POA/Will & Sale Agreement are now out of business… What is alternative ..
how is the ban on general power of attorney related to resale, can somebody explain this...
Also can we still use the POA written for a single property and for a single transaction...i don't know what we call that POA but there are two types of POA...one is general and other one is that i am mentioning here but do not know the exact terminology
General power of attorney has no legal sanctity: SC - Indian Express
General power of attorney has no legal sanctity: SC
The Supreme Court today ruled that sale transactions carried in the name of general power of attorney will have no legal sanctity and immovable property can be sold or transferred only through registered deeds.
A three-judge bench of justices R V Raveendran, A K Patnaik and H L Gokhale also asked the states to reduce stamp duty rates to prevent undervaluation of property and stashing of black money by vested interests.
The apex court said high stamp rates has led to rampant abuse of the general powr of attorney (GPA), sale agreements (SA) and Wills, resulting in huge loss of money to the exchequer.
“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 recognised or valid mode of transfer of immovable 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.
“Such transactions cannot be relied upon or made the basis for mutations in municipal or revenue records,” Justice Raveendran, writing the judgement, said.
The apex court said the amendments to stamp and registration laws by various states do not address the larger issue of generation of black money and operation of land mafia and hence there was a need to reduce the stamp duty though it may result in loss or revenue.
“When high stamp duty is prevalent, there is a tendency to undervalue documents even where sale deeds are executed.
Excerpts from the original judgement (Please see the important points in RED)-
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
SPECIAL LEAVE PETITION (C) NO.13917 OF 2009
Suraj Lamp & Industries Pvt. Ltd. …..Petitioner
State of Haryana & Anr. ….Respondents
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 v. 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 53A of the TP Act. 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.
18. We have merely drawn attention to and reiterated the well-settled
legal position that SA/GPA/WILL transactions are not `transfers' or `sales'
and that such transactions cannot be treated as completed transfers or
conveyances. They can continue to be treated as existing agreement of sale.
Nothing prevents affected parties from getting registered Deeds of
Conveyance to complete their title. The said `SA/GPA/WILL transactions'
may also be used to obtain specific performance or to defend possession
under section 53A of TP Act. If they are entered before this day, they may
be relied upon to apply for regularization of allotments/leases by
Development Authorities. We make it clear that if the documents relating to
`SA/GPA/WILL transactions' has been accepted acted upon by DDA or
other developmental authorities or by the Municipal or revenue authorities to
effect mutation, they need not be disturbed, merely on account of this
19. We make it clear that our observations are not intended to in any way
affect the validity of sale agreements and powers of attorney executed in
genuine transactions. For example, a person may give a power of attorney to
his spouse, son, daughter, brother, sister or a relative to manage his affairs or
to execute a deed of conveyance. A person may enter into a development
agreement with a land developer or builder for developing the land either by
forming plots or by constructing apartment buildings and in that behalf
execute an agreement of sale and grant a Power of Attorney empowering the
developer to execute agreements of sale or conveyances in regard to
individual plots of land or undivided shares in the land relating to apartments
in favour of prospective purchasers. In several States, the execution of such
development agreements and powers of attorney are already regulated by
law and subjected to specific stamp duty. Our observations regarding
`SA/GPA/WILL transactions' are not intended to apply to such
20. We place on record our appreciation for the assistance rendered by
Mr. Gopal Subramaniun, Senior Counsel, initially as Solicitor General and
later as Amicus Curiae.
21. As the issue relating to validity of SA/GPA/WILL has been dealt with
by this order, what remains is the consideration of the special leave petition
on its merits. List the special leave petition for final disposal.
(R. V. Raveendran)
(A. K. Patnaik)
(H. L. Gokhale)
October 11, 2011.
I think this is a much more useful thread than many. Thanks Fritolaybhai.
We need your expertise to explain this in "insaan ki bhasha" .. what does it mean?, is there something to worry about? and finally what are the options?.
Thanks in advance ... don't send me an invoice!!
this is confusing...
so what happens when parents leave their property to their children in their will?
is the Will invalid? how will parents transfer property to their next generation?
Learned members please share your views..
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