fritolay_ps

Supreme Court ruled that no immovable property can be legally transferred or conveyed through a general power of attorney, sale agreement or will. So how can we sell under construction flat in re-sale now..???

http://www.indianrealestateforum.com...tml#post255396

deepauls

Fritolay.......please....!

why another thread?

chirag999

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

fritolay_ps

Noida forum has 10 times viewer than “real estate updates” so just posted in this forum to get more reply…!!!

deepauls

oh yes sir, you are right!
This also applies to Noida anyway.

deepauls

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.

deepauls

Here is the answer -
Excerpts from the original judgement (Please see the important points in RED)-


State of Haryana & Anr. ….Respondents

Conclusion

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

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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

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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

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`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

decision.


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

bonafide/genuine transactions.

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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.


.................................J
(R. V. Raveendran)


.................................J
(A. K. Patnaik)



.................................J
(H. L. Gokhale)
New Delhi;
October 11, 2011.

gharondabhai

I think this is a much more useful thread than many. Thanks Fritolaybhai.

Kumarbhai,

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!!

preet sidhu

ok can somebody clear one thing ..
if mr.xyz wanna sell his d.d.a flat on power of attorney because it is on lease hold. what exactly the option he has now..
simple bhasa me btana doston...

humble_guy

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..