Sale of Immovable Property : Latest Judgment

Sale of Immovable Property : Latest Judgment

I am referring the latest judgment of Supreme Court on the burning issue of transfer of property by way of General Power of Attorney (GPA) / Sale agreement (SA) or Sale contract/ WILL.

This judgment is passed by Hon’ble Justice R.V. Raveendran , Justice A.K. Patnaik & H.L.Ghokhle, in Special leave Petition of  Suraj Lamp &  Industries Vs. State of Haryana, decided on 11th October 2011.

This Judgment is very useful to learn the basics of transfer of property and create awareness among masses in simple language.

Crux of the finding are  as follows  :

1) Transfer of property  by way of Sale Agreement /  General Power of Attorney/ WILL  does not convey any title nor create any interest in an immovable property.  These document does not convey and lawful title.

2) Immovable property can be legally and lawfully transferred / conveyed only by a registered deed of conveyance.

3) Such records like GPA/Sale Agreements/Will  does not from any basis for Mutation in the municipal records and authorities should take a caution before mutation upon such documents.

4) Transfer of property by way of WILL would  also not give much scope to purchaser until the same is not proved in accordance of settled procedure of law and get a proper endorsement of the court. The registration of Will does not alter the situation as well.

5) Court has made it clear that if any development authority or municipal authority has accepted these document for mutation purpose than same should not be disturbed due to this decision.

6) Court has clarified that bonafide transaction should also not be disturbed.

Relevant  Legal Provisions in respect of  registration of  property document :-

1) Registration Act, 1908 by Amendment Act 48 of 2001 has made the provision that documents containing contract of transfer for consideration (Sale agreement) relating to any immovable property should be registered.

2) Section 32 (3) of Registration Act,, 1908 has specific provision that a POA for sale of immovable property should also be registered with registrar or sub registrar of relevant jurisdiction.

3) Section 54 of the Transfer of Property Act, 1882 defines that any property of more than 100 Rupees value can be transfer by a Registered deed only.

4) Section 53 A of Transfer of Property Act, 1882 speaks about the  part performance of the a written contract where seller has handed over the possession of property to buyer but the deed is not registered then the possession holder can enjoy the limited rights of the property but the this section read with latest amendment of Registration Act under section 17 (i(A))  which says that document containing contracts to transfer for consideration , any immovable property for the purpose of Section 53 A of Transfer of Property Act shall be registered otherwise such document if executed after 2001 shall have no effect for the purpose of part performance secured under section 53 A of TP act.

5) Section 27 of Indian Stamp Act lays down the obligation to pay eligible stamp duty on the conveyance deed. Article 23  of Stamp Act lays down the sale acknowledging delivery of the possession or power of attorney authorize to sell any immovable property are charged with sale duty as leviable on conveyances.

Benefits of Registration :

- Registration of  a document gives notice to the world that such a document has been executed.

- Registration provides safety and security to transactions relating to immovable  property, even if the documents is lost or destroyed.

- It gives the public exposure to a property transaction.

- Gives information to about the property to people dealing with that.

- Makes the property title  search easier.

(Other Cases of reference :  Narandas Karsonda V. S.A. Kamtam And Anr. (1977) 3 SCC 247. Rambaran Prosad V. Ram Mohit Hazar (1967)1 SCR 293. )