14 October 2011

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Supreme Court SA/GPA/WILL transactions not valid Only Registered Sale Deed will be the valid instrument of transaction of property in the country

Supreme Court SA/GPA/WILL transactions not valid Only Registered Sale Deed will be the valid instrument of transaction of property in the country

In each Indian state laws are different but now after SC ruling one has to get the Sale deed of property if he wants to sale his property.

The Supreme Court of India had ruled that, from October 11 registered sale deed will be the only valid instrument of transaction of property in the country.

General Power of Attorney Sales (for short ‘GPA Sales’) or Sale Agreement/General Power of Attorney/Will transfers (for short ‘SA/GPA/WILL’ transfers). Both the
descriptions are misnomers as there cannot be a sale by execution of a power of attorney nor can there be a transfer by execution of an agreement of sale and a power of attorney and will.

This means that sale of properties through general power of attorney
(GPA) and sale agreements (SA) will not be legal and valid.

Supreme Court in its order said 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.

So if you do not have registered sale deed of a property with you, you can not sale your property.

The above judgment is good because it will reduce the black money transactions.

Above ruling will decrease the property rates of lease hold properties.
Purchasers who want to invest undisclosed wealth/income in
immovable properties without any public record of the transactions. The process enables them to hold any number of properties without disclosing them as assets held.

Before this ruling people used to do all transactions without getting sale deed.
Firstly, it enables large scale evasion of income tax, wealth tax,
stamp duty and registration fees thereby denying the benefit of such
revenue to the government and the public. Secondly, such transactions
enable persons with undisclosed wealth/income to invest their black
money and also earn profit/income, thereby encouraging circulation of
Black money and corruption.

Because of above ruling if your apartment or flat is not registered in your name and you are not in a possession of sale deed then you can not sale your flat or property even if you got the general power of attorney (GPA) and sale agreements (SA) registered.

Those holding properties on GPA and SA will have to get a sale deed registered if they wish to sell the property in future.

Thus now it will become necessary to keep the property title clean.

Now it will become difficult to get the bank loans on the properties without sale deeds before this ruling banks gave loans on the properties which got the general power of attorney (GPA) and sale agreements (SA) registered.

Understanding how the black money is created by GPA or SA?

The property of 50 million is given through general power of attorney (GPA) and sale agreements (SA) registered the GPA and SA show the sale price only 25 million

After this state government if finds this transaction, then if the state government decides to charge the fine for under valuation then they will pay the fine only
deficit stamp duty and registration charges are recovered

What about the 25 million which were not paid but in reality the 25 million were paid in cash.
No one sales his property by going into losses. So it’s very clear that 25 million were paid to seller by other means in cash or gold.

Section 5 of the Transfer of Property Act, 1882 (‘TP Act’ for short)
defines ‘transfer of property’ as under:
“5. Transfer of Property defined: In the following sections “transfer of
property” means an act by which a living person conveys property, in
present or in future, to one or more other living persons, or to himself [or
to himself] and one or more other living persons; and "to transfer
property" is to perform such act.”

A power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property. The power of attorney is creation of an agency whereby the grantor authorizes the grantee to do the acts specified therein, on behalf of grantor, which when executed will be binding on the grantor as if done by him (see section 1A and section 2 of the Powers of Attorney Act, 1882). It is revocable or terminable at any time
unless it is made irrevocable in a manner known to law. Even an irrevocable attorney does not have the effect of transferring title to the grantee.

A will is the testament of the testator. It is a posthumous disposition of the estate of the testator directing distribution of his estate upon his death. It is not a transfer inter vivos. The two essential characteristics of a will are that it is intended to come into effect only after the death of the testator and is revocable at any time during the life time of the testator. It is said that so long as the testator is alive, a will is not be worth the paper on which it is written, as the testator can at any time revoke it. If the testator, who is not
married, marries after making the will, by operation of law, the will stands
revoked. (see sections 69 and 70 of Indian Succession Act, 1925).
Registration of a will does not make it any more effective

Reality views by sm –
Friday, October 14, 2011

Tags – Supreme Court Property sale deed GPA SA will lease order


Rakesh Kumar October 14, 2011  

A good informative post,SM.
Thanks for the nice presentation.

Harsh October 15, 2011  

@Rakesh Kumar

Good informative news.
I have query, for under construction building, if Agreement to Sale (SA) is already done and for doing final Sale Deed should I need to wait till I get possession OR I can do now also. Please give your input.


sm,  October 16, 2011  


It will depend on in which state you are staying.

Anonymous,  October 17, 2011  

I brought a property in unauthorized colony in New Delhi. only GPA is working there already paid more then half amount and balance amount i have to paid next month. all property's are sealing by GPA on that area. what should i do please advice me?

SM October 18, 2011  


old GPA allowed before Judgement.

Dont worry govt will make it legal in future.
this is how it works.

Anonymous,  October 23, 2011  

I am purchasing a flat in my name through GPA. I hope this court order stops only sale through GPA and does not stop the purchase. Could you please clarify?

sm,  October 24, 2011  


GPA gives power to do to something it does not make you owner of property.

Sale Deed makes you owner of property.

Anonymous,  October 29, 2011  

I want to purchase a plot sale deed will be signed by gpa Iam in AndhraPradesh state in the light of Supreme court ruling on 11 Oct 2011 regarding gpa whether it will be legally valid the gpa was registered in registration office before 11 oct 2011 my email adderess mohammed wajid hussain 8 @ gmail.com

sm,  October 29, 2011  


thanks.Please ask the advocate with whose help you prepared that doucment.

Old agreements are valid.

Sachin December 15, 2011  

I want to buy a property in unauthorized colony in Burari,Delhi. Property is already in form of GPA. But now i want to buy it. So what do i do for future course of action for this deal.

sm,  December 16, 2011  

Please ask your lawyer, if necessary pay fines and get it legally done.

If property is not legal wait in future as per indian style it will be made legal.
wait and watch and do not invest.

Please Consult your lawyer, the above is just the idea.

SB September 20, 2012  

Hello Sir, Does this GPA is not a Title judgement is valid only for Delhi? or throughout india? for example can I buy a property in Tamilnadu from a GPA holder? The property broker says it is still a practice in Tamilnadu to buy and sell a property through GPA. Thank you in advance for your response.