TaxTMI 
TaxTMI 
2025 (11) TMI 1187
X X X X Extracts X X X X
X X X X Extracts X X X X
....spondent 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 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 Prades....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t 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 Ahmad and Another vs. Sri Ram and others (1913) 11 A.L.J.R 815. 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....itable 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. 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 versi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s 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. 17. In Babu Lal vs. M/s Hazari Lal Kishori Lal and others (1982) 1 SCC 525, 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 [....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 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 performa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....assed 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 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 o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 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 occ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e 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 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 Liquidation) vs. Haridas Mundhra and others (1972) 3 SCC 684, 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....onfer 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 can....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ragraphs. 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 interes....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 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 on Satish Kumar and others vs. Surinder Kumar and others (1969) 2 SCR 244, is a....