We want to buy an agriculture land in karnataka . As we donot have RTC, we have applied for DC approval under Section 80. As the approval is getting delayed, the owner is ready to register a GPA forfeiting his right of the land and will get signatures of all his family members. I spoke to Sub -registrar who mentioned that this is possible and once the approval comes, we can register officially at later date and during the final registration the current owner need not come. Question : Is it Ok and safe to go through the GPA route. After registering the GPA does the owner can come back later or create any issue ?
1) what if application for Dc approval is rejected ?
2)if application for approval is granted then registered GPA can help you in transferring land in your name
3)dont go in through the GPA route . seller can revoke the GPA unless it is coupled with consideration
Thanks Sir, I have applied with all documents which are required as per section 80 . I did not understand the third question of consideration ? Can you please eloborate
i advised you not to go in through the GPA route as seller might revoke the GPA in future .
2) litigation is long drawn and expensive proposition
1. Please note that GPA for the purpose of transfer of immovable proeprty is not valid if made in favour of a person who is not a close relative of the Principal. This is in light of the supreme court decision passed in Sooraj Lamp case.
2. So do not take any GPA route. Whenever you purchase you do so through a registered deed of conveyance only from the original owner of the kand.
3.If the owner is ready to release his share then ask him to do so through registered deed of relinquishment only.
The SC in suraj lamps has held that SA/GPA/WILL transactions are not `transfers' or `sales' and that such transactions cannot be treated as completed transfers or conveyances. They can continue to be treated as existing agreement of sale. 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.
Therefore, advisable to execute a sale deed instead of power of attorney.
Buying a property under GPA mode has come down heavily by supreme court.
“When someone transfers any immovable property through GPA, it does not convey any rights or title or create any interest in respect of such immovable property in favor of such person as only a deed of conveyance/sale deed which is duly stamped under the provisions of the Stamp Act applicable to the state in which such property is situated, as well as registered under the provisions of the Registration Act, does so”,
In cases where a sale deed cannot be carried out due to various issues for buyers and sellers, a power of attorney can be put to great use.
The law is that even if the parties have determined that the GPA is irrevocable it won’t have the effect of transferring title to the grantee.
Section 54 of the TPA defines sales thus: Sales is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.
Sale how made: Such transfer, in the case of tangible immovable property of the value of one hundred rupees or upwards or in the case of reversion or other intangible thing can be made only by a registered instrument.
judgment of the Honble supreme court states that the legal position is that the sale agreement/General power of attorney or Will transactions are not transfers or sales and that such transactions cannot be treated as completed transfers or conveyances. But they can still be treated as existing agreement of sale. Nothing prevents affected parties from getting registered deeds of conveyance to complete their title.
You can make a judicious decision because the GPA can be revoked for various reasons, including on death of the principal.
I have applied with all documents which are required as per section 80 . I did not understand the third question of consideration ? Can you please eloborate
Consideration means sale consideration amount for this purchase.
Sir, In case GPA has the following words will it help We have received full consideration on the sale of the land and there is no pending amount. We will henceforth relinquish our right on the land mentioned in the schedule . This GPA will not be irrevocable and with happiness and trust give all our rights on this land to you and registering this GPA. We understand that you have applied for DC approval under Section 80 . Once the approval is granted we have no objection to you to register the land in your name without freely without our involvement as we have given all our right on this land. In case DC approval is delayed , you can sell this land to anyone without our objection.
GPA coupled with consideration cannot be revoked
2) in present case since full consideration has been received by the principal he cannot revoke the GPA
3) it is better to wait till DC approval is received
This GPA will not be irrevocable :- Correction "This GPA will not be revoked under any circumstances".
The POA is not an instrument of transfer. It creates agency. Even an irrevocable attorney does not have the effect of transferring the title to the grantee. An attorney holder may execute a deed of conveyance.
Except in cases, where POA is coupled with interest, it is revocable.
SC has at last held in suraj lamps case that immovable property can be legally and lawfully transferred/conveyed only by a registered deed of conveyance.
Therefore, advisable, if you can wait and execute a deed of conveyance to avoid future litigation.
In light of the judgment of the Suraj Lamp any transfer made through GPA is not valid until and unless the GPA is given to a close relative.
If you have received the consideration then the same becomes irrevocable. I would advise you to wait for the DC approval.
Regards
The GPA cannot be worded with the contents what you have mentioned because it is a power given to the agent for selling the property and to give the sale consideration amount to the principal after selling the property.
The GPA in this regard cannot be irrevocable under this situation . Hence you cannot have an endorsement this way.
The last endorsement can also not form the recital of GPA.
All these issues can be made as conditions in the sale agreement alone and not in the GPA deed.
A GPA can be drafted in its own sense and meaning only.
You may consult an advocate in the local to draft a proper GPA based on the circumstance
Hi
Yes it's safe to go via the route of GPA but please check that the GPA should contain all the ingredients to transfer all the rights to the person in whose name the attorney is being made without any limit of time
Thank You
Dear Sir,
GPA SALES ARE BANNED.. Please see following news item:
No property sale on power of attorney: Supreme Court
The court rules that transfer through general power of attorney cannot give ownesrship title to the buyer.
Gyanant Singh
New Delhi, October 13, 2011 | UPDATED 12:11 IST
A +A -
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 immovable property 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.
Navin Raheja, chairman and managing director of Raheja Developers said, "The court's decision will help to curb the circulation of black money to some extent in the real estate sector where titles are manipulated. Besides, many property transactions where prices are rounded off will be affected. However, overall there won't be any significant impact on normal property sales."
The apex court said there can be no mutation of property in municipal and revenue records on the basis of such documents. The bench, however, clarified that its order should not be a ground for disturbing mutations already effected by the Delhi Development Authority (DDA) or any other authority.
But, there is little relief for thousands of people who hold property without mutation as GPA sales can only be treated as existing sale agreements. An application of the order with prospective effect would have protected their interest. The court, though, stressed that it had merely reiterated the well- settled legal position that such transactions cannot be treated as completed transfers.
The court could not make the order applicable with prospective effect as it had not laid down any new law. However, it said that those who had already bought property through GPA before its judgment could use the documents to apply for regularisation of allotments and leases by development authorities.
"Nothing prevents affected parties from getting registered deeds of conveyance to complete their title. The said transactions may also be used to obtain specific performance or to defend possession under section 53A of TP (Transfer of Property) Act," the court said.
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.
While hearing a matter on the subject, the court had decided to clarify the law on the issue as such transfers had not only led to evasion of stamp duty and registration charges but had also provided scope for investing black money in real estate. Besides, such transfers were giving nightmares to bona fide purchasers as the same property could be sold to several people in the absence of verification or certification of title. A proper verification of ownership was possible only if all property were transferred through registered sale deeds.
Noting that such transactions were now not just limited to Delhi but had spread to neighbouring areas, the court had sought the views of the Centre and the states of Delhi, Haryana, Punjab and Uttar Pradesh. There was a near unanimity that such transactions should be discouraged as it caused loss of revenue and increased litigation due to defective titles.
Going into the legality of such transfers, the court said any contract of sale which was not a registered sale deed would fall short of the requirements of the relevant provisions of the Transfer of Property Act and could not confer any title.
The court said a transfer of property by way of sale could only be by a sale deed. "In the absence of a deed of conveyance (duly stamped and registered as required by law), no right, title or interest in an immovable property can be transferred," the bench said.
No general power of attorney once registered is a valid way. He can't again come and trouble you. Prepare a irrevocable GPA.
