arjun (OFFICER) 23 December 2015

Gpa and transfer of private company ownership

A private company has three directors X, Y and Z. "X" as representative of the company has made a GPA with the land owner for apartments development project. However later on without much development in the project, X, Y and Z sold the private company to "P". The GPA for development project was never revoked and no registered deed was executed between "X" and "P". However "P" as new director of the private companny resumed the development project based on an agreement (Rs.100 stamp paper) made with old directors (X, Y and Z). Is "P" legally authorised to sell apartment flats to buyers without consent of "X"?

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2 Replies

Dr J C Vashista (Advocate) 25 December 2015

A good question paper.

How you are concerned?

What is the advise of the lawyer of "X" & "P"?

T. Kalaiselvan, Advocate (Advocate) 03 January 2016

P cannot sell the property in any capacity.There is no proper authorisation to P to sell the property.

Your contents which are reproduced below clearly indicate that there is no registered document in favor of P to even proceed with the development of project.

"The GPA for development project was never revoked and no registered deed was executed between "X" and "P". However "P" as new director of the private company resumed the development project based on an agreement (Rs.100 stamp paper) made with old directors (X, Y and Z)."

It is also not clear that the company was sold to P under proper transaction.

The question of revocation of GPA does not arise when the X is not barred from any activity authorised under the said GPA still existing in his favor.

However you may consult a local lawyer with all relevant documents and seek his/her opinion in person on all such further issues.