Power of attorney ruling
SUKHVIR HOUSING AGENCY
(Querist) 26 November 2011
This query is : Resolved
Dear All,
I heard last month Supreme Court gave a judgement( in Times of India paper published in 10/2011) that no property sale transaction can happen on Power of Attorney holder basis, Sellers have to present personally for Registration of Sale Transaction.
kindly make me educate what is the judgement and when it was published because one of my friend is staying out of Maharashtra and he gave power of attorney to me in 2006 to sell a property in Mumbai, kindly suggest can i enter in to a sale transaction and do registration, or my friend has to visit personally.
ajay sethi
(Expert) 26 November 2011
your frind has to visit persoanlly to sell the property .
in alternative your friend can give power of attorney to any of his family members to sell the property . the power of attorney must be duly stamped and registered .
ajay sethi
(Expert) 26 November 2011
a) There cannot be a transfer of title in an immovable property by execution of a sale agreement/general power of attorney. Any presumption of transfer of title by execution of a sale agreement/general power of attorney is not legally valid.
b) The execution of sale agreement/general power of attorney is not transfer or sale and that such transaction cannot be treated as completed transfer or conveyance.
c) The development authorities, municipal authorities, revenue authorities are not to henceforth effect mutation of revenue records based on the sale agreement/general power of attorney
d) A person can enter into a development agreement, agreement of sale, power of attorney empowering the developer to execute the sale in favour of the prospective purchasers and such transactions would be valid.
e) The observations made by the Supreme Court in the said judgment regarding the sale agreement/general power of attorney shall not apply to bonafide and genuine transaction
His Lordship Hon’ble Mr.Justice V.Ramasubramanian had recently in open court said that we should not only know the law but also understand the law. Thus a proper reading, understanding and appreciation of the said judgment would not create chaos and the issue would be put to rest.
Raj Kumar Makkad
(Expert) 26 November 2011
The judgment you heard was pronounced on 08 Oct 2011 vide which GPA is not a valid document to effect sale now and in your case GPA executed in your favour by your friend is now useless so far as sale of property is concerned. Your friend shall have to come for that purpose.
Sailesh Kumar Shah
(Expert) 27 November 2011
I humnly differ.
In my opinion, you can enter in to a sale transaction and do registration subject to "registered" power of attroney.
Raj Kumar Makkad
(Expert) 27 November 2011
Shah! Now you require reading of mentioned judgement.
R.Ramachandran
(Expert) 27 November 2011
Dear Mr. Sukhvir,
The background for the decision of the Supreme Courtis as under:
1. In the State of Delhi, Haryana and Punjab, generally the people sold their immovable property - but did not get it registered in the name of the buyer to save the stamp duty and registration charges involved. Normally the seller only executed the GPA / Special Power of Attorney / WILL in favour of the buyer and the buyer kept with him the GPA / WILL as proof of purchase.
2. As you know, the GPA/SPA is only an authority to deal with the immovable property. The GPA/SPA itself is not a conveyance deed. In other words, while GPA/SPA authorises the holder of the GPA/SPA to effect the sale of the property on behalf of the original owner, the holder of the GPA/SPA cannot be the owner of the property. In other words, just by granting the GPA/SPA the owner cannot transfer the immovable property in favour of the buyer. Consequently, the buyer cannot get a proper title of the immovable property on the basis of the GPA/SPA, unless the transfer is registered in favour of the buyer by payment of applicable stamp duty and registration fee.
3. In its latest decision, the Supreme Court has only reiterated the said legal position. Supreme Court has not given any new decision rather it has clearly indicated the correct legal position in regard to the GPA / SPA. In view of this, the decision of the Supreme Court is neither 'prospective' or 'retrospective', but only emphasising the existing legal position.
4. When it was pointed out to the Supreme Court that since many persons have purchased the property on the basis of GPA/SPA and have not got registered in their favour by payment of stamp duty / registration duty, the Supreme Court has said that "unless the property is registered by execution of Sale DEED/Conveyance DEED" the buyer cannot get proper title in his favour.
5. It is quite possible that in some cases along with the GPA/SPA, the possession of the property might have been given to the holder SA/GPA, in those cases, the SA/GPA holder can obtain 'specific performance' of the transaction based on such 'SA/GPA' to get their title complete.
6. In case no possession of the property has been given, but a person is only holding a GPA/SPA, then that person can get the 'CONVEYANCE DEED' executed and Registered to get their title complete.
7. Supreme Court has also held that in case, before the said decision, the Authorities like Delhi Development Authority / Municipal Corporation etc., have already put the name of the buyer in the records against the property on the basis of the GPA/SPA, then the same need not be disturbed.
8. Wherever such name change in the official records had not taken place so far, then hereafter such name change in the records can be done only if the Sale Deed / Conveyance Deed is properly executed and registered with the Sub-Registrar's office by payment of stamp duty and registration fee.
9. The title in the case of those persons mentioned at situation (7) above is complete and they need not do anything further.
10. Those mentioned in situation (5), (6) and (8) above have to take action as stated in the said paragraphs. If they fail to do, their title WILL NOT BE complete.
I hope this gives you a correct picture of the whole issue.
DEFENSE ADVOCATE.-firmaction@g
(Expert) 27 November 2011
There are number of articles in articles section of this site where experts have done lot of hard work to take into account effect of all other provisions and ultimate effects of this SC judgement.
Raj Kumar Makkad
(Expert) 28 November 2011
Nothing remains to be added now in the detailed reply of Ramachandran.
