Property registered via irrevocable POA
I need an advice whether the property title is clear and marketable. Below is the sequence of the events.
1. The said plot was allotted to Mr X by Kanpur Development Authority in 09-06-75 however the registry was executed via POA which was duly registered in Consulate General of India in Canada.
2. Thereafter the POA was revoked in 15-05-90 via executing revocation of POA which was also registered in Consulate General of India in Canada.
3. On the same day (i.e. 15-05-90) the POA was given to another relative and this POA was also registered in Consulate General of India in Canada. This POA gave all the powers to the POA including sale of property and to do all acts and deeds and things in respect of the said property. Moreover, it was expressly written in the POA as irrevocable POA.
4. Thereafter, the current POA sold the plot to Mr Y in 1995 however the property was registered (via registry) in 2007.
5. The current owner i.e. Mr Y, has all original documents such as
a. Original sale/allotment deed executed by Kanpur Development Authority
b. Original revocation of POA executed on 15-05-90
c. Original POA executed on 15-05-90
d. Original registry executed in 2007 on the basis of POA
6. The said property was a lease hold property and it has been converted to freehold by executing freehold deed in favour of the current owner i.e. Mr Y in 2014 by Kanpur Development Authority after paying huge amount of penalty for non-construction of Rs 75 lacs (34% of the current property price).
7. Mutation in the development authority, house tax, water tax all is in his name.
We have no means to verify that principal (i.e. Mr X) was alive when the property was registered in the name of Mr Y in 2007 via the POA however since last 19 years the property is in possession of Mr Y. Since this is an irrevocable POA (as mentioned in the POA) will it make any difference if the principle was not alive at the time of registry?
Asked 3 years ago in Property Law from Bahrain
1) Even though the wording says that the POA is irrevocable, if the Principal dies the POA ceases to be valid and any act done or executed by the POA will be illegitimate if the act is done by the POA with the knowledge that the principal is dead.
2) Therefore unless and until it can be proved that the POA acted with the knowledge of the death of the principal the sale would be absolute and the title acquired by Y absolute.
3) Though a POA is irrevocable the Principal it's at liberty to revoke it any time by giving a notice and executing a Revocation of POA.
4) The above being stated it the POA acted in good faith believing that the principal was alive when the sale was executed in favour of Y there is no anomaly as it would be treated a valid sale by the registered POA holder.
Hi, power of attorney only valid till principal was alive and power of attorney dies along with person and any act done by attorney after his death is not valid.
1. A Power of Attorney continues in force until expressly revoked or determined by the death of either party. So it is not valid after the death of executor under any circumstances. The GPA is valid only till the date of death of the principal, as the Power of Attorney is only a agent and once the Principal dies, along with the death the agent's power also comes to an end.
2. You have stated that the registry of the plot was executed in terms of a POA which was executed in Canada and that the POA was revoked on 15-05-1990. If the registry had been executed prior to 15-05-1990 then where is the question of the POA being subsequently revoked? The title had passed to X the moment the title deed was registered in his favour.
3. What was the authority conferred by the POA which was revoked on 15-05-90? Was the authority limited to executing the conveyance deed in favour of Mr.X? It is your own statement that prior to the revocation of POA the conveyance deed had been executed. If this be so, the POA ceased to operate.
4. If Mr.X was not alive as on the date of registration of the title deed in favour of Mr.Y the POA had no authority to execute the sale in favour of Y. As a corollary thereto, the title of Y is not clear and marketable. Mere possession of the property for the past 19 years does not confer ownership on Mr.Y. A suit for his eviction can be filed by the legal heirs of Mr.X.
1) it is necessary to peruse the various documents cited by you to advise .
2) from the facts stated by you it appears that POA had been executed by mr X in favour of relative in May 1990 after revocation of earlier POA
3) sale deed has been executed in 2007 by relative in favour of Y . . it is duly stamped and registered
4) you have to ask seller to furnish documentary evidence that X was alive in 2007 . if X had died POA would cease to operate .
5) although it is mentioned that POA is irrevocable it would be so only if it is coupled with consideration
6) under the circumstances contact a local lawyer and only on basis of his written opinion that title is clear and marketable proceed with purchase of property .
7) in addition obtain bank loan for purchase of property . bank would carry out due diligence before sanction of loan . it would further safeguard your interests
Dear Ajay,Mathew and Ashish,
Many thanks for the response. Can you please advice on the below
Considering, substance over form and the below points, can I purchase the property? Secondly is there a way to cover myself while buying the property- like it can be mentioned in registry that in case of any dispute the seller (Mr Y) would be responsible and should pay the entire amount back to me along with interest.
1. The current owner i.e. Mr Y, has all original documents such as Original receipts of payment made to development authority, Original allotment deed executed in 1975, Original Revocation of POA executed 15-05-90, Original POA executed on 15-05-90, Original registry executed in 2007 on the basis of POA etc.
2. Further Mr X purchased plot on lessee for 99 years from the development authority in 1975
a. Mr X did not construct anything on the plot.
b. Moreover, Mr X did not get the map sanctioned from the development authority
On the contrary, Mr Y paid penalty for non-construction of Rs 75 lacs (34% of the current value of the property) and got the property converted from lessee hold to freehold after paying the relevant charges (via freehold registry executed by development authority after verifying the chain deeds and POA’s) and also got the map scanned in his favour. Mr Y is in possession of land for the past 19 years and he is using part of land as his office for past 10 years.
3. In the registry executed in favour of Mr Y in 2007 via the POA, it is mentioned that the Mr X was alive at that time and in the POA it is expressly written that the POA is irrevocable however the consideration is not mentioned in the POA although it was paid in 1995 when he was alive. The POA is a relative of MR X. I have no means to verify that MR X was alive at the time when the registry was executed in favour of Mr Y as he was staying in Canada.
4. I had applied for Home loan from the bank to buy this property. Private bank has sanctioned the loan however nationalized bank is asking for proof that Mr X was alive at the time the registry was executed in favour of Mr Y.
5. The current owner i.e. Mr Y is a well know and wealthy party. The property is being traded at price slightly (10%) below the stamp duty value and hence the entire money is being by cheque i.e. it is white money and it will be registered for that amount. Moreover, the property is slightly cheaper (15%) than the market rate not because of the defect in property papers but it was lessee hold property and map was not approved, which I have got it done after investing 8 months and paying huge penalty of Rs 75 lacs (34% of the current value of property) however it has been borne by the seller.
Will this defect always remain in the property or after certain years or after my registry it would not be very relevant. Will I face the same problem, if I want to sell it after 5 to 10 years from now.
Many Thanks for all the help and advice
Asked 3 years ago
Hi, the decession to purchase the property is left to you and these are the legal defects and you will face the same problem evenafter 5 or 10 years because principal was alive at the time of executing the sale deed is crucial in your case.
11) the fact that all original documents are in possession of seller does indicate that title is clear and marketable . but the contents of documents have to be perused to advice
2) sale deed generally contains an indemnity clause where in seller indemnifies purchasers against all claims made in respect of the property
3) the fact that leasehold land has been converted into freehold land after following due process of law does increase market value of the property
4) since it is mentioned that in 2007 sale deed that Mr X was alive just ask seller to produce necessary documentary evidence in this regard
5) nationalised bank has rightly asked for evidence that Mr X was alive at time of execution of sale deed in 2007
6) you can contact a detective agency to gather evidence that seller Mr X was alive in 2007
7) when you seek to sell the property every buyer would ask the same question whether Mr X was alive at time of execution of sale deed
1. Alll the stated papers/documents including the POA is required to be perused for proper advice. Was any consideration taken by X before executing and registering the asid POA duly paying the required stamp duty?
2. The property is marketable if X is still alive,
2. If X is not alive the POA executed by him ceases to have any effect,
3. Also make sure that the fact of revocation of the POA executed in favour of the 1st holder was duly informed to him.
1. In normal course the indemnity clause is mentioned in the sale deeds but it will be difficult for you to get back your consideration and also the registration cost. You shall have to file a money suit which will take years to be disposed of,
2. Holding the original papers, getting the type of the land converted, having possession of the land for a long time etc. does not give clear title of the property. Clear title is obtained by legally getting the deed of Conveyance executed & registered. Getting the property executed by the POA holder of the owner is invalid if the owner is deceased on the date of such execution,
3. Find out the date of demise of X. If he was alive when the POA holder had executed and registered the said property in gavour of Y then, Y has a clear title and you can buy the said property from him now,
4. If the land owner had expired before the date of the said execution and registration of the said property to Y by the POA holder, then it was an invalid sale deed. Do not go for it to avoid any future trouble legally.
1. As per the facts furnished by you, it seems that Y has all the required documents with him which can establish his ownership. The only impediment is that it is not certain whether X was alive or not at the time of the sale. The sale deed executed in 2007 has a clear mention of X being alive. So there is a presumption that he was alive as on the date of sale. If he was not alive then the entire transaction of sale in favour of Y is vitiated.
2. Nationalized bank has rightly sought the production of documentary proof which can vouchsafe that X was alive as on the date of sale. The bank is going to part with its money, so it is but natural that it will grant loan only after due diligence.
3. The indemnity clause is more often than not incorporated in the sale deed, but I hasten to add that it does not offer absolute protection as it is capable of being interpreted differently by the court. To recover your money you shall have to file a suit for recovery of money in the court, whereupon the seller will be issued a notice by the court and he will get an opportunity to rebut your case.