<div class="xblock xblock-public_view xblock-public_view-vertical" data-course-id="course-v1:EBC-Learning+law-contract+2025" data-init="VerticalStudentView" data-runtime-class="LmsRuntime" data-runtime-version="1" data-block-type="vertical" data-usage-id="block-v1:EBC-Learning+law-contract+2025+type@vertical+block@4158c40f39f144029b2057a9fc84a200" data-request-token="fc64ba445d1311f1995f0242ac120009" data-graded="False" data-has-score="False"> <div class="vert-mod"> <div class="vert vert-0" data-id="block-v1:EBC-Learning+law-contract+2025+type@html+block@c05c333cd32349aab90b71ac5ccc93d2"> <div class="xblock xblock-public_view xblock-public_view-html xmodule_display xmodule_HtmlBlock" data-course-id="course-v1:EBC-Learning+law-contract+2025" data-init="XBlockToXModuleShim" data-runtime-class="LmsRuntime" data-runtime-version="1" data-block-type="html" data-usage-id="block-v1:EBC-Learning+law-contract+2025+type@html+block@c05c333cd32349aab90b71ac5ccc93d2" data-request-token="fc64ba445d1311f1995f0242ac120009" data-graded="False" data-has-score="False"> <script type="json/xblock-args" class="xblock-json-init-args"> {"xmodule-type": "HTMLModule"} </script> <link rel="stylesheet" href="https://ebc-assets.s3.ap-south-1.amazonaws.com/css/course-default-styles.css"> <div class="banner-image" id="banner-element"> What Kind of Instrument? Sale Deed </div> <script> var bannerElement = document.getElementById("banner-element"); var imageUrl = "https://ebclearning.com/asset-v1:EBC-Learning+law-contract+2025+type@asset+block@home.webp"; bannerElement.setAttribute("data-image-url", ""); bannerElement.style.setProperty("--image-url", `url(${imageUrl})`); </script> <div class="body-text-large"> <body class="c2 doc-content"><h2 class="c8" id="h.u67l14ngnkn4">What Kind of Instrument can Affect Transfer of Immovable Property? </h2>In the landmark case of Suraj Lamp & Industries (P) Ltd. v. State of Haryana <a href="#ftnt1" id="ftnt_ref1">[1]</a> (‘Suraj Lamp Case’), the Supreme Court unequivocally held that SA/GPA/WILL transactions (Agreement to sell, General Power of Attorney, and Will) do not amount to legal transfers of immovable property. It was clarified that ownership or title can only be transferred through a registered deed of conveyance, as mandated under Sections 54 and 55 of the Transfer of Property Act, 1882 and Section 17 of the Registration Act, 1908. The Court in the said case had referred to the ill-effects of what is known as 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.<a href="#ftnt2" id="ftnt_ref2">[2]</a> The case law held that, “The modus operandi in such SA/GPA/WILL transactions is for the vendor or person claiming to be the owner to receive the agreed consideration, deliver possession of the property to the purchaser and execute the following documents or variations thereof: (a) An Agreement of sale by the vendor in favour of the purchaser confirming the terms of sale, delivery of possession and payment of full consideration and undertaking to execute any document as and when required in future. Or An agreement of sale agreeing to sell the property, with a separate affidavit confirming receipt of full price and delivery of possession and undertaking to execute sale deed whenever required. (b) An Irrevocable General Power of Attorney by the vendor in favour of the purchaser or his nominee authorising him to manage, deal with and dispose of the property without reference to the vendor. Or A General Power of Attorney by the vendor in favour of the purchaser or his nominee authorising the attorney holder to sell or transfer the property and a Special Power of Attorney to manage the property. (c) A will bequeathing the property to the purchaser (as a safeguard against the consequences of death of the vendor before transfer is effected). These transactions are not to be confused or equated with genuine transactions where the owner of a property grants a power of Attorney in favour of a family member or friend to manage or sell his property, as he is not able to manage the property or execute the sale, personally. These are transactions, where a purchaser pays the full price, but instead of getting a deed of conveyance gets a SA/GPA/WILL as a mode of transfer, either at the instance of the vendor or at his own instance.” Further, the ill effects of of SA/GPA/WILL transactions was explained in the following words in the same case, “Recourse to ‘SA/GPA/WILL’ transactions is taken in regard to freehold properties, even when there is no bar or prohibition regarding transfer or conveyance of such property, by the following categories of persons: (a) Vendors with imperfect title who cannot or do not want to execute registered deeds of conveyance. (b) 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. (c) Purchasers who want to avoid the payment of stamp duty and registration charges either deliberately or on wrong advice. Persons who deal in real estate resort to these methods to avoid multiple stamp duties/registration fees so as to increase their profit margin. Whatever be the intention, the consequences are disturbing and far reaching, adversely affecting the economy, civil society and law and order. 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. This kind of transaction has disastrous collateral effects also. For example, when the market value increases, many vendors (who affected power of attorney sales without registration) are tempted to resell the property taking advantage of the fact that there is no registered instrument or record in any public office thereby cheating the purchaser. When the purchaser under such ‘power of attorney sales’ comes to know about the vendor’s action, he invariably tries to take the help of musclemen to ‘sort out’ the issue and protect his rights. On the other hand, real estate mafia may at times purchase properties which are already subject to power of attorney sale and then threaten the previous ‘Power of Attorney Sale’ purchasers from asserting their rights. Either way, such power of attorney sales indirectly lead to growth of real estate mafia and criminalisation of real estate transactions”. The case further goes on to explain the scope of Agreement to Sell in the following words, “Section 54 of TP Act makes it clear that a contract of sale, that is, an agreement of sale does not, of itself, create any interest in or charge on such property. This Court in Narandas Karsondas v. S.A. Kamtam<a href="#ftnt3" id="ftnt_ref3">[3]</a>, observed: A contract of sale does not of itself create any interest in, or charge on, the property. This is expressly declared in Section 54 of the Transfer of Property Act.<a href="#ftnt4" id="ftnt_ref4">[4]</a> The fiduciary character of the personal obligation created by a contract for sale is recognised in Section 3 of the Specific Relief Act, 1963, and in Section 91 of the Trusts Act. The personal obligation created by a contract of sale is described in Section 40 of the Transfer of Property Act as an obligation arising out of contract and annexed to the ownership of property, but not amounting to an interest or easement therein.” In India, the word ‘transfer’ is defined with reference to the word ‘convey’. The word ‘conveys’ in Section 5 of Transfer of Property Act is used in the wider sense of conveying ownership…that only on execution of conveyance ownership passes from one party to another…In Rambhau Namdeo Gajre v. Narayan Bapuji Dhotra<a href="#ftnt5" id="ftnt_ref5">[5]</a> this Court held: “Protection provided under Section 53A of the Act to the proposed transferee is a shield only against the transferor. It disentitles the transferor from disturbing the possession of the proposed transferee who is put in possession in pursuance to such an agreement. It has nothing to do with the ownership of the proposed transferor who remains full owner of the property till it is legally conveyed by executing a registered sale deed in favour of the transferee. Such a right to protect possession against the proposed vendor cannot be pressed in service against a third party. It is thus clear that a transfer of immoveable property by way of sale can only be by a deed of conveyance (sale deed). In the absence of a deed of conveyance (duly stamped and registered as required by law), no right, title or interest in an immoveable property can be transferred. Any contract of sale (agreement to sell) which is not a registered deed of conveyance (deed of sale) would fall short of the requirements of Sections 54 and 55 of TP Act and will not confer any title nor transfer any interest in an immovable property (except to the limited right granted under Section 53A of TP Act). According to the TP Act, an agreement of sale, whether with possession or without possession, is not a conveyance. Section 54 of TP Act enacts that sale of immoveable property can be made only by a registered instrument and an agreement of sale does not create any interest or charge on its subject matter.” The case further goes on to explain the scope of a power of attorney in the following words: “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 authorises 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. In the State of Rajasthan v. Basant Nehata<a href="#ftnt6" id="ftnt_ref6">[6]</a>, this Court held: ‘A grant of power of attorney is essentially governed by Chapter X of the Contract Act. By reason of a deed of power of attorney, an agent is formally appointed to act for the principal in one transaction or a series of transactions or to manage the affairs of the principal generally conferring necessary authority upon another person. A deed of power of attorney is executed by the principal in favour of the agent. The agent derives a right to use his name and all acts, deeds and things done by him and subject to the limitations contained in the said deed, the same shall be read as if done by the donor. A power of attorney is, as is well known, a document of convenience. Execution of a power of attorney in terms of the provisions of the Contract Act as also the Powers-of-Attorney Act is valid. A power of attorney, we have noticed hereinbefore, is executed by the donor so as to enable the donee to act on his behalf. Except in cases where power of attorney is coupled with interest, it is revocable. The donee in exercise of his power under such power of attorney only acts in place of the donor subject of course to the powers granted to him by reason thereof. He cannot use the power of attorney for his own benefit. He acts in a fiduciary capacity. Any act of infidelity or breach of trust is a matter between the donor and the donee.’ An attorney holder may however execute a deed of conveyance in exercise of the power granted under the power of attorney and convey title on behalf of the grantor”. The case law further explains the scope of wills in the following words, “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 lifetime of the testator. It is said that so long as the testator is alive, a will is not 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<a href="#ftnt7" id="ftnt_ref7">[7]</a>. Registration of a will does not make it any more effective.” Thus, the Court concluded by stating that, “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<a href="#ftnt8" id="ftnt_ref8">[8]</a>, that the ‘concept of power of attorney sales have been recognised 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 recognised or accepted mode of transfer and that it can be a valid substitute for a sale deed. 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. 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 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 recognised 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 is put to the pernicious practice of SA/GPA/WILL transactions known as GPA sales. It has been submitted that making a 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 regularise the transactions by obtaining deeds of conveyance. It is also submitted that this decision should be made applicable prospectively to avoid hardship. 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 agreements 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 regularisation of allotments/leases by Development Authorities. We make it clear that if the documents relating to‘SA/GPA/WILL transactions’ have been accepted and 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. 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”The Supreme Court in the case of Ghanshyam v. Yogendra Rathi<a href="#ftnt9" id="ftnt_ref9">[9]</a> upheld the judgement of the Suraj Lamp Case and held that, “It goes without saying that the power of attorney executed by the appellant-defendant is of no consequence as on the strength of said power of attorney, neither sale deed has been executed nor any action pursuant thereof has been taken by the power-of-attorney holder which may confer title upon the respondent-plaintiff. Non-execution of any document by the general power-of-attorney holder consequent to it renders the said general power of attorney useless. Similarly, the will dated 10-4-2002 executed by the appellant-defendant in favour of the respondent-plaintiff is meaningless as the will, if any, comes into effect only after the death of the executant and not before it. It has no force till the testator or the person making it dies. The said stage has not arrived in the present case and, therefore, even the aforesaid will in no way confers any right upon the respondent-plaintiff. Similarly, the will dated 10-4-2002 executed by the appellant-defendant in favour of the respondent-plaintiff is meaningless as the will, if any, comes into effect only after the death of the executant and not before it. It has no force till the testator or the person making it dies. The said stage has not arrived in the present case and, therefore, even the aforesaid will in no way confers any right upon the respondent-plaintiff. In connection with the general power of attorney and the will so executed, the practice, if any, prevalent in any State or the High Court recognising these documents to be documents of title or documents conferring right in any immovable property is in violation of the statutory law. Any such practice or tradition prevalent would not override the specific provisions of law which require execution of a document of title or transfer and its registration so as to confer right and title in an immovable property of over ₹100 in value. The decisions of the Delhi High Court in Veer Bala Gulati v. MCD<a href="#ftnt10" id="ftnt_ref10">[10]</a>, following the earlier decision of the Delhi High Court itself in Asha M. Jain v. Canara Bank<a href="#ftnt11" id="ftnt_ref11">[11]</a>, holding that the agreement to sell with payment of full consideration and possession along with irrevocable power of attorney and other ancillary documents is a transaction to sell even though there may not be a sale deed, are of no help to the respondent-plaintiff inasmuch as the view taken by the Delhi High Court is not in consonance with the legal position which emanates from the plain reading of Section 54 of the Transfer of Property Act, 1882. In this regard, reference may be had to two other decisions of the Delhi High Court in Imtiaz Ali v. Nasim Ahmed<a href="#ftnt12" id="ftnt_ref12">[12]</a>, and G. Ram v. DDA<a href="#ftnt13" id="ftnt_ref13">[13]</a>,  which inter alia observe that an agreement to sell or the power of attorney are not documents of transfer and as such the right, title and interest of an immovable property do not stand transferred by mere execution of the same unless any document as contemplated under Section 54 of the Transfer of Property Act, 1882, is executed and is got registered under Section 17 of the Registration Act, 1908. The decision of the Supreme Court in Suraj Lamp & Industries (P) Ltd. v. State of Haryana<a href="#ftnt14" id="ftnt_ref14">[14]</a> also deprecates the transfer of immovable property through sale agreement, general power of attorney and will instead of registered conveyance deed.”<hr class="c12"><div><a href="#ftnt_ref1" id="ftnt1">[1]</a> . (2009) 7 SCC 363.</div><div><a href="#ftnt_ref2" id="ftnt2">[2]</a> . Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana (2009) 7 SCC 363.</div><div><a href="#ftnt_ref3" id="ftnt3">[3]</a>. (1977) 3 SCC 247.</div><div><a href="#ftnt_ref4" id="ftnt4">[4]</a>. See Rambaran Prosad v. Ram Mohit Hazra 1966 SCC Online SC 20.</div><div><a href="#ftnt_ref5" id="ftnt5">[5]</a>. 2004 (8) SCC 614.</div><div><a href="#ftnt_ref6" id="ftnt6">[6]</a>. 2005 (12) SCC 77.</div><div><a href="#ftnt_ref7" id="ftnt7">[7]</a>. See Sections 69 and 70 of the Indian Succession Act, 1925.</div><div><a href="#ftnt_ref8" id="ftnt8">[8]</a>. 2001 SCC Online Del 1157.</div><div><a href="#ftnt_ref9" id="ftnt9">[9]</a> (2023) 7 SCC 361.</div><div><a href="#ftnt_ref10" id="ftnt10">[10]</a>. 2003 SCC OnLine Del 345.</div><div><a href="#ftnt_ref11" id="ftnt11">[11]</a>. 2001 SCC OnLine Del 1157. </div><div><a href="#ftnt_ref12" id="ftnt12">[12]</a>. 1986 SCC OnLine Del 269. </div><div><a href="#ftnt_ref13" id="ftnt13">[13]</a>. 2002 SCC OnLine Del 405.</div><div><a href="#ftnt_ref14" id="ftnt14">[14]</a>. (2009) 7 SCC 363.</div></body> </div> </div> </div> </div> <script type="text/javascript"> (function (require) { require(['/static/js/dateutil_factory.a28baef97506.js?raw'], function () { require(['js/dateutil_factory'], function (DateUtilFactory) { DateUtilFactory.transform('.localized-datetime'); }); }); }).call(this, require || RequireJS.require); </script> <script> function emit_event(message) { parent.postMessage(message, '*'); } </script> </div>

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