The Supreme Court has held that sale of leasehold or freehold property through general power of attorney (GPA) is invalid and to get title over the property, these GPA agreements have to be converted into registered sale deeds.
“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 as valid mode of transfer of immoveable property,” said a bench of Justices R V Raveendran, A K Patnaik and H L Gokhale.
“The courts will not treat such transactions as completed or concluded transfers or as conveyances as they neither convey title not create any interest in an immovable property,” the bench said.
However, the court took care not to instill fear among people who have resorted to GPA sale. It said it had merely drawn attention to the invalidity of transfer of title through GPA sales though these could “continue to be treated as existing agreement of sale”.
It said a lease could be validly transferred only under a registered assignment of lease and added, “It is time that an end is put to the practice of SA/GPA/Will transactions known as GPA sales.”
As an advice, the bench said, “Nothing prevents affected parties from getting registered Deeds of Conveyance to complete their title”.
This judgment will lead to a rush for registration of GPA sale agreements with the authorities in Delhi as a majority of property transfers is done through such a route.
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