Refer judgment delivered in Oct, 2011 by Supreme Court of India, whereby sale transactions on the basis of Power of Attorney is prohibited.
“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.
The apex court said the Delhi High Court was wrong in upholding the validity of GPA sales in the Asha Jain case(2001).
“Such decisions to the extent they recognise or accept SA/GPA/WILL transactions as concluded transfers, as contrasted from an agreement to transfer, are not good law.
“We, therefore, reiterate that immovable property can be legally and lawfully transferred/conveyed only by a registered deed of conveyance, Justice Raveendran said.
The apex court, however, clarified the sale and other transactions entered through GPAs and Wills till date (at the time of delivering judgment) will not be affected by its today’s orders and will be treated as valid agreements.
“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,” the bench said.
