Case Laws: Mere decree for Specific Performance does not confer title

1.       Rajan Singh v. Roshan¹

(High Court Of Delhi) | 12-02-2020

This court by citing the precedent held that no rights in immovable property are created, even on passing of decree for specific performance and till in execution thereof a Sale Deed is executed.

 Relevant para is as follows:-

“16. Agreement purchasers do not have any right in the property/land agreed to be purchased. The Court, as far back as in Jiwan Das Vs. Narain Das, (1981) AIR Delhi 291 held that an Agreement to Sell does not create any right in the property to which it pertains and merely gives a right to the agreement purchaser to seek specific performance thereof. It was further held that no rights in immovable property are created, even on passing of decree for specific performance and till in execution thereof a Sale Deed is executed.”

¹ https://www.legitquest.com/case/rajan-singh-v-roshan/1AD5A9

2.       M.a. Keerthi Prasad And Others v. Bharuka Power Corporation Ltd. And Others²

(High Court Of Karnataka) | 22-07-2015

In this case court observed that though appellant got a decree for specific performance but he should have executed the decree for specific performance on or before 23.01.1986. He did not initiate any execution proceedings at all. Therefore whatever right was accrued to him in the decree for specific performance was lost.

 Relevant Para is as follows:-

17.   The understanding of the plaintiff that once a Civil Court declares the sale deed as void, the fifth defendant who lost the property under the sale deed the title reverted back to Smt. Rukminiyamma is erroneous. Fifth defendant was made a party to the suit for specific performance because, on the day the suit was filed, Smt. Rukminiyamma had no right or title vest with the fifth defendant. In pursuance of the decree for specific performance only the fifth defendant along with Smt. Rukminiyamma should have executed the sale deed. Fifth defendant would have lost the right if the sale deed had been executed. No such sale deed is executed, time prescribed in law for enforcement of decree for specific performance has lapsed. Notwithstanding the fact that sale deed in favour of the 5th defendant was declared to be void, fifth defendant continued to be the owner of the suit property. Therefore he has every right to make a gift and he has executed the sale deed in favour of the 3rd defendant. All these alienations are valid. The plaintiffs have no right or interest over the property. Therefore, we do not see any merit in this appeal. Accordingly, the appeal stands dismissed.”

²https://www.legitquest.com/case/ma-keerthi-prasad-and-others-v-bharuka-power-corporation-ltd-and- others/189DC2

3.  Amol & Others v. Deorao & Others³

(In The High Court of Bombay at Nagpur) | 06-01-2011

 In this High court of Bombay stated that 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, 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.

Another relevant para is as follows:-

 “The decision is on clause (vi) of Section 17(2) of the Registration Act, which deals with any decree or order of a Court, which is exempted from registration under clauses (b) and (c) of Section 17(1) of the said Act. It has been held that the exception engrafted therein is meant to cover that decree or order expressed to be made on compromise, which declares the pre- existing right and does not by itself create new right, title or interest in praesenti in immovable property of the value exceeding one hundred rupees. The Executing Court has recorded the finding that Hifzul Kabir was one of the plaintiffs and was having preexisting right in the decree. Assuming this finding to be correct, the exemption under clause (vi) of Section 17(2) of the said Act would apply. Be that as it may, a decree for specific performance of contract, as has already been held, neither extinguishes right, title or interest in the immovable property, nor creates right, title or interest in immovable property and hence it is not compulsorily registrable under clauses (b) and (c) of Section 17(1) of the said Act.”

 ³ https://www.legitquest.com/case/amol–others-v-deorao–others/D51DA

 4.       Kumaran v. Kumaran & Another⁴

(High Court of Kerala) | 30-11-2010

In this case, High court of Kerala by citing the precedents stated that the law, with no doubt, is that a decree for specific performance of an agreement for sale would not, by itself, be effective as a transfer of title and so long as the sale deed is not executed in favour of the successful vendee, either by the vendor himself or by the court, the title continues where it was before the passing of the decree. To the same effect is the decision of the Division Bench of this Court in Chrisentia Chacko v. Choyikutty [1987(1) KLT 60 Case No.83]. A Full Bench of the Allahabad High Court in Mahendra Nath and another v. Smt.Baikunthi Devi and Others [AIR 1976 All. 150] stated that a person who has got only a contract for sale or has got a decree for the specific performance of the contract, has got no interest in the land. He can only enforce the contract compelling the other side to execute the sale deed failing which the Court might execute a sale deed for the defendant, but the rights and liabilities under the contract do not attach to the land. In Hiralal Agarwala v. Bhagirathi Gore and others [1975 Cal.445], it was stated that a decree for specific performance passed on the basis of a contract for sale of immovable property does not create any interest in the property in favour of the decree holder. It only super-adds the sanction of the court to enforce it through the medium of court.

Another Relevant Para is as follows:-

7. Even if the appellants version that he was put in possession by the vendor (the judgment debtor herein) in part performance of that contract for sale, the claim that the appellant may have could be only under S.53A of the Transfer of Property Act as against his vendor. That claim does not contain or recognise any element of title in the vendee, the appellant, who is merely a promisee qua the vendor. Title to that immovable property does not pass even by a direction that is issued by a court in a suit for specific performance requiring a vendor to perform the contract, as already noted. Such a direction, as is contained in Exts.A1 and A2, the judgment and decree, has necessarily to be followed by the transfer of property by a document either on the defendant voluntarily executing it following the direction of the court or by such a document being executed with the intervention of court on the failure of the defendant to abide by the direction of court. The transfer of title occurs only with the execution and registration of the document of transfer of title, wherever registration is required. This is the law.”

⁴ https://www.legitquest.com/case/kumaran-v-kumaran–another/D2023