2025 Legal Eagle (SC) 219 : 2025 Gojuris (SC) 219 : 2025 Live Law (SC) 257

Supreme Court on Transfer of Property Through POA/ATS--

In a Latest Judgment of Hon’ble Supreme Court (Date of Decision – 27-02-2025, in the Case Titled as - M.S. Ananthamurthy&Anr. VS. J. Manjulaetc),Hon’ble Supreme Court by relying on its Previous Judgment in the Case of Suraj Lamps Vs. State of Haryana (dt. 11-10-2011)Pointed out various Law points (as mentioned Below) regarding Transfer of a Property and upheld that Valid mode of Transfer of a Property is only through a registered deed of Conveyance. Some important Law points of the judgement in the form of short notes along with a Short Summary of the Case are mentioned below—

Summary of the Case—

-         Brief Facts of the case are that the Suit Property was sold by the original owner on 04.04.1986by executing an Irrevocable Power of attorney and an Unregistered Agreement to Sell, in favour of one A. Saraswathi.

-         On 30.01.1997, the original owner, executant of the POA died.

-         On 01.04.1998, the holder of POA (after death of Executant of POA) executed a registered sale deed with respect to the Suit Property in favour of her son, i.e., the appellant no. 2 -M.S. Ananthamurthy.

-         On the other hand, several years after the death of the original owner, his legal heirs through a registered sale deed dated 21.03.2003 sold the same Suit Property to the respondent no. 7. Subsequently, respondent no. 7 sold the Suit Property to the respondent no. 8 vide another registered sale deed dated 29.09.2003 AND on 06.12.2004, the respondent no. 8 executed a registered gift deed in favour of her daughter, i.e., theanswering respondent (J. Manjula).

-         Now the Legal dispute is regarding valid ownership of the suit property—Whether title of J. Manjula (Travelled through Legal Heirs of Original Owner) is valid; ORtitle ofM.S. Ananthamurthy(Travelled through Holder of GPA/ATS) is valid-

Important Law Points as upheld by Hon’ble Supreme Court-

Ø Valid Transfer—Transfer of Property Act- 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 as valid mode of transfer of immovable property. (Reliance Placed on 2011 Judgment of Suraj Lamps vs. State of Haryana)

Ø Power of Attorney- when become Irrevocable- Contract Act-The relationship between the executant of a General power of attorney and the holder of the Power of Attorney is one of Principal and Agent.Section 201 of the Contract Act prescribes various ways of revocation of authority given by the principal to his agent. Section 202 of the Contract Act, as an exception to the general rule under Section 201, prescribes that where an agent has himself an interest in the property which forms the subject-matter of the agency, the agency cannot be terminated to the prejudice of such interest unless there is an express stipulation to the contrary.Therefore, the essentials of Section 202 of the Contract Act are, first, there shall be a relationship in the capacity of ‘principal and agent’ between the parties and secondly, there shall be agent’s interest in the subject-matter of the agency. If both the conditions are fulfilled the agency becomes irrevocable and cannot be terminated unilaterally at the behest of the principal.

Ø Principle and Agent-Effect of Death of Principle- Section 201 and 202 of Contract Act- Principle of Nemo Dat Quod Non Habet (A person cannot transfer a better title than he has)- Court Held that, Power of Attorney which is an agency Contract terminates on the death of Principle. As soon as the executant of POA dies, the right given to the agent comes to an end. – A POA is not an instrument of transfer qua any right, title or interest in anyimmovable property. Once the agency is terminated, the agent cannot act on the basis of the power granted to him under the GPA.

Ø Agreement to Sell- Unregistered- Effect thereof- Registration Act-It is a settled law that a transfer of immovable property by way of sale can only be by a deed of conveyance. An agreement to sell is not a conveyance. It is not a document of title or a deed of transfer of deed of transfer of property and does not confer ownership right or title. An agreement to sell does not meet the requirements of Sections 54 and 55 of the Transfer of Property Act to effectuate a ‘transfer’.An agreement of sale only creates an interest in the Property and to enforce that interest the intended buyer is required to file a suit for specific performance by virtue of Section 40 of the Transfer of Property Act, 1882. Further, if interest had been transferred by way of a written document, it had to be compulsorily registered as per Section 17(1) (b) of the Registration Act.In view of Section 17 of the Registration Act, a property worth Rs. 100 or more cannot be transferred without registration. In the present case, the value of property is more than Rs. 100, therefore, the original owner could not have transferred the property merely by an agreement to sell or GPA or by executing both.

Conclusion-

Considering all the above mentioned Points, Hon’ble Supreme Court had dismissed the appeal and upheld the title of J. Manjulavide this Judgement, Relevant Portion of said Judgment is reproduced here as below-

“The High Court rightly held that even though the GPA and the agreement to sell werecontemporaneous documents executed by the original owner in favour of the holder, this alone cannot be a factor to reach the conclusion that she had an interest in the POA. Thus, even though the GPA and the agreement to sell were contemporaneous documents executed by the original owner in favour of the same beneficiary, this cannot be the sole factor to conclude that she had an interest in the subject-matter. Even if such an argument were to persuade this Court, the document must have been registered as per Section 17(1)(b) of the Registration Act. In the absence of such registration, it would not be open for the holder of the POA to content that she had a valid right, title and interest in the immovable property to execute the registered sale deed in favour of appellant no. 2.”

Hence, it is upheld that Valid mode of Transfer of aImmovable Property is only through 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 as valid mode of transfer of immovable property. (Reliance Placed on 2011 Judgment of Suraj Lamps vs. State of Haryana)..