Assignment of Specific Performance Decree Does Not Create Rights in Immovable Property; Registration Not Mandatory: SC

The appellants, legal heirs of the original judgment debtor, challenged the execution of a decree for specific performance relating to an agreement of sale. The decree holder assigned the decree in 1995 to Respondent No. 1 for consideration. The assignee later initiated execution and obtained a sale deed through the executing court. The appellants filed objections under Section 47 CPC, asserting that the unregistered assignment deed was invalid. The executing court accepted this argument and stopped execution.

HC’s Ruling: On revision, the High Court reversed this view, holding that the assignment of a decree for specific performance need not be registered. The matter reached the Supreme Court.

Issue Raised: Whether an assignment of a decree for specific performance of an agreement of sale of immovable property requires compulsory registration under Section 17(1)(e) of the Registration Act, 1908.

SC’s Ruling: The Supreme Court held that a decree for specific performance does not itself create, assign, declare, limit, or extinguish any right or interest in immovable property. Such rights arise only after execution and registration of the actual sale deed. Since the decree does not transfer ownership, an instrument assigning such a decree is not covered by Section 17(1)(e) of the Registration Act and therefore does not require registration.

The Court relied on Amol v. Deorao and clarified that the contrary view in K. Bhaskaram does not lay down the correct law. It reaffirmed that the contract for sale survives even after a decree; the decree holder does not become the owner, and rights under such decrees are assignable under Order 21 Rule 16 CPC without registration.

The appeal was dismissed.

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