• Irrevocable GPA executed for consideration - section 202 of Indian Contract Act

A, B, C, D ,E......20 members in total executed irrevocable GPA infavour of Z for 
 valid sale consideration. Z also holds agreement of sale in his favour pertaining to immovable property.

after 10 years

10 of the executants expired.... what are the Implications ?
**sec 202 of Indian contract act says irrevocable GPA cannot be cancelled as it is executed for consideration.
can Z sell the property using the irrevocable GPA-- ?
is the GPA binding on LR's of dead executants -- ?
will limitation kill the Irrevocable GPA -- ?
without any doubt agreement of sale will be hit by limitation....
Asked 4 years ago in Property Law
Religion: Hindu

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30 Answers

POA does not cease on death of principal as it is coupled with consideration

2) POA is binding on legal heirs of the executants

3) Z can sell property based on irrevocable POA

Ajay Sethi
Advocate, Mumbai
87895 Answers
6207 Consultations

5.0 on 5.0

1. POA is coupled with interest does not relinquish even on death of the principal. So it is binding on the legal heirs of the principals who have died.

2. The term revocable or irrevocable does not alone determine the nature or character of the deed but its contents will.

3. So if the GPA was executed even on death of few of the principals the actions would not become invalid and is binding on the parties concerned.

Devajyoti Barman
Advocate, Kolkata
22515 Answers
402 Consultations

5.0 on 5.0

1. In such cases, it is generally mentioned in the irrevocable GPA that in case of demise of any executor of the said GPA, the terms mentioned will be binding on his/her legal heirs of the said deceased executor and the GPA.stay as valid.

2. In the above case the said GPA will be binding on the legal haiers of the demised Executors of the GPA.

3. The GPA holder being Z can act based upon the said GPA as per law.

4. The said GPA will stay valid for 12 years unless renewed by the other executors and legal heirs of the demised executors.

Krishna Kishore Ganguly
Advocate, Kolkata
26602 Answers
726 Consultations

5.0 on 5.0

Which limitation are you talking about?

Suit for declaration is to be filed within 3 years and within 12 years.

Devajyoti Barman
Advocate, Kolkata
22515 Answers
402 Consultations

5.0 on 5.0

1. Agency coupled with interest is not affected by the death of the grantor.

2. So even if some of the grantors die, the gpa will still hold the field.

3. Actually since consideration has passed through the gpa, it can be taken as a sale deed itself. Though such practice was essentially done to evade payment of stamp duty on the sale deed.

4. Since the gpa is against consideration, the legal heirs of the deceased grantors will be bound by it.

5. Also there is no liability or grievance which needs to be addressed by taking a legal action for which law has prescribed a limitation period. In your case, the property is sold against consideration by executing a gpa plus sale deed, which is essentially a sale of immoveable property. But there are chances that few grantors may later on decide to challenge the gpa on the ground that it's not a sale since there is no registered sale deed. But law estops such claims since consideration had passed and also the time for challenging the gpa has also lapsed.

6. Coming to right of Z to sell the property - the buyer can issue a public notice in newspapers inviting objections against the sale of the property for which the seller has a gpa against consideration. That can be his due diligence. If there is any objection received from any of the grantors or legal heirs of deceased grantors then seller will have to clear and nullify such claims by resorting to aforesaid advice ie gpa is against consideration, since consideration received, it's essentially a sale and agency coupled with interest binds legal heirs of grantors.

7. I shall read on the query more and come back.

Yusuf Rampurawala
Advocate, Mumbai
6876 Answers
79 Consultations

5.0 on 5.0

8. Kindly inform if stamp duty was paid on either the gpa or sale deed in favour of Z.

9. If not, then when Z sells the property and lodges the sale deed with the collector of stamps for calculating the stamp duty payable on the sale, the collector may require you to pay the deficit stamp duty plus interest on the previous sale in favour of Z.

Yusuf Rampurawala
Advocate, Mumbai
6876 Answers
79 Consultations

5.0 on 5.0

There is absolutely no such provision in law.

A GPA can only be relinquished by operation of law or by acts of parties. There is no automatic expiry of it after a certain point of time.

Devajyoti Barman
Advocate, Kolkata
22515 Answers
402 Consultations

5.0 on 5.0

Since it's irrevocable, meaning, once given it can't be revoked and is thus granted for life, then I don't see any reason why it needs to be renewed every 12 years. Had it been required to be renewed every 12 years, then it cannot be termed as irrevocable. As after expiry of 12 years, the gpa would stand automatically revoked. So this proposition does not fit well with the idea behind the term 'irrevocable'.

But nevertheless I will check and revert

The above understanding is based on logic and common sense and law is all about common sense. Then too I shall cross check

Yusuf Rampurawala
Advocate, Mumbai
6876 Answers
79 Consultations

5.0 on 5.0

Generally speaking, a power of attorney can be terminated or cancelled by the principal by revoking his authority or by the power of attorney holder renouncing his authority.According to S. 201 of the Contract Act, an agency can be terminated by the principal by revoking his authority or by the agent renouncing his authority, unless such revocation is prohibited under S. 202 of the Contract Act . S. 201 of the Contract Act also states that an agency terminates, inter alia, by death of principal or agent.

S. 202 of the Contract Act lays down the rule that an authority coupled with interest is irrevocable. S. 202 of the Contract Act states that "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 authority of an agent is given by deed, or for valuable consideration, for the purpose of effectuating any security, or of protecting or securing any interest of the agent, it is irrevocable during the subsistence of such security or interest.To make the authority irrevocable, the agent must have an interest in the property which forms the subject matter of the agency. 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 any express contract, be terminated to the prejudice of such interest.The mere fact that a power is declared in the instrument granting it to be irrevocable, does not make it irrevocable.

Sale agreement is barred by limitation since the execution of registered sale deed to be made within three years from the execution of sale agreement.

T Kalaiselvan
Advocate, Vellore
78050 Answers
1543 Consultations

5.0 on 5.0

THANKS KAANOON TEAM ....WONDERFUL WAY OF SHARING VIEWS AND KNOWLEDGE...I DEEPLY APPRECIATE THE SERVICE AND THE LEGAL FRATERNITY PARTICIPATING. ESPECIALLY BIG THANKS TO ALL SENIOR LAWYERS SPARING THEIR TIME. GREAT OPPORTUNITY TO BUDDING TALENT AND STUDENTS.

You are welcome for your appreciations.

T Kalaiselvan
Advocate, Vellore
78050 Answers
1543 Consultations

5.0 on 5.0

12 yrs validity is applicable to all states in India, or is there separate provision for individual states ?

Article 54 of the Limitation Act, 1963 (36 of 1963) reads as follows: “For Specific performance of a contract: Three years The date fixed for the performance, or, if no such date is fixed, when the plaintiff has notice that performance is refused.”= the apex Court in Ahmmadsahb Abdul Mila vs. Bibijan[1], wherein it was held that the date fixed for the performance of the contract should be a specified date in the calendar, and submitted that since no specified date in the calendar for performance of the contract is mentioned in the agreement of sale, the second limb of Article 54 of the Limitation Act is applicable. ; whether the suit is barred by limitation or not becomes a tribal issue and when there is a tribal issue, the lower Court ought not to have rejected the plaint at the threshold.

The right to defend possession to a vendee is available so long as the period of limitation prescribed by law for its enforcement continues and it comes to an end as soon as the period of limitation expires.

T Kalaiselvan
Advocate, Vellore
78050 Answers
1543 Consultations

5.0 on 5.0

does GPA needs to be renewed every 12 yrs ?

is there any statute or rule to this effect ?

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. *

Except in cases where power of attorney is coupled with interest, it is revocable.

Generally, a POA remains in force unless it is expressly revoked or determined by the death of the either party (grantor/principal or agent/attorney holder).

Duration of power also depends on the type of the attorney or there may be fixed period of time granted by the grantor to the agent to perform the particular act.

T Kalaiselvan
Advocate, Vellore
78050 Answers
1543 Consultations

5.0 on 5.0

thanks for your appreciation

Ajay Sethi
Advocate, Mumbai
87895 Answers
6207 Consultations

5.0 on 5.0

A general power of attorney remains in force unless expressly revoked or determined by the death of either of the party. A special power of attorney will be in force until the specified act is not completed. Duration of the power will depend upon the type of the attorney or there may be a fixed period of power granted by the principal which must be included in the deed.

2) not aware of any such rule that POA has to be renewed every 12 years

Ajay Sethi
Advocate, Mumbai
87895 Answers
6207 Consultations

5.0 on 5.0

not aware of any such rule that POA has to be renewed every 12 years

when POA is coupled with consideration and it is irrevocable no question of its renewal after 12 years

Ajay Sethi
Advocate, Mumbai
87895 Answers
6207 Consultations

5.0 on 5.0

with so many replies, the query seems to be resolved.

Ganesh Singh
Advocate, New Delhi
6646 Answers
16 Consultations

4.5 on 5.0

Dear Client,

GPA is binding on legal heirs, GPA is executed to evade stamp duty if sale deed executed.

On the basis of GPA sale is valid and exemption of 3 % stamp duty on registration of sale deed.

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

Supreme court has recently barred the sale of property through GPA. It has to be seen that view taken by Supreme court is applicable in your case.

Prashant Nayak
Advocate, Mumbai
27224 Answers
88 Consultations

4.4 on 5.0

We stay updated with the problems of the society by answering various questions we receive in this portal.

Krishna Kishore Ganguly
Advocate, Kolkata
26602 Answers
726 Consultations

5.0 on 5.0

1.Ordinarily any document or agreement has a limitation which is generally for 12 years in most of the cases.

.2. However, you need to be aware of the supreme court judgment passed in the year 2012 in case of Surya Lamps & Electrics .....Vs.......The State of Haryana where sale through POA without paying the stamp duty has been barred all over India excepting the State of Jammu & Kashmir.

3. So, if the said POA is for sale only, then the POA holder might face problem now for selling the said property based on the said POA issued to him.

Krishna Kishore Ganguly
Advocate, Kolkata
26602 Answers
726 Consultations

5.0 on 5.0

1. Actually your problem has now been shifted from the period of limitation to the validity of sale made through POA issued to non blood related person.

2. The stated order has been passed by the Supreme Court to stop evasion of payment of stamp duty and registration fee by selling through POA.

3. So, try to get the sale deed of the property registered in your name or get the sale deed registered in favour of your buyer directly through the title holders of the property wherein you can sign as the consenting party.

Krishna Kishore Ganguly
Advocate, Kolkata
26602 Answers
726 Consultations

5.0 on 5.0

Dear Sir,

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

202. 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 = of govt of Tamil Nadu please check in Telagana State, if rules changed

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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.

Last December, the department made it mandatory that photographs of the holder and the principal be

Kishan Dutt Kalaskar
Advocate, Bangalore
6050 Answers
381 Consultations

4.8 on 5.0

After supreme court has come down heavily on the practice of owning the property on the basis of POA, no states in India is daring to accord permission for ownership by POA and it is not even recognised as title.

POA deed coupled with interest is irrevocable but it cannot confer title to the power agent.

The sale agreement is a different subject.

With regard to the stamp duty and the concessions given theron by the government of Telangana, you just clarify and confirm the actual status in this regard from the registrar's office

T Kalaiselvan
Advocate, Vellore
78050 Answers
1543 Consultations

5.0 on 5.0

SC has held that to confer clear and marketable title sale has to be done through sale deed

2) Sale by POA does not confer title to property

3) it is better that sale deed be executed fir sale of property

Ajay Sethi
Advocate, Mumbai
87895 Answers
6207 Consultations

5.0 on 5.0

the amendments if any to the contract can be only made by Parliament

2)If petitioner had purchased the property under a registered sale deed, numerous disputes, litigations and criminal proceedings could have been avoided.

3)There cannot be a transfer by execution of a power of attorney and will. 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 invest unaccounted money (`black money’)

4)Transactions done on the basis of Power of Attorney sales cannot be recognized as valid mode of transfer of immovable but 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 in the exceptional case.

Ajay Sethi
Advocate, Mumbai
87895 Answers
6207 Consultations

5.0 on 5.0

These are your ideas.

\Whereas ther is a provision of law which is to be followed.

The law may appear to be lopsided for you but in general it is common for all hence you cannot dispute the provisions of law but may interpret the same in your favor using the loopholes in it.

Intelligence lies there, that is by utilizing the situation in your favor instead of agitating over the worthless issues.

T Kalaiselvan
Advocate, Vellore
78050 Answers
1543 Consultations

5.0 on 5.0

SC order of October 2011 dose not mean absolute bar on POA but property holders can "regularize" the sale/conveyance by paying the difference in the stamp duty.

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

1. The concerned Advocates of M/s Surya lamps and Electric had argued strongly against the prayer of the The State of Haryana while the Apex court had heard the matter.

2. The order has been passed by the supreme court and unless it is repealed, we shall have to follow the order of the Supreme Court in case of considering the sale of immovable through GPA/POA as invalid.

Krishna Kishore Ganguly
Advocate, Kolkata
26602 Answers
726 Consultations

5.0 on 5.0

1. Yes, I also think that a remedial measure should have been planned and implemented before making a blanket ban on sale of immovable properties through GPA/POA.

2. There are thousands of such GPA/POA holders in India who, without knowing about the said Supreme Court order, still opting for transacting through irrevocable GPA/POA.

Krishna Kishore Ganguly
Advocate, Kolkata
26602 Answers
726 Consultations

5.0 on 5.0

That is matter of new legislation which can't be hypothetically discussed here. But it is important to bring both sides on record therefore litigation can't be avoided in such cases.

Prashant Nayak
Advocate, Mumbai
27224 Answers
88 Consultations

4.4 on 5.0

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