• Buying land from power of attorney holder

I am about to buy a land in joka,kolkata under Bishnupur panchayat from a POA holder.
As confirmed by POA, the land is in the name of a person who has expired and there are 7 heirs to the property and the 7 principles have given power to the POA holder.
POA holder has provided me the following:
1. Registered coy of GPA on 100/- stamp paper registered at office of DSR.
2. warison certificate from panchayat declaring land owner is dead and their heirs are x y z etc.
3. Porchha i.e Daag and khatian no.
4. A search report stating that the land is free from any encumbrance
My question is : IS IT SAFE?WHAT MEASURES MUST BE TAKEN TO ENSURE ALL FORMS OF LEGAL SFETY.
Pl help.
Asked 9 months ago in Property Law
Religion: Hindu

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17 Answers

I presume mutation of land has been done in name of legal heirs 

 

2) you can  insist that legal heirs obtain letters of administration from district court as deceased died intestate 

 

3) it should not take more than 6 months 

Ajay Sethi
Advocate, Mumbai
81077 Answers
5010 Consultations

5.0 on 5.0

- Only a registered POA holder is having right to transfer the property on behalf of the owners .

- If the said POA is registered from the office of Registrar , then it is safe to purchase the land.

- However, other documents of the property are enough to purchase the land as mentioned by you. 

- You should check the title deed of the land in favour of the deceased person ,and also mutation of the land as well. 

- Further , the said POA must clearly mention that the POA holder is having power of transfer the property in the name of buyer on behalf of all the legal heirs , whether son or daughter of the deceased , and should be dully signed by all in the presence of the two witnesses. 

Mohammed Shahzad
Advocate, Delhi
6267 Answers
64 Consultations

5.0 on 5.0

Hello,

Yes , it is safe to purchase the property  as there are all documents which are essential in order to determine any defects in the right, title , interest of the property. As you have stated that there is a search report with you and if it includes the court search, bl and lro search and a search in the registry office , then you can go ahead without any hesitation.

Hope this helps.

In case you need any help feel free to contact me.

Regards

Swarupananda Neogi
Advocate, Kolkata
2913 Answers
6 Consultations

4.7 on 5.0

Dear Sir,

You are taking some risk along with property. First check whether property is transferred in the joint name of 7 legal heirs. Further check whether it is self acquired property of deceased or ancestral property. Further check that POA must be blood relation of seven legal heirs. Please see the following where in SC banned purchase through POA from 2011.

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No property sale on power of attorney: Supreme Court

 

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 immovableproperty 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.

 

 

  • Flat sold by builder to third party whem my Agreement to sale was valid

I had executed a Agreement to sale on one flat at Agra U.P. in 02/11/2012 with a validity of 15 months ,after 15 months the builder with mutual consent and reason that the the construction work is not over renewed it for another 12 months upto  28/01/2015,again with the same reason it sought and extension of another 6 months of agreement to sale which was made and agreement to sale was extended upto 22/07/2015.

After this we issued a notice to the builder and on reply to notice the builder through its legal counsel sought again time upto 15/10/2015.Subsequently again a notice was given on 17/10/2015 to execute the sale deed but the builder again replied by letter and sought extension upto 15/07/2016 with the same reason that flats are incomplete.After 15/10/2016 the builder is untraceable and recently he was arrested on forgery charges and currently in jail.On enquiry I came to know that the builder sold my flat that was having valid agreement to sale to third party with sale deed dated  28/06/2014.During this period my agreement to sale was valid but now builder is in jail what is the legal remedy and the party having sale deed has occupied the flat .now what is the legal remedy me to get my flat back.

 

Section 53A in The Transfer of Property Act, 1882

1[53A. 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 2[***] 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.]

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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

  1. 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

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 xxxx, 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.



Buying property through General Power of Attorney or GPA

The Honorable court has held that when someone transfers any immovable property through GPA, it does not convey any right 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.

Validity and Scope of General Power of Attorney

A lot of real estate is being bought through GPA; however, as a power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property, it still serves several purposes for buyers and sellers, particularly where registration of sale deed is not possible due to some legal issues.

 

The legal definition of the GPA is that it is a mere agency whereby the grantor authorizes the grantee to do certain acts specified therein; this he does on behalf of grantor, which when executed will be binding on the grantor as if done by him. Interestingly, GPA is revocable or can even be terminated at any time unless made irrevocable in a manner known to law.

GPA is Not Irrevocable

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. Thus, in totality GPA does not convey ownership of the buyer; however, a GPA holder may execute a deed of conveyance in exercise of the power granted under the power of attorney and convey title on behalf of the grantor.

Taking the judgment from the Supreme of India into consideration it’s a settled law now that immovable property can be legally and lawfully transferred or conveyed only by a registered deed of conveyance and not through GPA. Thus, as GPA does not conclude complete transaction, the Supreme Court parties should consider registering the deed of conveyance.

The Supreme Court in the case had however, observed that GPA transactions may also be used to obtain specific performance or to defend possession under section 53A of Transfer of Property Act, 1882.

Kishan Dutt Kalaskar
Advocate, Bangalore
5710 Answers
270 Consultations

4.8 on 5.0

Dear Sir,

The land is fit to be bought.  

Ganesh Singh
Advocate, New Delhi
6605 Answers
13 Consultations

4.5 on 5.0

GPA given by legal heirs ?

If yes than purchase is safe.

Yogendra Singh Rajawat
Advocate, Jaipur
21427 Answers
31 Consultations

4.4 on 5.0

1. First disclose the relation between the owners and the POA holder.

2. Unless and until the POA holder is a registered broker of the land or close relative of the owners .

3. Without seeing the papers the comment of clear title of the property can not be said. 

Devajyoti Barman
Advocate, Kolkata
22141 Answers
331 Consultations

5.0 on 5.0

If the principal died before executing POA then power of attorney is stand cancel/ revokes. You can buy the property from directly from the legal heirs and successors. No need to POA. Before buying you should get an affidavit from the seller and search the title in BLLRO.

Minansu Bhadra
Advocate, Kolkata
444 Answers
31 Consultations

4.9 on 5.0

You should yourself check the ancestral property and see who all are the heirs. Also see to it and meet everyone to see that they all agree. 

Go to the tehsil office and find out about it also check encumbrances.

Rahul Mishra
Advocate, Lucknow
11900 Answers
26 Consultations

5.0 on 5.0

Yes it is safe.

Rahul Jatain
Advocate, Rohtak
5365 Answers
4 Consultations

4.8 on 5.0

The details of the documents obtained by you are some of the vital documents which are necessary to purchase the property.

However these documents are to be vetted or scrutinised properly.This can be done only by an experienced lawyer.

He may call for any other additional documents also that would be essential to consider the title of the current sellers or the previous owners. 

Hence it is advisable that you spend some money now and obtain a proper legal opinion from a lawyer before venturing into this purchase to avoid lot of expenses in the form of litigation in future if something goes wrong after the purchase.

 

T Kalaiselvan
Advocate, Vellore
71133 Answers
1012 Consultations

5.0 on 5.0

You have to ascertain under whose name is the property registered in the revenue records/municipal records? If one of them has executed a POA, then it’s safe for you to proceed.

Nirmit Srivastav
Advocate, Lucknow
60 Answers

5.0 on 5.0

Also take an indemnity bond for the same and try to take signatures of all heirs in the said sale deed as confirming parties or witneses

Prashant Nayak
Advocate, Mumbai
23089 Answers
49 Consultations

4.4 on 5.0

1. The documents which have been shared with you do not prove that title is free and marketable. They only prove the competence of agent (GPA holder) to execute the sale deed for and on behalf of 7 heirs.

2. Conduct an independent and thorough search in the office of sub-registrar to ensure that title is free and marketable.

Ashish Davessar
Advocate, Jaipur
30308 Answers
881 Consultations

5.0 on 5.0

Without reviewing the Relevant document it is difficult to provide a definitive view. 

Mohammed Mujeeb
Advocate, Hyderabad
19001 Answers
17 Consultations

4.5 on 5.0

1. Is the POA holder a close relative of the owners of the property who are unable to come to the Registrar's ofice to register the sale deed?

 

2. If no, then it is highly unsafe to get the sale deed registered by the POA holder since such sale through POA holder has been adjudicated against by the Supreme Court in the year 2012 in the case Surya Electrics ....Vs.... The State of Haryana.

 

3. Let the sale deed be registered by all the title holders of the property.

 

4. Also ensure that the names of the legal heirs of the late title holder of the property is mutated in the land records.

Krishna Kishore Ganguly
Advocate, Kolkata
25165 Answers
726 Consultations

5.0 on 5.0

1. Yes it is safe if POA is registered after payment of consideration to deceased owner. 

2. You can also take affidavits from legal heirs of deceased owner.

Mohit Kapoor
Advocate, Rohtak
10685 Answers
7 Consultations

5.0 on 5.0

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