The Supreme Court (SC) has ruled that the assignment of a decree for specific performance does not require registration under the Indian Registration Act, 1908, since such a decree does not create or transfer any right or interest in immovable property. Delivering judgment in Rajeswari & Ors vs Shanmugam & Anr (2025 INSC 1329), a bench of justice JB Pardiwala and justice KV Viswanathan upheld a Madras High Court (HC) decision permitting execution of a decree based on an unregistered assignment deed executed in 1995.
In an order on 19 November 2025, the bench says, "...the assignment deed 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 judgement of the executing court was clearly right. We uphold the judgement of the high court..."
The dispute stemmed from a 1993 ex parte decree for specific performance passed by a subordinate court in Erode, Tamil Nadu. The original decree-holder assigned his rights through an instrument dated 17 July 1995 in favour of the respondent, Shanmugam, who later moved the court seeking execution of the decree. Although the executing court initially ordered a sale deed to be executed in his favour, the legal heirs of the judgement-debtor objected under Section 47 of the Code of Civil Procedure (CPC), arguing that the assignment was unenforceable because it was unregistered. Relying on the Andhra Pradesh HC decision in K Bhaskaram vs Mohammad Moulana, the executing court accepted the objection and halted execution proceedings.
The HC reversed this order, holding that what was assigned was only the right to derive the benefits of the decree, not any interest in immovable property. The heirs of the judgement-debtor challenged this before the SC.
The apex court examined the nature of a decree for specific performance and reaffirmed the settled principle that neither an agreement for sale nor a decree passed in a suit for specific performance transfers ownership. Title to immovable property passes only upon execution and registration of a sale deed, whether executed by the judgement-debtor or through the court.
The court referred extensively to earlier precedents including Babu Lal vs Hazari Lal Kishori Lal and Suraj Lamp & Industries vs State of Haryana, reiterating that such decrees do not create proprietary rights.
"Since a decree for specific performance does not, by itself, create, declare, assign, limit or extinguish any right or interest in immovable property, the Court held that it does not fall within Section 17(1)(e) of the Registration Act, which mandates registration only when the decree itself operates to create or extinguish such rights. Consequently, an instrument assigning such a decree does not require compulsory registration," the SC says.
The bench agreed with the Bombay HC’s reasoning in Amol vs Deorao and expressly overruled the contrary Andhra Pradesh HC view in the K Bhaskaram case.
The SC further observed that Order 21 Rule 16 of the CPC expressly permits an assignee of a decree to seek its execution, subject to notice and opportunity for objections. Arguments advanced by the appellants regarding potential loss of revenue to the State through repeated unregistered assignments were rejected, with the court noting that no interest in immovable property can arise until a registered sale deed is executed and proper stamp duty is paid.
Finding the executing court’s approach 'clearly wrong' and the HC’s reasoning correct, the Supreme Court dismissed the appeal and affirmed that the 1995 assignment deed was valid, despite being unregistered.
The ruling settles a long-standing legal ambiguity and clarifies that assignment of the right to enforce a decree for specific performance does not attract compulsory registration.
