
has been enacted only for the purpose of avoiding
multiplicity of proceedings which the law courts always
abhor.”
(Emphasis supplied)
18. It will be seen from the above judgment 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.
Page 13 of 28
19. Sir Edward Fry in “ A Treatise on the Specific Performance
of Contracts ” (Sixth Edition) graphically captures what
specific performance of a contract is, in the following terms: -
“3. The specific performance of a contract is its actual
execution according to its stipulations and terms; and is
contrasted with damages or compensation for the non-
execution of the contract. Such actual execution is enforced
under the equitable jurisdiction vested in the Courts of this
country by directing the party in default to do the very thing
which he contracted to do, and, in the event of his
disobedience, by treating such disobedience as a contempt
of Court and visiting it with all the consequences of such
contempt, including imprisonment; and in some cases by
doing in one way the thing which the defaulter was directed
to do in another way, as, e.g., by vesting by an order of the
Court an estate which ought to have been vested by
conveyance of the party. To say, as is above said, that the
Courts enforce actual execution according to the stipulations
and terms of the contract is not quite exact: for the Court
rarely, if ever, interferes until the time for performance has
passed and default been made: consequently the
performance enforced by the Court is almost always behind
time as compared with due performance voluntarily
yielded.”
20. The statutory provisions of the Transfer of Property Act,
1882 also make the same clear. The definition of sale and
contract for sale which are relevant are set out hereinbelow: -
“54 . “Sale” defined.— “Sale” is a transfer of ownership in
exchange for a price paid or promised or part-paid and
part-promised.
Sale how made.— Such transfer, in the case of tangible
immoveable property of the value of one hundred rupees
Page 14 of 28
and upwards, or in the case of a reversion or other
intangible thing, can be made only by a registered
instrument.
In the case of tangible immoveable property of a value less
than one hundred rupees, such transfer may be made either
by a registered instrument or by delivery of the property.
Delivery of tangible immoveable property takes place when
the seller places the buyer, or such person as he directs, in
possession of the property.
Contract for sale.— A contract for the sale of immoveable
property is a contract that a sale of such property shall take
place on terms settled between the parties.
It does not, of itself, create any interest in or charge on such
property.”
21. Lucidly explaining the distinction between sale and a
contract for sale, this Court speaking through (R.V.
Raveendran, J.) in Suraj Lamp & Industries (P) Limited (2)
5
through Director vs. State of Haryana and Another , held as
under: -
“Scope of an agreement of sale
16. Section 54 of the TP Act makes it clear that a contract
of sale, that is, an agreement of sale does not, of itself,
create any interest in or charge on such property. This
Court in Narandas Karsondas v. S.A. Kamtam [(1977) 3 SCC
247] observed: (SCC pp. 254-55, paras 32-33 & 37)
“ 32 . A contract of sale does not of itself create any
interest in, or charge on, the property. This is
expressly declared in Section 54 of the Transfer of
5
(2012) 1 SCC 656
Page 15 of 28
Property Act. (See Ram Baran Prasad v. Ram Mohit
Hazra [AIR 1967 SC 744]). The fiduciary character of
the personal obligation created by a contract for sale
is recognised in Section 3 of the Specific Relief Act,
1963, and in Section 91 of the Trusts Act . The personal
obligation created by a contract of sale is described
in Section 40 of the Transfer of Property Act as an
obligation arising out of contract and annexed to
the ownership of property, but not amounting to an
interest or easement therein.
33 . In India, the word ‘transfer’ is defined with
reference to the word ‘convey’. … The word ‘conveys’
in Section 5 of the Transfer of Property Act is used in
the wider sense of conveying ownership.
*
37 . … that only on execution of conveyance, ownership
passes from one party to another….”
17. In Rambhau Namdeo Gajre v. Narayan Bapuji
Dhotra [(2004) 8 SCC 614] this Court held: (SCC p. 619, para
10)
“ 10 . Protection provided under Section 53-A of the Act
to the proposed transferee is a shield only against the
transferor. It disentitles the transferor from disturbing
the possession of the proposed transferee who is put
in possession in pursuance to such an agreement. It
has nothing to do with the ownership of the proposed
transferor who remains full owner of the property till it
is legally conveyed by executing a registered sale
deed in favour of the transferee. Such a right to protect
possession against the proposed vendor cannot be
pressed into service against a third party.”
18. It is thus clear that a transfer of immovable property
by way of sale can only be by a deed of conveyance (sale
deed). In the absence of a deed of conveyance (duly
stamped and registered as required by law), no right, title
or interest in an immovable property can be transferred.
19. Any contract of sale (agreement to sell) which is not a
registered deed of conveyance (deed of sale) would fall short
of the requirements of Sections 54 and 55 of the TP Act and
Page 16 of 28
will not confer any title nor transfer any interest in an
immovable property (except to the limited right granted
under Section 53-A of the TP Act). According to the TP Act,
an agreement of sale, whether with possession or without
possession, is not a conveyance. Section 54 of the TP Act
enacts that sale of immovable property can be made only
by a registered instrument and an agreement of sale does
not create any interest or charge on its subject-matter.”
(Emphasis supplied)
DECREE FOR SPECIFIC PERFORMANCE – DOES NOT
EXTINGUISH THE CONTRACT
22. It will be seen that in case of immovable property of value
of one hundred rupees and upwards, transfer of ownership
will occur only on the execution of a registered instrument.
23. It is also relevant to notice the fundamental principle that
with the passing of a decree of the specific performance, the
contract between the parties is not extinguished. Section 28 of
the Specific Relief Act, 1963, statutorily recognizes this
principle with regard to contracts for the sale or lease of
immovable property, the specific performance of which has
been decreed. Section 28 reads as under: -
“28. Rescission in certain circumstances of contracts for
the sale or lease of immovable property, the specific
performance of which has been decreed.—
Page 17 of 28
(1) Where in any suit a decree for specific performance of a
contract for the sale or lease of immovable property has
been made and the purchaser or lessee does not, within the
period allowed by the decree or such further period as the
court may allow, pay the purchase money or other sum
which the court has ordered him to pay, the vendor or lessor
may apply in the same suit in which the decree is made, to
have the contract rescinded and on such application the
court may, by order, rescind the contract either so far as
regards the party in default or altogether, as the justice of
the case may require.
(2) Where a contract is rescinded under sub-section (1), the
court—
(a) shall direct the purchaser or the lessee, if he has
obtained possession of the property under the
contract, to restore such possession to the vendor or
lessor, and
(b) may direct payment to the vendor or lessor of all the
rents and profits which have accrued in respect of the
property from the date on which possession was so
obtained by the purchaser or lessee until restoration
of possession to the vendor or lessor, and if the justice
of the case so requires, the refund of any sum paid by
the vendee or the lessee as earnest money or deposit
in connection with the contract.
(3) If the purchaser or lessee pays the purchase money or
other sum which he is ordered to pay under the decree
within the period referred to in sub-section (1), the court
may, on application made in the same suit, award the
purchaser or lessee such further relief as he may be entitled
to, including in appropriate cases all or any of the following
reliefs, namely:—
(a) the execution of a proper conveyance or lease by the
vendor or lessor;
(b) the delivery of possession, or partition and separate
possession, of the property on the execution of such
conveyance or lease.
(4) No separate suit in respect of any relief which may be
Page 18 of 28
claimed under this section shall lie at the instance of a
vendor, purchaser, lessor or lessee, as the case may be.
(5) The costs of any proceedings under this section shall be
in the discretion of the court.”
24. In Hungerford Investment Trust Limited (In Voluntary
6
Liquidation) vs. Haridas Mundhra and others , this Court
held as follows: -
“25. …… We have already indicated that the contract
between the parties was not extinguished by the
passing of the decree, that it subsisted notwithstanding
the decree. It was on implied term of the contract and,
therefore, of the decree passed thereon that the parties
would perform the contract within a reasonable time. To
put it in other words, as the contract subsisted despite
the decree and as the decree did not abrogate or modify
any of the express or implied terms of the contract, it
must be presumed that the parties to the decree had the
obligation to complete the contract within a reasonable
time.”
SCOPE OF SECTION 17(1)(e) – REGISTRATION ACT
25. Section 17(1)(e) of the Registration Act, 1908 reads thus:-
“17. Documents of which registration is compulsory.—(1)
The following documents shall be registered, if the property
to which they relate is situate in a district in which, and if they
have been executed on or after the date on which, Act No.
XVI of 1864, or the Indian Registration Act, 1866, or the Indian
Registration Act, 1871, or the Indian Registration Act, 1877, or
this Act came or comes into force, namely:—
*
6
(1972) 3 SCC 684
Page 19 of 28
(e) non-testamentary instruments transferring or assigning
any decree or order of a Court or any award when such
decree or order or award purports or operates to create,
declare, assign, limit or extinguish, whether in present or in
future, any right, title or interest, whether vested or
contingent, of the value of one hundred rupees and upwards,
to or in immovable property.”
26. If we analyze Section 17(1)(e) of the Registration Act on
which the case of the appellant pivots, it will be clear that what
this section prescribes is that registration is mandatory only
for non-testamentary instruments transferring or assigning
any decree or order of a Court or any award when such
decree or order or award purports or operates to create,
declare, assign, limit or extinguish, whether in present or in
future, any right, title or interest, whether vested or
contingent, of the value of one hundred rupees and upwards,
to or in immovable property. In this case, 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.
Page 20 of 28
27. In an erudite judgment which repays study, a learned
Single Judge of the Bombay High Court (R.K. Deshpandey J.)
in Amol (supra) , held as under: -
“27. In the light of the aforesaid judgments of the Apex
Court, it has to be held that the contract between the parties
is not extinguished, upon passing of a decree and it subsists
notwithstanding the decree. Passing of the decree does not
abrogate or modify any of the express or implied terms of
the contract. The parties to the contract continue to bear
their rights and obligations to complete the contract in
accordance with the terms and conditions of the contract. It
does not confer an indefeasible right upon the decree-
holder to get the property straightaway in his own name.
The decree for specific performance of contract is in the
nature of a preliminary decree and the Court passing the
decree continues to retain its control over the entire matter
and the suit is deemed to be pending, even after such a
decree. Such decree is subject to the further process, upto
the stage of execution of the sale-deed and its registration.
The Court continues to monitor the further process and may
either direct the execution of the sale-deed by the vendor
or the execution of the sale-deed through the process of
Court or even to refuse the execution of the sale-deed, if it
is found that the decree-holder is not ready and willing to
abide by his obligations, which are traceable either to the
contract for sale or to the terms of such decree. In a given
case, the Court may also order rescission of the agreement,
to do equity. Thus, the grant of specific performance and its
execution is an equitable relief and he who seeks equity can
be put on the terms to ensure that the equity is done to the
opposite party. Merely because a decree for specific
performance is passed, it cannot be presumed that a
decree-holder is bound to get the sale-deed executed in his
favour.
28. Thus, a decree for specific performance passed on the
basis of an agreement to sale or a contract for sale, merely
recognizes a claim for specific performance of contract,
Page 21 of 28
which is capable of being specifically enforced at the
instance of a decree-holder. It does not elevate the status of
a decree-holder, subsisting prior to passing of such a
decree, to that of the owner of the property in question. It
does not create any right, title, interest in or charge on the
immovable property in favour of a decree-holder. Even in
respect of such a decree, the sale would be complete only
upon the execution of the sale-deed in favour of the decree-
holder either by the vendor/judgment-debtor or through
the process of the Court. It is only upon the registration of
such sale-deed upon payment of stamp duty under Item 20
of Schedule I of the Stamp Act, 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. Hence,
mere passing a decree for specific performance of contract
does not result in the transfer of property.
*
30. Section 17(1)(e) deals with an assignment of a decree of
a Court, when such decree purports or operates to create,
declare, assign, limit or extinguish, whether in present or in
future any right, title or interest, whether vested or
contingent of the value of one hundred rupees and upwards,
to or in immovable property. What is contemplated by this
provision is that the decree passed itself, should purport or
operate to create, declare, assign, limit or extinguish,
whether in present or in future any right, title or interest,
whether vested or contingent of the value of one hundred
rupees and upwards, to or in immovable property. As
pointed out earlier, the decree for specific performance of
contract by itself, does not create right, title or interest in or
charge on the immovable property in favour of a decree-
holder. Hence, the provision of Section 17(1)(e) is not at all
attracted. Though the Executing Court was right in holding
that neither the decree nor the Deed at Exhibit 178 required
registration, it committed an error in holding that the Deed
at Exhibit 114 was required to be registered.”
We record our concurrence to the holding in the said
paragraphs.
Page 22 of 28
28. What is assigned under Exhibit B1, in the present case,
are the rights and interest arising out of the said decree. There
is no dispute that such decrees could be assigned and in fact
there could not have been any. Order 21 Rule 16 of the CPC
permits the assignee of a decree to execute it in the same
manner and subject to the same conditions as if the
applications were made by such decree-holder. There has
been no argument before us about any non-compliance with
the proviso to Order 21 Rule 16. Order 21 Rule 16 reads as
under:-
“ORDER XXI
EXECUTION OF DECREES AND ORDERS
*
Application for Execution
*
16. Application for execution by transferee of
decree.— Where a decree or, if a decree has been passed
jointly in favour of two or more persons, the interest of any
decree-holder in the decree is transferred by assignment
in writing or by operation of law, 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:
Provided that, where the decree, or such interest as
aforesaid, has been transferred by assignment, notice of
Page 23 of 28
such application shall be given to the transferor and the
judgment-debtor, and the decree shall not be executed
until the Court has heard their objections (if any) to its
execution:
Provided also that, where a decree for the payment of
money against two or more persons has been transferred
to one of them, it shall not be executed against the others.”
29. We may also notice here that Section 15 of the Specific
Relief Act also recognizes that representative-in-interest of a
party can obtain specific performance. Relevant portion of
Section 15 of the Specific Relief Act reads as under.
“15. Who may obtain specific performance.— Except as
otherwise provided by this Chapter, the specific
performance of a contract may be obtained by—
(a) any party thereto;
(b) the representative-in-interest or the principal, of any
party thereto:
Provided that where the learning, skill, solvency or any
personal quality of such party is a material ingredient in the
contract, or where the contract provides that his interest
shall not be assigned, his representative in interest or his
principal shall not be entitled to specific performance of the
contract, unless such party has already performed his part
of the contract, or the performance thereof by his
representative in interest, or his principal, has been
accepted by the other party;”
30. Relying on Khardah Company Ltd. vs. Raymon & Co.
7
(India) (P) Ltd. , which elucidated how rights under a contract
7
1962 SCC OnLine SC 28
Page 24 of 28
are assignable subject to certain limitations, this Court, in
8
Kapilaben and others vs. Ashok Kumar Jayantilal Sheth ,
held as under: -
“24. It is well-settled that the term “representative-in-
interest” includes the assignee of a contractual interest.
Though the provisions of the Contract Act do not
particularly deal with the assignability of contracts, this
Court has opined time and again that a party to a contract
cannot assign their obligations/liabilities without the
consent of the other party. A Constitution Bench of this
Court in Khardah Co. Ltd. v. Raymon & Co. (India) (P)
Ltd. [AIR 1962 SC 1810] has laid out this principle as
follows : (AIR p. 1819, para 19)].
“ 19 . … An assignment of a contract might result by
transfer either of the rights or of the obligations
thereunder. But there is a well-recognised distinction
between these two classes of assignments. As a
rule obligations under a contract cannot be assigned
except with the consent of the promisee, and when such
consent is given, it is really a novation resulting in
substitution of liabilities . On the other hand, rights
under a contract are assignable unless the contract is
personal in its nature or the rights are incapable of
assignment either under the law or under an
agreement between the parties .”
31.
We are not able to countenance the submission of Mr.
Jayanth Muth Raj, learned Senior Counsel that a decree
passed in a suit for specific performance of the sale agreement
8
(2020) 20 SCC 648
Page 25 of 28
on immovable property creates an interest in the immovable
property. As held in Suraj Lamp (supra) cited hereinabove,
the personal obligation created by an agreement of sale is
described in Section 40 of the Transfer of Property Act as an
obligation arising out of a contract and annexed to the
ownership of property, but not amounting to an interest or
easement therein.
32. Reliance by the learned senior counsel for the appellants
9
on Satish Kumar and others vs. Surinder Kumar and others ,
is again misplaced. The paragraph cited from that judgment
dealt with Section 17(1)(b) of the Registration Act which again
prescribes for the creation or extinguishment of any right, title
or interest in the immovable property. As held hereinabove,
since no interest is created in the immovable property,
Section 17(1)(b) also would not be applicable. We are also not
able to accept the submission that if multiple assignments are
permitted registration can be avoided. If a party after
9
(1969) 2 SCR 244
Page 26 of 28
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.
33. The holding to the contrary in K. Bhaskaram (supra) on
the aspect of the need for registration of an assignment deed
assigning a decree for specific performance of an agreement
for sale, does not lay down the correct law. In that case, it
appears that parties proceeded on an admission that the
registration was required. Further in that case, the Court
faulted the assignment for breach of Order 21 Rule 16 also.
34. In any event, in view of what has been held hereinabove,
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. We uphold
the judgment of the High Court for the reasons set out
hereinabove.
Page 27 of 28
35. For the reasons stated above, the appeal is dismissed.
No order as to costs.
……….........................J.
[ J.B. PARDIWALA ]
……….........................J.
[ K. V. VISWANATHAN ]
New Delhi;
th
19 November, 2025
Page 28 of 28