• Sale of land through power of attorney. Is it legal and safe?

Hi,
I am looking to sell a piece of land in Chennai. I have found buyers who want a power of attorney over the land and have agreed to pay the full price before I give them the power of attorney.
Their reasons for doing this is so they can build flats on this land. 
From my understanding of how this works, they want to avoid paying the stamp duty and registration fees by doing this. My questions are below:
1. Is this practice legal?
2. Is the money I receive considered to be black money? Because technically the land has not been sold and is still in my name. Also, will I be able to legally reinvest this money?
3. Since the land will still be in my name, what sort of legal complications, if any, can arise in due course of the construction of the flats?
4. If this process is legal and safe for me, what documents should I get from them to make sure I will not be held liable for anything that might occur?

Thank you in advance for your answers.
Regards.
Asked 2 years ago in Property Law from Germany
1. POA is perfectly legal provide you execute this in favour of any of your relatives who would sell the and on your behalf. Do not execute GPA in favour of buyers.
2. Do not do this. Only go for sale not GPA. In GPA you would remain responsible for any illegal acts which may occur in relation to that land.
3. As said earlier you being the Principal you would be held responsible for any illegalities.
4. This is not at all safe and I strongly recommend you not to go for this.
Devajyoti Barman
Advocate, Kolkata
5236 Answers
54 Consultations
4.9 on 5.0
1. POA is valid for transaction of sale/purchase of property in blood relations as usually in other than blood relation one has to to pay stamp duty and registration charges as per the value of the property. You can execute a POA before consulate of India in Germany. The POA should be authenticated at sub registrars office by POA holder. Execute GPA in favour of no one except any of your blood relatives. 

2. Do not sell the property through GPA as it will be illegal.  

3. Where the owner is residing abroad and therefore incapable to execute documents and hence the purpose of GPA is not considered as cancelled or not allowed so long GPA is registered and in favor of relative there wont be a problem.

4. The POA holder will be acting on your behalf. You will be liable for all his actions.
Ashish Davessar
Advocate, Jaipur
18167 Answers
449 Consultations
5.0 on 5.0
1) if buyers are willing to pay you full price it is in your interest to execute sale deed in favour of purchasers . 

2)Sc has held that in order to confer clear and marketable title to the property transfer should be by sale deed and not POA . 

3) it at all you have to execute POA it has to be in favour of a relative . 

4) POA would be for purpose of execution of sale deed on your behalf . POA has to be attested by the indian consulate in Germany . 

5)since land is in your name you would be responsible for acts of your agent in whose favour POA is executed . 

6) insist on stamped and registered  sale deed for selling your land .
Ajay Sethi
Advocate, Mumbai
23316 Answers
1220 Consultations
5.0 on 5.0
POA is a legal document he wants to save stamp duty and alienate this property to buyers on behalf of you after getting power of attorney. there is no legal hurdle in executing POA but you should prepare POA with consultation with any good lawyer. your earning will be treated as white money but you have to pay income tax on the income accrued on selling of flats and builder will get cuts and escape himself to pay stamp duty and income tax.
Shivendra Pratap Singh
Advocate, Lucknow
2760 Answers
41 Consultations
4.9 on 5.0
Hi, as far as you part is concerned you can sell the property after receiving the money thereafter  you can execute a power of attorney on that particular property but if the power of attorney is registered then they have to pay stamp duty as per market value and if the unregistered GPA they they are in trouble.

2. From the supreme court judgement if any one execute GPA or will to any body in order to avoid stamp duty such a transaction is not valid as per law and Supreme court has said like this.

Supreme Court of India
Suraj Lamp & Industries (P) ... vs State Of Haryana & Anr on 11 October, 2011
Author: R V Raveendran
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:
(a) An Agreement of sale by the vendor in favour of the purchaser confirming the
Suraj Lamp & Industries (P) ... vs State Of Haryana & Anr on 11 October, 2011
terms of sale, delivery of possession and payment of full consideration and
undertaking to execute any document as and when required in future.
Or An agreement of sale agreeing to sell the property, with a separate
affidavit confirming receipt of full price and delivery of possession and
undertaking to execute sale deed whenever required.
(b) An Irrevocable General Power of Attorney by the vendor in favour
of the purchaser or his nominee authorizing him to manage, deal with
and dispose of the property without reference to the vendor.
Or A General Power of Attorney by the vendor in favour of the
purchaser or his nominee authorizing the attorney holder to sell or
transfer the property and a Special Power of Attorney to manage the
property.
(c) A will bequeathing the property to the purchaser (as a safeguard
against the consequences of death of the vendor before transfer is
effected).
These transactions are not to be confused or equated with genuine transactions
where the owner of a property grants a power of Attorney in favour of a family
member or friend to manage or sell his property, as he is not able to manage the
property or execute the sale, personally. These are transactions, where a purchaser
pays the full price, but instead of getting a deed of conveyance gets a SA/GPA/WILL
as a mode of transfer, either at the instance of the vendor or at his own instance.
Ill-Effects of SA/GPA/WILL transactions
3. The earlier order dated 15.5.2009, noted the ill-effects of such SA/GPA/WILL
transactions (that is generation of black money, growth of land mafia and
criminalization of civil disputes) as under:
"Recourse to `SA/GPA/WILL' transactions is taken in regard to
freehold properties, even when there is no bar or prohibition
regarding transfer or conveyance of such property, by the following
categories of persons:
(a) Vendors with imperfect title who cannot or do not want to execute
registered deeds of conveyance.
(b) Purchasers who want to invest undisclosed wealth/income in
immovable properties without any public record of the transactions.
The process enables them to hold any number of properties without
Suraj Lamp & Industries (P) ... vs State Of Haryana & Anr on 11 October, 2011
disclosing them as assets held.
(c) Purchasers who want to avoid the payment of stamp duty and
registration charges either deliberately or on wrong advice. Persons
who deal in real estate resort to these methods to avoid multiple stamp
duties/registration fees so as to increase their profit margin.
Whatever be the intention, the consequences are disturbing and far
reaching, adversely affecting the economy, civil society and law and
order. Firstly, it enables large scale evasion of income tax, wealth tax,
stamp duty and registration fees thereby denying the benefit of such
revenue to the government and the public. Secondly, such transactions
enable persons with undisclosed wealth/income to invest their black
money and also earn profit/income, thereby encouraging circulation
of black money and corruption.
This kind of transactions has disastrous collateral effects also. For
example, when the market value increases, many vendors (who
effected power of attorney sales without registration) are tempted to
resell the property taking advantage of the fact that there is no
registered instrument or record in any public office thereby cheating
the purchaser. When the purchaser under such `power of attorney
sales' comes to know about the vendors action, he invariably tries to
take the help of musclemen to `sort out' the issue and protect his
rights. On the other hand, real estate mafia many a time purchase
properties which are already subject to power of attorney sale and
then threaten the previous `Power of Attorney Sale' purchasers from
asserting their rights. Either way, such power of attorney sales
indirectly lead to growth of real estate mafia and criminalization of
real estate transactions."
It also makes title verification and certification of title, which is an integral part of
orderly conduct of transactions relating to immovable property, difficult, if not
impossible, giving nightmares to bonafide purchasers wanting to own a property with
an assurance of good and marketable title.
4. This Court had therefore requested the learned Solicitor General to give
suggestions on behalf of Union of India. This Court also directed notice to States of
Delhi, Haryana, Punjab, Uttar Pradesh to give their views on the matter. The four
states have responded and confirmed that SA/GPA/WILL transfers required to be
discouraged as they lead to loss of revenue (stamp duty) and increase in litigations
due to defective title. They also referred to some measures taken in that behalf. The
measures differ from State to State.
Suraj Lamp & Industries (P) ... vs State Of Haryana & Anr on 11 October, 2011
In general, the measures are: (i) to amend Registration Act, 1908 by Amendment Act
48 of 2001 with effect from 24.9.2001 requiring documents containing contract to
transfer for consideration (agreements of sale etc.) relating to any immoveable
property for the purpose of section 53A of the Act, shall be registered; and (ii) to
amend the stamp laws subjecting agreements of sale with delivery of possession
and/or irrevocable powers of attorney in favour of non-family members authorizing
sale, to the same stamp duty as deed of conveyance. These measures, no doubt, to
some extent plugged the loss of revenue by way of stamp duty on account of parties
having recourse to SA/GPA/WILL transactions, instead of executing deeds of
conveyance. But the other ill-effects continued. Further such transaction which was
only prevalent in Delhi and the surrounding areas have started spreading to other
States also. Those with ulterior motives either to indulge in black money transactions
or land mafia continue to favour such transactions. There are also efforts to thwart
the amended provisions by not referring to delivery of possession in the agreement of
sale and giving a separate possession receipt or an affidavit confirming delivery of
possession and thereby avoiding the registration and stamp duty. The amendments
to stamp and registration laws do not address the larger issue of generation of black
money and operation of land mafia. The four States and the Union of India are
however unanimous that SA/GPA/WILL transactions should be curbed and
expressed their willingness to take remedial steps.
5. The State of Haryana has however taken a further positive step by reducing the
stamp duty on deeds of conveyance from 12.5% to 5%. A high rate of stamp duty acts
as a damper for execution of deeds of conveyance for full value, and encourages
SA/GPA/WILL transfers. When parties resort to SA/GPA/WILL transfers, the
adverse effect is not only loss of revenue (stamp duty and registration charges) but
the greater danger of generation of `black' money. Reducing the stamp duty on
conveyance to realistic levels will encourage public to disclose the maximum sale
value and have the sale deeds registered. Though the reduction of the stamp duty,
may result in an immediate reduction in the revenue by way of stamp duty, in the
long run it will be advantageous for two reasons: (i) parties will be encouraged to
execute registered deeds of conveyance/sale deeds without any under valuation,
instead of entering into SA/GPA/WILL transactions; and (ii) more and more sale
transactions will be done by way of duly registered sale deeds, disclosing the entire
sale consideration thereby reducing the generation of black money to a large extent.
When high stamp duty is prevalent, there is a tendency to undervalue documents,
even where sale deeds are executed.
When properties are undervalued, a large part of the sale price changes hand by way
of cash thereby generating `black' money. Even when the state governments take
action to prevent undervaluation, it only results in the recovery of deficit stamp duty
and registration charges with reference to the market value, but the actual sale
consideration remains unaltered. If a property worth `5 millions is sold for `2
millions, the Undervaluation Rules may enable the state government to initiate
Suraj Lamp & Industries (P) ... vs State Of Haryana & Anr on 11 October, 2011
proceedings so as to ensure that the deficit stamp duty and registration charges are
recovered in respect of the difference of `3 millions. But the sale price remains `2
millions and the black money of `3 millions generated by the undervalued sale
transaction, remains undisturbed.
6. In this background, we will examine the validity and legality of SA/GPA/WILL
transactions. We have heard learned Mr. Gopal Subramanian, Amicus Curiae and
noted the views of the Government of NCT of Delhi, Government of Haryana,
Government of Punjab and Government of Uttar Pradesh who have filed their
submissions in the form of affidavits.
Relevant Legal Provisions
7. Section 5 of the Transfer of Property Act, 1882 (`TP Act' for short) defines
`transfer of property' as under:
"5. Transfer of Property defined : In the following sections "transfer of
property" means an act by which a living person conveys property, in
present or in future, to one or more other living persons, or to himself
[or to himself] and one or more other living persons; and "to transfer
property" is to perform such act." xxx xxx Section 54 of the TP Act
defines `sales' thus:
"Sale" 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 immoveable
property of the value of one hundred rupees and upwards, or in the
case of a reversion or other intangible thing, can be made only by a
registered instrument.
In the case of tangible immoveable property of a value less than one
hundred rupees, such transfer may be made either by a registered
instrument or by delivery of the property.
Delivery of tangible immoveable property takes place when the seller
places the buyer, or such person as he directs, in possession of the
property.
Contract for sale.-A contract for the sale of immovable property is a
contract that a sale of such property shall take place on terms settled
between the parties.
It does not, of itself, create any interest in or charge on such property."
Suraj Lamp & Industries (P) ... vs State Of Haryana & Anr on 11 October, 2011
Section 53A of the TP Act defines `part performance' thus :
"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 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."
8. We may next refer to the relevant provisions of the Indian Stamp Act, 1999 (Note :
Stamp Laws may vary from state to state, though generally the provisions may be
similar). Section 27 of the Indian Stamp Act, 1899 casts upon the party, liable to pay
stamp duty, an obligation to set forth in the instrument all facts and circumstances
which affect the chargeability of duty on that instrument. Article 23 prescribes stamp
duty on `Conveyance'. In many States appropriate amendments have been made
whereby agreements of sale acknowledging delivery of possession or power of
Attorney authorizes the attorney to `sell any immovable property are charged with
the same duty as leviable on conveyance.
9. Section 17 of the Registration Act, 1908 which makes a deed of conveyance compulsorily
registrable. We extract below the relevant portions of section 17.
"Section 17 - Documents of which registration is compulsory- (1) The following
documents shall be registered, namely:--
xxxxx
(b) other non-testamentary instruments which purport or operate to create, declare,
assign, limit or extinguish, whether in present or in future, any right, title or interest,
whether vested or contingent, of the value of one hundred rupees and upwards, to or
in immovable property.
Suraj Lamp & Industries (P) ... vs State Of Haryana & Anr on 11 October, 2011
(1A) The documents containing contracts to transfer for consideration, any
immovable property for the purpose of section 53A of the Transfer of Property Act,
1882 (4 of 1882) shall be registered if they have been executed on or after the
commencement of the Registration and Other Related laws (Amendment) Act, 2001
and if such documents are not registered on or after such commencement, then, they
shall have no effect for the purposes of the said section 53A.
Advantages of Registration
10. In the earlier order dated 15.5.2009, the objects and benefits of registration were explained and
we extract them for ready reference :
"The Registration Act, 1908, was enacted with the intention of providing orderliness,
discipline and public notice in regard to transactions relating to immovable property
and protection from fraud and forgery of documents of transfer. This is achieved by
requiring compulsory registration of certain types of documents and providing for
consequences of non-registration.
Section 17 of the Registration Act clearly provides that any document (other than
testamentary instruments) which purports or operates to create, declare, assign, limit
or extinguish whether in present or in future "any right, title or interest" whether
vested or contingent of the value of Rs. 100 and upwards to or in immovable
property.
Section 49 of the said Act provides that no document required by Section 17 to be
registered shall, affect any immovable property comprised therein or received as
evidence of any transaction affected such property, unless it has been registered.
Registration of a document gives notice to the world that such a document has been
executed. Registration provides safety and security to transactions relating to
immovable property, even if the document is lost or destroyed. It gives publicity and
public exposure to documents thereby preventing forgeries and frauds in regard to
transactions and execution of documents. Registration provides information to
people who may deal with a property, as to the nature and extent of the rights which
persons may have, affecting that property. In other words, it enables people to find
out whether any particular property with which they are concerned, has been
subjected to any legal obligation or liability and who is or are the person/s presently
having right, title, and interest in the property. It gives solemnity of form and
perpetuate documents which are of legal importance or relevance by recording them,
where people may see the record and enquire and ascertain what the particulars are
and as far as land is concerned what obligations exist with regard to them. It ensures
that every person dealing with immovable property can rely with confidence upon the
statements contained in the registers (maintained under the said Act) as a full and
complete account of all transactions by which the title to the property may be affected
and secure extracts/copies duly certified."
Suraj Lamp & Industries (P) ... vs State Of Haryana & Anr on 11 October, 2011
Registration of documents makes the process of verification and certification of title easier and
simpler. It reduces disputes and litigations to a large extent.
Scope of an Agreement of sale
11. Section 54 of TP Act makes it clear that a contract of sale, that is, an agreement of sale does not,
of itself, create any interest in or charge on such property. This Court in Narandas Karsondas v. S.A.
Kamtam and Anr.
(1977) 3 SCC 247, observed:
A contract of sale does not of itself create any interest in, or charge on, the property.
This is expressly declared in Section 54 of the Transfer of Property Act. See
Rambaran Prosad v. Ram Mohit Hazra [1967]1 SCR
293. The fiduciary character of the personal obligation created by a contract for sale
is recognised in Section 3 of the Specific Relief Act, 1963, and in Section 91 of the
Trusts Act. The personal obligation created by a contract of sale is described in
Section 40 of the Transfer of Property Act as an obligation arising out of contract and
annexed to the ownership of property, but not amounting to an interest or easement
therein." In India, the word `transfer' is defined with reference to the word `convey'.
The word `conveys' in section 5 of Transfer of Property Act is used in the wider sense
of conveying ownership... ...that only on execution of conveyance ownership passes
from one party to another...."
In Rambhau Namdeo Gajre v. Narayan Bapuji Dhotra [2004 (8) SCC 614] this Court held:
"Protection provided under Section 53A of the Act to the proposed transferee is a
shield only against the transferor. It disentitles the transferor from disturbing the
possession of the proposed transferee who is put in possession in pursuance to such
an agreement. It has nothing to do with the ownership of the proposed transferor
who remains full owner of the property till it is legally conveyed by executing a
registered sale deed in favour of the transferee. Such a right to protect possession
against the proposed vendor cannot be pressed in service against a third party."
It is thus clear that a transfer of immoveable property by way of sale can only be by a deed of
conveyance (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 immoveable property can be transferred.
12. Any contract of sale (agreement to sell) which is not a registered deed of conveyance (deed of
sale) would fall short of the requirements of sections 54 and 55 of TP Act and will not confer any title
nor transfer any interest in an immovable property (except to the limited right granted under
section 53A of TP Act). According to TP Act, an agreement of sale, whether with possession or
without possession, is not a conveyance. Section 54 of TP Act enacts that sale of immoveable
Suraj Lamp & Industries (P) ... vs State Of Haryana & Anr on 11 October, 2011
property can be made only by a registered instrument and an agreement of sale does not create any
interest or charge on its subject matter.
Scope of Power of Attorney
13. A power of attorney is not an instrument of transfer in regard to any right, title or interest in an
immovable property. The power of attorney is creation of an agency whereby the grantor authorizes
the grantee to do the acts specified therein, on behalf of grantor, which when executed will be
binding on the grantor as if done by him (see section 1A and section 2 of the Powers of Attorney Act,
1882). It is revocable or terminable at any time unless it is made irrevocable in a manner known to
law. Even an irrevocable attorney does not have the effect of transferring title to the grantee. In State
of Rajasthan vs. Basant Nehata - 2005 (12) SCC 77, this Court held :
"A grant of power of attorney is essentially governed by Chapter X of the Contract
Act. By reason of a deed of power of attorney, an agent is formally appointed to act
for the principal in one transaction or a series of transactions or to manage the affairs
of the principal generally conferring necessary authority upon another person. A deed
of power of attorney is executed by the principal in favour of the agent. The agent
derives a right to use his name and all acts, deeds and things done by him and subject
to the limitations contained in the said deed, the same shall be read as if done by the
donor. A power of attorney is, as is well known, a document of convenience.
Execution of a power of attorney in terms of the provisions of the Contract Act as also
the Powers-of-Attorney Act is valid. A power of attorney, we have noticed
hereinbefore, is executed by the donor so as to enable the donee to act on his behalf.
Except in cases where power of attorney is coupled with interest, it is revocable. The
donee in exercise of his power under such power of attorney only acts in place of the
donor subject of course to the powers granted to him by reason thereof. He cannot
use the power of attorney for his own benefit. He acts in a fiduciary capacity. Any act
of infidelity or breach of trust is a matter between the donor and the donee."
An attorney holder may however execute a deed of conveyance in exercise of the power granted
under the power of attorney and convey title on behalf of the grantor.
Scope of Will
14. A will is the testament of the testator. It is a posthumous disposition of the estate of the testator
directing distribution of his estate upon his death. It is not a transfer inter vivos. The two essential
characteristics of a will are that it is intended to come into effect only after the death of the testator
and is revocable at any time during the life time of the testator. It is said that so long as the testator
is alive, a will is not be worth the paper on which it is written, as the testator can at any time revoke
it. If the testator, who is not married, marries after making the will, by operation of law, the will
stands revoked. (see sections 69 and 70 of Indian Succession Act, 1925).
Suraj Lamp & Industries (P) ... vs State Of Haryana & Anr on 11 October, 2011
Registration of a will does not make it any more effective.
Conclusion
15. Therefore, a SA/GPA/WILL transaction does not convey any title nor create any interest in an
immovable property. The observations by the Delhi High Court, in Asha M. Jain v. Canara Bank - 94
(2001) DLT 841, that the "concept of power of attorney sales have been recognized as a mode of
transaction" when dealing with transactions by way of SA/GPA/WILL are unwarranted and not
justified, unintendedly misleading the general public into thinking that SA/GPA/WILL transactions
are some kind of a recognized or accepted mode of transfer and that it can be a valid substitute for a
sale deed. Such decisions to the extent they recognize or accept SA/GPA/WILL transactions as
concluded transfers, as contrasted from an agreement to transfer, are not good law.
16. We therefore reiterate that 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 or valid mode of transfer of immoveable
property. The courts will not treat such transactions as completed or concluded transfers or as
conveyances as they neither convey title nor create any interest in an immovable property.
They cannot be recognized as deeds of title, except to the limited extent of section 53A of the TP Act.
Such transactions cannot be relied upon or made the basis for mutations in Municipal or Revenue
Records. What is stated above will apply not only to deeds of conveyance in regard to freehold
property but also to transfer of leasehold property. A lease can be validly transferred only under a
registered Assignment of Lease. It is time that an end is put to the pernicious practice of
SA/GPA/WILL transactions known as GPA sales.
17. It has been submitted that making declaration that GPA sales and SA/GPA/WILL transfers are
not legally valid modes of transfer is likely to create hardship to a large number of persons who have
entered into such transactions and they should be given sufficient time to regularize the transactions
by obtaining deeds of conveyance. It is also submitted that this decision should be made applicable
prospectively to avoid hardship.
18. We have merely drawn attention to and reiterated the well-settled legal position 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.
Nothing prevents affected parties from getting registered Deeds of Conveyance to complete their
title. The said `SA/GPA/WILL transactions' may also be used to obtain specific performance or to
defend possession under section 53A of TP Act. If they are entered before this day, they may be
relied upon to apply for regularization of allotments/leases by Development Authorities. We make it
clear that if the documents relating to `SA/GPA/WILL transactions' has been accepted acted upon
Suraj Lamp & Industries (P) ... vs State Of Haryana & Anr on 11 October, 2011
by DDA or other developmental authorities or by the Municipal or revenue authorities to effect
mutation, they need not be disturbed, merely on account of this decision.
19. We make it clear that our observations are not intended to in any way 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. A person may enter into a development agreement with a
land developer or builder for developing the land either by forming plots or by constructing
apartment buildings and in that behalf execute an agreement of sale and grant a Power of Attorney
empowering the developer to execute agreements of sale or conveyances in regard to individual
plots of land or undivided shares in the land relating to apartments in favour of prospective
purchasers. In several States, the execution of such development agreements and powers of attorney
are already regulated by law and subjected to specific stamp duty. Our observations regarding
`SA/GPA/WILL transactions' are not intended to apply to such bonafide/genuine transactions.
20. We place on record our appreciation for the assistance rendered by Mr. Gopal Subramaniun,
Senior Counsel, initially as Solicitor General and later as Amicus Curiae.
21. As the issue relating to validity of SA/GPA/WILL has been dealt with by this order, what remains
is the consideration of the special leave petition on its merits. List the special leave petition for final
disposal.
.................................J (R. V. Raveendran) .................................J (A. K. Patnaik) .................................J
(H. L. Gokhale) New Delhi;
October 11, 2011.
Pradeep Bharathipura
Advocate, Bangalore
4105 Answers
133 Consultations
4.3 on 5.0
1. No. It is no more legal after the order passed by the Apex Court in connection with the case being Suraj Lamp & Industries (P) ... vs State Of Haryana & Anr. It has been so ordered primarily to arrest the loss of revenue,

2.  Yes, it will become black money in your hand,

3. You shall be responsible for paying tax and if any labour dies in your site while conducting construction arranged by the POA holder, you will not be able to shrug of your responsibility,

4. Sale through POA  holder not having any blood relationship is invalid. No document will make the POA valid and legal.
Krishna Kishore Ganguly
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