We are a employees welfare society holding about 2 acre of land in the form of Agreement of Sale Cum GPA and the same is about 18 years old. When we tried to give to a company for construction apartments, they said the Society being a GPA holder can not give further GPA and need to convert into a sale deed by executing a self deed. We are not sure now, whether the original Vendor is alive or not. In case the original vendor is not alive now, do we still have the rights to do a registration to ourselves or to third party? No doubt, we have the title rights under agreement of sale, the doubt is about GPA rights?
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It is an Irrevocable GPA
1. Find out whether the original vendor is alive or not. If the vendor is not alive, find out the legal heirs of the vendor and request them to execute the sale deed in favour of the employees' welfare society, in lieu of the original vendor's Agreement of sale cum GPA.
2. As per SC's 2011 order 'Transfer of property cannot be effected through GPA'
1) you have been rightly advised that GPA holder cannot execute further GPA
2) on demise of principal power of attorney ceases unless it is coupled with consideration
3) on basis of GPA sale deed can be executed by the society
4) contact a local lawyer . The agreement for sale and GPA have to be perused for further advice
As per the AGPA, a balance amount of 18000/- is due to the Vendor and is to be paid at the time of registering the Plots to the Members of the Welfare Society. Will this information change your answer under point (2), Mr. Ajay Sethi?
1) it appears POA is coupled with consideration .
2) Section 202 of the Contract Act, 1872 provides that the Power of Attorney coupled with interest is irrevocable and cannot be revoked/terminated even upon the death of the principal. Section 202 of the Contract Act is reproduced hereunder:-
"SECTION 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.
3) In Harbans Singh v. Shanti Devi, 1977 RLR 487, the seller had executed an agreement to sell in favour of the purchaser and the General Power of Attorney in favour of her husband. The General Power of Attorney was stated to be irrevocable and it authorized the attorney to further sell the subject property. The seller later cancelled the agreement to sell and all other documents including the General Power of Attorney. The Trial Court held the General Power of Attorney to be irrevocable which was challenged in appeal before this Court. The Division Bench of this Court held that the General Power of Attorney was executed for a valuable consideration and the agent had an interest in the property and, therefore, the General Power of Attorney was irrevocable.
4) In Suraj Lamp and Industries Private Limited v. State of Haryana, 183 (2011) DLT 1 (SC), the Supreme Court held that General Power of Attorney transactions do not convey any title or interest in an immovable property except to the extent of limited rights granted under Section 53A of the Transfer of Property Act, 1882 and Section 202 of the Contract Act, 1872. The Supreme Court held that General Power of Attorney transactions cannot be treated as complete transfer but they can be treated as existing agreement of sale and the attorney holder can execute the deed of conveyance in exercise of the power granted
5) on basis of GPA sale deed can be executed by the society
Thank you Ajay. Does this mean, as per sec 202 that you refer, the Registrar can allow the Society - the GPA Holder, to execute the Sale Deed, either to itself or to a third party, even in case the Vendor is not alive? Or the Vendors legal heirs will come into picture - to receive the balance consideration and execute the sale deed?
1) you can execute sale deed in favour of third party if it is an irrevocable power of attorney coupled with consideration
2) you have to pay balance amount of Rs 18000 to the vendors or his legal heirs .
1. Here the GPA holder is the society. The society is not required to execute a further GPA. If the GPA in favour of the society expressly contains the power to make a sale then it can go ahead and execute a sale deed. The power of the society flows out of the GPA alone.
2. The society need not trace out the original vendor for the registration purpose as it can on its own carry out the registration if authorized by the GPA.
1. If the GPA does not contain the authority to execute the sale deed then the sale deed can be executed by only the original vendor or his legal heirs who have to be traced.
2. A suit for seeking court's directions to the seller or his legal heirs, as the case may be, to execute the sale deed can be filed if they refuse to do it on their own accord.
1. The registrar can certainly allow the registration of the sale deed if the GPA confers express authority on the society to do so.
2. The vendor's legal heirs can file a lawsuit to recover the balance consideration.
Your last query itself has an answer to your question. This being an irrevocable GPA in favor of society, the registrar can allow the society to execute a sale deed either i its own favor or to a third party. If the principle vendor is not alive the legal heirs of deceased principal can stake their claim for balance of sale consideration to be received by the principle in this regard.
