Legal Advice on Property Buying through GPA
2 weeks ago
We Recently buying a duplex house in 3 floors building 2 flats combined as duplex which area covered of 1630 (815 Gound floor and 815 First Floor) of UBS 60yards on total area...everything ok seller is settled in AMERICA he Provided GPA to his brother but in GPA Document they provided as 005 in first floor instead of 005 in ground floor and 105 in first floor but mentioned area 1630 60yards and Floor plan everything corrrect is there any problem if we buy this property already we paid advance amount and loan also approved ....if we go for re-isssue of GPA approved loan will be cancelled and advance amount and challan paid for registration takes length time to return do we get any issue if we register this property in future by owners or for reselling owner stating that he will provide affidavit of all mistakes and amount cleared what we want is it valid please response asasp
A.Dear client, the tranfer of title cannot be made through the GPA. If you are buying the property it's the sale deed which tranfers the title and gives absolute right over the property. Make sure that the sale deed or conveyance deed didn't have those incorrect information of the property which you are buying.
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A.Dear Sir,
No property sale on power of attorney: Supreme Court
Property sales through the common practice of general power of attorney (GPA) will not give ownership title to the buyer.
In a landmark judgment that is expected to send a large number of property owners into a tizzy, the Supreme Court held that the GPA method of immovableproperty sales is not a valid form of transfer of property.
A three-judge bench presided over by Justice R. V. Raveendran said that property can be lawfully transferred only through registered sale deeds.
"A power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property," the bench said, after interpreting various provisions of the law concerning property sales. However, the bench said the judgment will not affect "genuine transactions" under the GPA.
The judgment delivered on Wednesday would have an impact on both freehold and leasehold properties and affect the mode of transfer of property in Delhi and the National Capital Region (NCR) where GPA sales are very common. Even though it can cause some hardship to those who have already purchased property through the GPA, the order will help curb evasion of duties, flow of black money into real estate and also save people from being cheated by unscrupulous owners selling the same property to several people.
• Flat sold by builder to third party whem my Agreement to sale was valid
I had executed a Agreement to sale on one flat at Agra U.P. in (date) with a validity of 15 months ,after 15 months the builder with mutual consent and reason that the the construction work is not over renewed it for another 12 months upto (date),again with the same reason it sought and extension of another 6 months of agreement to sale which was made and agreement to sale was extended upto (date).
After this we issued a notice to the builder and on reply to notice the builder through its legal counsel sought again time upto (date).Subsequently again a notice was given on (date) to execute the sale deed but the builder again replied by letter and sought extension upto (date) with the same reason that flats are incomplete.After (date) the builder is untraceable and recently he was arrested on forgery charges and currently in jail.On enquiry I came to know that the builder sold my flat that was having valid agreement to sale to third party with sale deed date.During this period my agreement to sale was valid but now builder is in jail what is the legal remedy and the party having sale deed has occupied the flat .now what is the legal remedy me to get my flat back.
Bench: R.V. Raveendran, A.K. Patnaik, H.L. Gokhale Reportable IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION SPECIAL LEAVE PETITION (C) NO.13917 OF 2009 Suraj Lamp & Industries Pvt. Ltd. .....Petitioner Vs. State of Haryana & Anr. ....Respondents J U D G M E N T R. V. Raveendran J. By an earlier order dated 15.5.2009 [reported in Suraj Lamp & Industries Pvt.Ltd. vs. State of Haryana & Anr. - 2009 (7) SCC 363], we 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. As noticed in the earlier order, these kinds of transactions were evolved to avoid prohibitions/conditions regarding certain transfers, to avoid payment of stamp duty and registration charges on deeds of conveyance, to avoid payment of capital gains on transfers, to invest unaccounted money (`black money') and to avoid payment of `unearned increases' due to Development Authorities on transfer. 2. 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:
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Section 53A in The Transfer of Property Act,
1[53A. Part performance.—Where any person contracts to transfer for consideration any immoveable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then, notwithstanding that 2[***] where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract: Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof.]
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Sec 202 of Indian contract act says irrevocable GPA cannot be cancelled as it is executed for consideration.
Section 202 in The Indian Contract Act, 1872
1. Termination of agency, where agent has an interest in subject-matter.—Where the agent has himself an interest in the property which forms the subject-matter of the agency, the agency cannot, in the absence of an express contract, be terminated to the prejudice of such interest. —Where the agent has himself an interest in the property which forms the subject-matter of the agency, the agency cannot, in the absence of an express contract, be terminated to the prejudice of such interest." Illustrations
(a) A gives authority to B to sell A’s land, and to pay himself, out of the proceeds, the debts due to him from A. A cannot revoke this authority, nor can it be terminated by his insanity or death. (a) A gives authority to B to sell A’s land, and to pay himself, out of the proceeds, the debts due to him from A. A cannot revoke this authority, nor can it be terminated by his insanity or death."
(b) A consigns 1,000 bales of cotton to B, who has made advances to him on such cotton, and desires B to sell the cotton, and to repay himself out of the price the amount of his own advances. A cannot revoke this authority, nor is it terminated by his insanity or death. (b) A consigns 1,000 bales of cotton to B, who has made advances to him on such cotton, and desires B to sell the cotton, and to repay himself out of the price the amount of his own advances. A cannot revoke this authority, nor is it terminated by his insanity or death."
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Govt tightens power of attorney rules
CHENNAI: The Tamil Nadu registration department has tightened the noose around realtors using power of attorney (POA) for fraudulent land deals. Power of attorney authorizes a person to carry out transactions or act legally on behalf of another.
Under the new rules, a power of attorney holder seeking to carry out a land transaction will have to provide documentary evidence to the sub-registrar to prove that the principal, the person who issued the power of attorney, is alive. The principal has to obtain a "live" certificate with his photograph affixed to it from a registered medical practitioner or a gazetted officer. These certificates are valid for 30 days.
As per a recent order of the inspector general of registration, the new rules are applicable to all POAs registered from February 4. By law, POA is not valid once the principal dies. Section 34 of Tamil Nadu Registration Act says it is the duty of the sub-registrar to ascertain whether the POA holder has the right to execute a transaction on behalf of the principal. But sub-registrars register property documents without bothering to verify whether the principals were alive.
"In Tamil Nadu, where a large number of land transactions are carried out on the basis of POAs to circumvent payment of stamp duty and registration fees. Many instances have been reported of POA holders selling land after the death of the principal. Buyers get into trouble when legal heirs of the principal claim rights over the property. Such cases end up in protracted legal battles and ultimately the sale deeds are declared invalid," said a senior official.
There have been instances of people impersonating land owners and executing fraudulent POAs. In one case, land worth 9 crore on Venkatnarayana Road was sold to a business group based on a POA, reportedly executed by the land owner in 2008. Legal heirs of the land owner subsequently filed a case of forgery against the business group, brokers and others involved in the deal as the owner had died 28 years earlier. When police refused to take prompt action, the owners moved the court.
As per law, the principal also has the right to rescind a POA. "If there is a mention of a consideration (amount) in the POA, the holder can claim that money through legal means. But he cannot claim rights over the property once the POA is rescinded or the principal dies," said the official.In 2010-11, more than 3.75 lakh POAs were registered across Tamil Nadu for property-related transactions. The number came down to 1.8 lakh last year. It is going up again this year, said the official.
No property sale on power of attorney: Supreme Court
Property sales through the common practice of general power of attorney (GPA) will not give ownership title to the buyer.
In a landmark judgment that is expected to send a large number of property owners into a tizzy, the Supreme Court held that the GPA method of immovableproperty sales is not a valid form of transfer of property.
A three-judge bench presided over by Justice R. V. Raveendran said that property can be lawfully transferred only through registered sale deeds.
"A power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property," the bench said, after interpreting various provisions of the law concerning property sales. However, the bench said the judgment will not affect "genuine transactions" under the GPA.
The judgment delivered on Wednesday would have an impact on both freehold and leasehold properties and affect the mode of transfer of property in Delhi and the National Capital Region (NCR) where GPA sales are very common. Even though it can cause some hardship to those who have already purchased property through the GPA, the order will help curb evasion of duties, flow of black money into real estate and also save people from being cheated by unscrupulous owners selling the same property to several people.
• Flat sold by builder to third party whem my Agreement to sale was valid
I had executed a Agreement to sale on one flat at Agra U.P. in (date) with a validity of 15 months ,after 15 months the builder with mutual consent and reason that the the construction work is not over renewed it for another 12 months upto (date),again with the same reason it sought and extension of another 6 months of agreement to sale which was made and agreement to sale was extended upto (date).
After this we issued a notice to the builder and on reply to notice the builder through its legal counsel sought again time upto (date).Subsequently again a notice was given on (date) to execute the sale deed but the builder again replied by letter and sought extension upto (date) with the same reason that flats are incomplete.After (date) the builder is untraceable and recently he was arrested on forgery charges and currently in jail.On enquiry I came to know that the builder sold my flat that was having valid agreement to sale to third party with sale deed date.During this period my agreement to sale was valid but now builder is in jail what is the legal remedy and the party having sale deed has occupied the flat .now what is the legal remedy me to get my flat back.
Bench: R.V. Raveendran, A.K. Patnaik, H.L. Gokhale Reportable IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION SPECIAL LEAVE PETITION (C) NO.13917 OF 2009 Suraj Lamp & Industries Pvt. Ltd. .....Petitioner Vs. State of Haryana & Anr. ....Respondents J U D G M E N T R. V. Raveendran J. By an earlier order dated 15.5.2009 [reported in Suraj Lamp & Industries Pvt.Ltd. vs. State of Haryana & Anr. - 2009 (7) SCC 363], we 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. As noticed in the earlier order, these kinds of transactions were evolved to avoid prohibitions/conditions regarding certain transfers, to avoid payment of stamp duty and registration charges on deeds of conveyance, to avoid payment of capital gains on transfers, to invest unaccounted money (`black money') and to avoid payment of `unearned increases' due to Development Authorities on transfer. 2. 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:
============================================================
Section 53A in The Transfer of Property Act,
1[53A. Part performance.—Where any person contracts to transfer for consideration any immoveable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then, notwithstanding that 2[***] where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract: Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof.]
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Sec 202 of Indian contract act says irrevocable GPA cannot be cancelled as it is executed for consideration.
Section 202 in The Indian Contract Act, 1872
1. Termination of agency, where agent has an interest in subject-matter.—Where the agent has himself an interest in the property which forms the subject-matter of the agency, the agency cannot, in the absence of an express contract, be terminated to the prejudice of such interest. —Where the agent has himself an interest in the property which forms the subject-matter of the agency, the agency cannot, in the absence of an express contract, be terminated to the prejudice of such interest." Illustrations
(a) A gives authority to B to sell A’s land, and to pay himself, out of the proceeds, the debts due to him from A. A cannot revoke this authority, nor can it be terminated by his insanity or death. (a) A gives authority to B to sell A’s land, and to pay himself, out of the proceeds, the debts due to him from A. A cannot revoke this authority, nor can it be terminated by his insanity or death."
(b) A consigns 1,000 bales of cotton to B, who has made advances to him on such cotton, and desires B to sell the cotton, and to repay himself out of the price the amount of his own advances. A cannot revoke this authority, nor is it terminated by his insanity or death. (b) A consigns 1,000 bales of cotton to B, who has made advances to him on such cotton, and desires B to sell the cotton, and to repay himself out of the price the amount of his own advances. A cannot revoke this authority, nor is it terminated by his insanity or death."
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Govt tightens power of attorney rules
CHENNAI: The Tamil Nadu registration department has tightened the noose around realtors using power of attorney (POA) for fraudulent land deals. Power of attorney authorizes a person to carry out transactions or act legally on behalf of another.
Under the new rules, a power of attorney holder seeking to carry out a land transaction will have to provide documentary evidence to the sub-registrar to prove that the principal, the person who issued the power of attorney, is alive. The principal has to obtain a "live" certificate with his photograph affixed to it from a registered medical practitioner or a gazetted officer. These certificates are valid for 30 days.
As per a recent order of the inspector general of registration, the new rules are applicable to all POAs registered from February 4. By law, POA is not valid once the principal dies. Section 34 of Tamil Nadu Registration Act says it is the duty of the sub-registrar to ascertain whether the POA holder has the right to execute a transaction on behalf of the principal. But sub-registrars register property documents without bothering to verify whether the principals were alive.
"In Tamil Nadu, where a large number of land transactions are carried out on the basis of POAs to circumvent payment of stamp duty and registration fees. Many instances have been reported of POA holders selling land after the death of the principal. Buyers get into trouble when legal heirs of the principal claim rights over the property. Such cases end up in protracted legal battles and ultimately the sale deeds are declared invalid," said a senior official.
There have been instances of people impersonating land owners and executing fraudulent POAs. In one case, land worth 9 crore on Venkatnarayana Road was sold to a business group based on a POA, reportedly executed by the land owner in 2008. Legal heirs of the land owner subsequently filed a case of forgery against the business group, brokers and others involved in the deal as the owner had died 28 years earlier. When police refused to take prompt action, the owners moved the court.
As per law, the principal also has the right to rescind a POA. "If there is a mention of a consideration (amount) in the POA, the holder can claim that money through legal means. But he cannot claim rights over the property once the POA is rescinded or the principal dies," said the official.In 2010-11, more than 3.75 lakh POAs were registered across Tamil Nadu for property-related transactions. The number came down to 1.8 lakh last year. It is going up again this year, said the official.
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A.Dear Client,
A GPA should be registered under the Registration Act, 1908 to make it legally enforceable for all the purposes it is executed by the Executor/principal empowering/authorizing a person to act or do on his behalf. According to the Ministry of External Affairs, Government of India, all GPAs executed outside India must be consularized. The GPA from abroad has to be attested in the Indian Consulate in a foreign country. This adds an extra layer of verification and is mandatory for the GPA to be valid in India. The GPA needs to be registered at the local sub-registrar office. An attorney or a legal representative usually does this. A GPA is effective while the executor is alive and expires upon his death. Upon execution of GPA, the Executor/principal already declares and binds himself to be responsible for any act or omission if done by his attorney and indemnifies the loss caused to the party, so there is no necessity for additional affidavit for the purpose. The contents of GPA showing incorrect measurements of property may not affect its validity if it is made in compliance with the required procedure and formalities and if the Registrar accepts the same for registration. You need to focus on the Deed of Sale or Deed of Conveyance and must ensure that the correct measurement of the property is mentioned in the Schedule of Property or not following the link deeds and physical measurement of the property by a certified surveyor or property valuer. The lending bank is equally responsible and liable for processing a loan application without verifying the documents before approving the loan to the borrower. If required, consult with an experienced Civil Lawyer for guidance and steps.
A GPA should be registered under the Registration Act, 1908 to make it legally enforceable for all the purposes it is executed by the Executor/principal empowering/authorizing a person to act or do on his behalf. According to the Ministry of External Affairs, Government of India, all GPAs executed outside India must be consularized. The GPA from abroad has to be attested in the Indian Consulate in a foreign country. This adds an extra layer of verification and is mandatory for the GPA to be valid in India. The GPA needs to be registered at the local sub-registrar office. An attorney or a legal representative usually does this. A GPA is effective while the executor is alive and expires upon his death. Upon execution of GPA, the Executor/principal already declares and binds himself to be responsible for any act or omission if done by his attorney and indemnifies the loss caused to the party, so there is no necessity for additional affidavit for the purpose. The contents of GPA showing incorrect measurements of property may not affect its validity if it is made in compliance with the required procedure and formalities and if the Registrar accepts the same for registration. You need to focus on the Deed of Sale or Deed of Conveyance and must ensure that the correct measurement of the property is mentioned in the Schedule of Property or not following the link deeds and physical measurement of the property by a certified surveyor or property valuer. The lending bank is equally responsible and liable for processing a loan application without verifying the documents before approving the loan to the borrower. If required, consult with an experienced Civil Lawyer for guidance and steps.
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