Summary
| Category | Data |
|---|---|
| Court | Supreme Court of India |
| Case Number | C.A. No.-013835-013835 – 2025 |
| Diary Number | 344/2018 |
| Judge Name | HON’BLE MR. JUSTICE K.V. VISWANATHAN |
| Bench | HON’BLE MR. JUSTICE J.B. PARDIWALA; HON’BLE MR. JUSTICE K.V. VISWANATHAN |
| Precedent Value | Binding |
| Overrules / Affirms |
|
| Type of Law | Civil procedure; Property law; Registration Act interpretation |
| Questions of Law | Whether a non-testamentary assignment deed transferring a decree for specific performance of immovable property must be registered under Section 17(1)(e) of the Registration Act, 1908 |
| Ratio Decidendi |
The Court held that a decree for specific performance of a contract does not create or confer any proprietary right, title or interest in immovable property until a sale deed is executed and registered. Section 17(1)(e) of the Registration Act mandates registration only where the decree itself purports to create or extinguish such an interest. In the present case the decree merely conferred a right to execute a sale; hence the assignment of that decree did not require registration. K. Bhaskaram (supra) was overruled to the extent it held otherwise. |
| Judgments Relied Upon |
|
| Logic / Jurisprudence / Authorities Relied Upon | Nature of specific performance decree; TP Act Sec. 54–55; Specific Relief Act Sec. 28; CPC Order 21 R 16; Registration Act Sec. 17(1)(e); equitable character of specific performance; distinction between contract and conveyance |
| Facts as Summarised by the Court | Appellant-heirs challenged execution of a 1993 specific performance decree assigned in 1995 for non-registration. Executing Court set aside execution; High Court reversed, holding assignment need not be registered. Supreme Court upheld High Court. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All courts—including Supreme Court, High Courts, and subordinate courts |
| Overrules | K. Bhaskaram & Anr. vs. Mohammad Moulana & Ors. (AIR 2005 AP 524) |
| Distinguishes | Satish Kumar & Ors. vs. Surinder Kumar & Ors. (1969) 2 SCR 244—registration triggered only when decree itself creates interest |
| Follows |
|
What’s New / What Lawyers Should Note
- Clarifies that a decree for specific performance does not, by itself, create a proprietary interest in immovable property.
- Holds that Section 17(1)(e) of the Registration Act applies only if the decree itself “purports or operates” to create, declare, assign, limit or extinguish an interest.
- Overrules Andhra Pradesh High Court decision in K. Bhaskaram—which had required registration of assignment deeds for specific performance decrees.
- Reaffirms that execution of a sale deed and its registration are prerequisites to transfer of title under the Transfer of Property Act.
- Confirms that assignees of specific performance decrees may execute the decree under CPC Order 21 R 16 without registering the assignment.
Summary of Legal Reasoning
-
Nature of Specific-Performance Decree
A decree for specific performance is a preliminary decree that affirms a right to enforce the contract; it does not transfer title or create a proprietary interest until a sale deed is executed and registered. -
Statutory Framework
- TP Act Sec. 54–55: Sale vs. contract for sale; only a registered conveyance transfers ownership.
- Specific Relief Act Sec. 28: Contract subsists post-decree and may be rescinded if purchase money is unpaid.
- CPC Order 21 R 16: Assignees may execute decrees, subject to notice to transferor and judgment-debtor.
- Registration Act Sec. 17(1)(e): Mandatory registration of instruments assigning decrees only when they themselves create or extinguish proprietary rights.
-
Precedents and Distinctions
Relied on Babu Lal (1982), Suraj Lamp (2012), Hungerford (1972) and Amol (2011) to show specific-performance decrees lack proprietary effect. Distinguished Satish Kumar (1969) which dealt with decree purporting to extinguish an interest. -
Overruling Conflicting Authority
K. Bhaskaram (2005 AP) held assignment deeds of specific-performance decrees were registrable; Supreme Court overruled this view as inconsistent with the above principles.
Arguments by the Parties
Petitioners (Appellants)
- Assignment of a decree for specific performance creates an “interest” in immovable property, thus triggering Section 17(1)(e) registration requirement.
- Without compulsory registration, decree assignees could avoid stamp and registration charges by successive assignments.
Respondent No.1 (Assignee)
- A specific-performance decree confers only a right to obtain sale through court process; it does not create title or interest.
- Registration Act applies only where the instrument itself creates or extinguishes a proprietary right.
- Equitable nature of specific performance means title vests only upon execution and registration of sale deed.
Factual Background
In 1993, an ex-parte decree for specific performance of a sale agreement of immovable property was passed against the judgment-debtor. In 1995 the decree was assigned by deed (Ex. B1) for consideration, and an execution petition was filed in 2004. The trial court ordered execution of a sale deed in 2008, but in 2009 the judgment-debtor’s heirs challenged the assignment’s validity for non-registration. The High Court set aside the trial court’s order, and the Supreme Court dismissed the appeal, holding the assignment need not be registered.
Statutory Analysis
-
Registration Act, 1908, Section 17(1)(e)
Compulsory registration of non-testamentary instruments assigning a decree only when the decree “purports or operates to create, declare, assign, limit or extinguish” any right, title or interest in immovable property of value ≥ ₹100. -
Transfer of Property Act, 1882
- Section 54–55: Only a registered instrument effects sale of immovable property; a contract for sale does not create an interest.
- Section 40: Contract for sale creates obligations but not proprietary rights.
-
Specific Relief Act, 1963, Section 28
Recognizes that a contract and its decree for specific performance continue in force until sale deed execution. -
CPC Order 21 Rule 16
Permits execution of a decree by an assignee, subject to notice to transferor and judgment-debtor.
Alert Indicators
- 🚨 Breaking Precedent – Overrules K. Bhaskaram & Anr. vs. Mohammad Moulana & Ors.
- ✔ Precedent Followed – Confirms principles from Babu Lal, Suraj Lamp & Industries, Hungerford Investment, Amol & Ors.