Mr. S. Puthalath (Associate Professor) 15 May 2012

Sale of property by power of attorny which is not registered

I give below my case and request you to advise me on the this.

I have purchased a land from Mr. A and Mr. B through their repsective power of attorneys Mr. X (brother of Mr. A) and Mrs Y(Sister of Mr. B). Mr. A and Mr. B are NRIs and therefore the POAs were executed. Mr. A had signed the POW infront of the cousel at the Indian embassy and the same had been adjudicated (not registered) with the registered (audits) in Kerala. Mr. B had given the POA in India and was registered at the Registrar office here.

Now the issue is that when I submitted the documents for availing a bank loan from a nationalised bank,I was told that the documents are not in order as the POA of A should have been registered before the land was sold to me and therefore the loan was not granted. I am in a difficult position as I dont reallyknow how to make the whole process legal.

The parties A,B,X and Y are very well known to me and are also sad that the whole issued has occurred. They are ready to execute any deeds so that this anomaly is corrected. I have the following queries.

1. The bank has rejected the idea of any confirmation deed executed by Mr. A and Mr. B citing that the whole transaction is binding on them. Is such an option advisable in the long run considering that I may be selling the land in future.

2. In case we need to cancel the earlier deed and make a new sale deed afresh, what are the procudures including stamp duty charges.

3. As the sale has already been reflected in Panchayath and village records, what additional risk does such reversals have.

Please help me out and thanks

Sooraj

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3 Replies

S Jadhav 98336 98330 (Jadhav & Associates) 15 May 2012

Since the sale has already been registered and your name is on the records as the owener of the land now you are considered to be the owner.

You will be able to sell or lease the property or do as you may see fit.

You are only providing a security to the bank to avail of the loan. Each bank has its own rules relating to the documentation but I feel it is wrong on the part of the bank to consider the land ownership defective since the titel records already show your name as the owner.

I think the officers sanctioning your loan are being unreasonable if they are saying that the only reason is the documentation (which was ok since the land has been registered in your name). The sanctioning authority may nto want to give you loan due to some other reasons which you may try to find. You may also approach the senior officers for help or go to another bank or provide some other security.

S Jadhav

Bhavani Sankar Mahanti (Law Officer) 15 May 2012

Dear Puthalath,

As stated by you Mr. A had signed the POA in favor of X infront of the counsel at the Indian embassy and the same had been adjudicated with the registered (audits) in Kerala is a valid transaction. In respect of B share he executed Registered POA in favor of Y then X and Y can act onbehalf of A and B. Here the point is whether POA, are having Sale rights or not. In that POAs having sale rights then X and Y are competent persons to execute Sale deed in favor of any person, such transaction is valid transaction.

There is no need for cancellation of earlier transaction. Please make an enquiry on what reason bank people rejected your case.