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T.N.REDDY (Propreitor)     25 October 2021

purchase of plot - immovable property

Sir, one of my client is entering in to buy one plot worth of Rs. 80 lakhs from the GPA holder. So, as per the recent SC Judgement, any transactions that are executed by the GPA is not valid, but still in the field/market, people are not very cautious about that judgment and entering in to such an agreements for sale /sale deed through such GPA’s. Kindly advice on that sir.


 1 Replies

Anusha Singh   27 October 2021

As per your query it is understood that you need information about (General Power of Attorney) GPA.

The Bench while passing the landmark Judgment concluded as under:

15. Therefore, a SA/GPA/WILL transaction does not convey any title nor create any interest in an immovable property. The observations by the Delhi High Court, in Asha M. Jain Vs Canara Bank, 94 (2001) DLT 841, that the concept of power of attorney sales have been recognized as a mode of transaction when dealing with transactions by way of SA/GPA/WILL are unwarranted and not justified, unintendedly misleading the general public into thinking that SA/GPA/WILL transactions are some kind of a recognized or accepted mode of transfer and that it can be a valid substitute for a sale deed. Such decisions to the extent they recognize or accept SA/GPA/WILL transactions as concluded transfers, as contrasted from an agreement to transfer, are not good law.

16. We therefore reiterate that immovable property can be legally and lawfully transferred/conveyed only by a registered deed of conveyance.

Transactions of the nature of GPA sales or SA/GPA/WILL transfers do not convey title and do not amount to transfer, nor can they be recognized or valid mode of transfer of immoveable property. The courts will not treat such transactions as completed or concluded transfers or as conveyances as they neither convey title nor create any interest in an immovable property. They cannot be recognized as deeds of title, except to the limited extent of Section 53-A of the Transfer of Property Act, 1882. Such transactions cannot be relied upon or made the basis for mutations in Municipal or Revenue Records.

What is stated above will apply not only to deeds of conveyance in regard to freehold property but also to transfer of leasehold property. A lease can be validly transferred only under a registered Assignment of Lease. It is time that an end is put to the pernicious practice of SA/GPA/WILL transactions known as GPA sales.

17. It has been submitted that making declaration that GPA sales and SA/GPA/WILL transfers are not legally valid modes of transfer is likely to create hardship to a large number of persons who have entered into such transactions and they should be given sufficient time to regularize the transactions by obtaining deeds of conveyance. It is also submitted that this decision should be made applicable prospectively to avoid hardship.

Going into the legality of such transfers, the Supreme Court held that any contract of sale which was not a registered sale deed would fall short of the requirements of the relevant provisions of the Transfer of Property Act and could not confer any title.

The Supreme Court further held that said a transfer of property by way of sale could only be by a 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, the bench said.

Hope it helps!

 

Regards,

Anusha Singh


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