New Delhi (ABC LIVE): Rajeswari v Shanmugam: The Supreme Court’s decision in Rajeswari v. Shanmugam Judgment may look like a routine judgment on decree assignment. Instead, it inadvertently opened a billion-rupee escape tunnel that allows investors to trade enforceable property rights without stamp duty, without registration, and without government oversight.

The Court declared that the assignment of a decree for specific performance does not require registration, because a decree does not create or transfer any interest in land. As a result, anyone can now buy and sell the right to enforce a property sale, without ever paying the taxes that protect the public revenue.

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This ruling transforms decrees into market commodities, not merely tools of justice. It creates a property-rights ecosystem where ownership waits, but profits do not.

What the Rajeswari v Shanmugam Judgment Said — and What It Really Did

The Court Held:

• No registration is required for decree assignment.

• A decree does not convey title, even if money or possession is involved.

• Ownership comes only through a registered sale deed, not through litigation.

• The assignee can enforce a decree under Order 21 Rule 16 CPC.

The Real-World Effect:

• Decree rights become tradable tax-free assets.

• Investors gain control over land without paying stamp duty.

• The sale deed becomes a delayed ritual, executed only when profitable.

👉 Enforcement becomes profit. Ownership becomes paperwork.

What Exactly Is a Decree Assignment?

A decree assignment transfers the right to enforce a court decree from one person to another. It gives:

• the power to force a sale,

• the right to execute the decree,

• the ability to litigate enforcement,

• and the leverage to demand payment or property.

However, it does NOT transfer ownership. Ownership comes only when a registered sale deed is finally executed.

Why This Kills Stamp Duty Enforcement

Decree rights:

• do not require registration

• do not attract stamp duty

• can be bought and resold repeatedly

• do not trigger AML, Benami, or valuation checks

👉 Rights now flow like money, without paying like property.

How to Detect Decree Trading Scams

📌 If the assignee won’t prove they can buy, they’re not enforcing rights — they’re trafficking them.

How States Can Still Stop the Tax Leak

Even though the Court created a loophole, the States still control stamp duty. They can:

• Treat decree assignments as actionable claim transfers, taxable under stamp laws.

• Notify valuation-based stamp duty for assignments involving land rights.

• Create mandatory disclosure filings without requiring registration.

• Demand source of funds affidavits for decree purchases above ₹10 crore.

👉 The Court opened the floodgate.
State governments still hold the dam controls.

Who Wins Now? (Builders, Banks & Launderers)

A. Builders Will Use Decrees as Secret Land Grab Tools

Developers can now:

• Acquire enforceable rights through decrees instead of buying land.

• Delay actual registration to postpone stamp duty indefinitely.

• Use decrees as bargaining weapons against weak landowners.

• Hide ownership trails through shell-company assignments.

👉 Decree = hidden property acquisition without paying for the property.

B. Banks & Insolvency Firms Will Monetize Decree Rights

Under IBC and SARFAESI, distressed assets can now be:

• sold as decree rights, not property,

• packaged into investment bundles,

• passed between ARCs without stamp duty,

• enforced only when profitable, not when justice demands.

📌 Recovery turns into revenue loss. Enforcement becomes finance.

C. Black Money Can Be Laundered Using Decree Assignments

The new laundering cycle:

👉 The decree becomes a clean legal laundromat for dirty money.

The Three Culprits Behind This Loophole

One branch legalized it, one market weaponized it, and one government watched revenue vanish.

 Final Forensic Formula

A decree is not a conveyance.
It is a legal weapon traded like a financial asset.
It grants control without ownership.
And now, it can be bought and sold without tax.

📌 The Court gave purity to a tool that the market will use for anything but justice.

Verified Sources

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This report on Rajeswari v Shanmugam relies on authentic judicial documents as primary sources, and uses secondary sources only for interpretation and investigation, not as evidence.

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