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GPA
7 months ago
I am about to buy a property from seller. On the same property owner gave GPA to his Brother and GPA is not revoked.
1.Is there any legal issues in this transaction?
A.Dear Client,
Power of attorney (PoA) is a legal arrangement that allows one person to act on behalf of another. A power of attorney (PoA) is governed by the Powers of Attorney Act 1888. A POA is valid only during the lifetime of the principal/executor. However, the principal can revoke/cancel it anytime, if required. Section 17(1)(b) of the Indian Registration Act, 1908 requires registration of certain instruments in respect of any right, title or interest of the value of rupees one hundred and upwards affecting immovable property. So, a well-drafted POA is required to be executed and registered for the purpose of enhancing the evidentiary value of the document and enforceability for different purposes. The Hon’ble Supreme Court in the matter of Suraj Lamp & Industries Pvt. Ltd. Vs. State of Haryana & Anr. vide its judgment dated October 11, 2011, held that this judgment will not affect "genuine transactions" under the GPA. In order to ensure that GPA continues to serve its purpose, the court said its judgment will not 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. The court further said that a person can enter into a development agreement with a land developer or builder for developing the land either by forming plots or by constructing apartment buildings. In that connection, he can execute an agreement of sale and grant a power of attorney that will allow the developer to further sell the property to prospective purchasers. In view of the above findings of Apex Court, you being a prospective buyer need to verify the status of encumbrance in respect of the title of the property through court searching and get yourself satisfied with the present status of the property before taking the final decision in the matter. Reach out to an Advocate for proper guidance and steps.
Power of attorney (PoA) is a legal arrangement that allows one person to act on behalf of another. A power of attorney (PoA) is governed by the Powers of Attorney Act 1888. A POA is valid only during the lifetime of the principal/executor. However, the principal can revoke/cancel it anytime, if required. Section 17(1)(b) of the Indian Registration Act, 1908 requires registration of certain instruments in respect of any right, title or interest of the value of rupees one hundred and upwards affecting immovable property. So, a well-drafted POA is required to be executed and registered for the purpose of enhancing the evidentiary value of the document and enforceability for different purposes. The Hon’ble Supreme Court in the matter of Suraj Lamp & Industries Pvt. Ltd. Vs. State of Haryana & Anr. vide its judgment dated October 11, 2011, held that this judgment will not affect "genuine transactions" under the GPA. In order to ensure that GPA continues to serve its purpose, the court said its judgment will not 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. The court further said that a person can enter into a development agreement with a land developer or builder for developing the land either by forming plots or by constructing apartment buildings. In that connection, he can execute an agreement of sale and grant a power of attorney that will allow the developer to further sell the property to prospective purchasers. In view of the above findings of Apex Court, you being a prospective buyer need to verify the status of encumbrance in respect of the title of the property through court searching and get yourself satisfied with the present status of the property before taking the final decision in the matter. Reach out to an Advocate for proper guidance and steps.
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