krupa should file suit to set aside fraudulent sale deed executed in favour of Vinod and further  sale deed executed  by Vinod 

2)take the plea that was not aware of sale executed by Ganesh and came to know about fraud only recently and suit has been filed within period of 3 years of being aware of fraudulent sale deed 

3) file criminal case of cheating , criminal breach of trust against Ganesh and Vinod under section 406. 420 of IPC 

Dear Sir,

It is very complicated matter and even courts cannot give correct answer and always the person who is in physical possession of property will enjoy the benefits.  The last transaction seems to be valid transaction and immediately the last purchaser shall change Katha in his name on the basis of last sale deed as it was executed by original owner. The Supreme Court put a stop for the sales by way of Power of Attorney. The updated law on the above subject is as follows:

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Imp points on Power of Attorney by NRI

A property transaction through Power of Attorney executed by NRI calls for extra checks/scrutiny. A sale deed can be declared NULL and VOID because of a small mistake or error in the execution of Power of Attorney by NRI. Sometimes these errors/mistakes are intentional and most of the times unintentional. In recent past, i came across multiple cases wherein a property transaction was challenged based on error/mistake in the execution of Power of Attorney (POA) by NRI. In many cases, the status of NRI is being concealed by his lawyer/CA in POA to avoid TDS. An NRI executing POA in India cannot declare his/her status as Resident Indian. As i keep highlighting that a buyer or seller in India should mention the status of another party in sale deed to avoid any future tax disputes. A case of the false declaration in sale deed may not put the onus of concealment of facts on the resident Indian in the property transaction.

My general observation is that Resident Indian’s are not aware of do’s and don’t of Power of Attorney executed by NRI. Even professional help does not help in most of the cases due to lack of knowledge. A Power of Attorney is issued by NRI if he/she cannot be physically present in India for the execution of property transaction. As a buyer or seller, you should insist on the physical presence of NRI Buyer/Seller in India for sale deed. It will avoid a lot of future hassles. The risk is HIGH if the buyer is Resident Indian, and Seller is NRI, who is represented by Power of Attorney holder. In this post, we will discuss this particular scenario for simplicity purpose. Though it is equally important if a seller is Resident Indian, and Power of Attorney holder represents the NRI Buyer. Reason being, it is important to trace money trail from NRI buyer i.e. whether money is being properly channeled for the property transaction. Let’s check important points or Do’s and Dont’s by Resident Indian Buyer if the transaction is through Power of Attorney by NRI.

Reason for Execution of Power of Attorney

 A resident Indian buyer should AVOID property transaction through Power of Attorney holder of an NRI. The best case scenario is the presence of an NRI seller in India for execution of sale deed. Sometimes the circumstances do not permit so a buyer you should check the reason for the execution of Power of Attorney. The reason should be reasonable and logical. If the buyer is convinced with the reasoning, then he should insist that NRI Seller should include this particular reason, in Power of Attorney. In short, the purpose/reason for the execution of a power of attorney should be clearly mentioned in the Power of Attorney.

Process to Execute Power of Attorney

The most critical step is to check whether the Power of Attorney is executed as per the laid down process. It’s a 2 step process i.e. attestation of POA at Indian Consulate/Embassy and the registration of same in India. Attestation of POA is required even if the seller is not an NRI i.e. not completed 180 days outside India. On the other hand, if NRI executes POA on Indian Soil then attestation is not required. In short, a POA executed on foreign soil irrespective of the status of a seller require attestation at Indian Consulate/Embassy. The registration process in India follows it. Let me highlight steps/checks for a buyer.

Step1: NRI seller creates two copies of Power of Attorney with detailed terms and conditions. As a buyer, you should go through each and every clause carefully to understand the content.

Step 2: Check whether the POA is signed by two witnesses present in the country of residence of a seller.

Step 3: Check whether the witnesses were physically present in Indian Consulate/Embassy at the time of signature or not. If they were not physically present, then their signatures should be attested by the Local Notary.

Step 4: The POA should be attested by the Indian Consulate/Embassy.

Step 5: The Attested POA should be registered in the India by the resident Indian i.e. POA holder. The registration process in India should be completed within three months from the date of execution of POA. The POA can be registered in SDM (Sub Divisional Magistrate) office or Sub-Registrar Office. The rule may vary from state to state.

The relation between the NRI and POA holder should be mentioned in the POA. Preferably the details of ID proof of a POA holder issued by Indian Govt should be specified in the POA. The buyer retains the original copy of Power of Attorney for future reference.

Also, note that in some cases POA holder simply notarize the POA in India instead of registering it in SDM or Sub-registrar office. A “Notarized POA” is not the same as “Registered POA”. A notarized POA is legally not valid in India. A POA executed by NRI on foreign soil should be registered in SDM or Sub-Registrar office.

Payment to NRI Seller

In a recent case, i observed that buyer was cheated by Power of Attorney holder of an NRI Seller. It’s a misconception that payment towards property transaction should be transferred to POA holder. Please understand that Power of Attorney holder is only a representative of an NRI seller. The resident Indian buyer should make payment only to the NRI seller in his her NRE/NRO account. An NRI seller can authorize POA holder to accept payment on his behalf but cannot authorize payment to POA holder. Even if NRI seller authorizes POA holder to receive direct payment, the buyer should avoid such property transactions. It may land a buyer in tax trouble.

In the case of multiple NRI sellers, the payment should be transferred in the proportion of ownership in the property to each seller. In another case, one of my clients was cheated by NRI Seller. NRI couple jointly held the property. There was a dispute between husband and wife & my client was not aware of same. NRI husband insisted on transferring 100% consideration value in his account. After the deal had been done, the wife of a seller filed a case of cheating and fraud by his husband. Therefore, all the payment should be made in the proportion of ownership in the property. Each of the sellers should execute separate Power of Attorney.

TDS u/s 195

In one of the case, my client received notice for not deducting TDS u/s 195. In my post, How to deduct TDS on NRI u/s 195? i explained this in detail. In this case, the transaction was completed by POA holder. The POA holder told my client that as she (POA holder)  is resident Indian therefore relevant TDS will be 1% u/s 194IA. Again i would like to clarify that POA holder is only a representative of NRI Seller. The TDS will be deducted u/s 195 in the case of NRI seller. The only exception is if NRI seller produces NIL or Lower Tax deduction certificate that i explained in my post How NRI’s can lower TDS on property sale?.

Indemnity Clause

Lastly, each property transaction is unique with multiple permutations and combinations. Therefore, a buyer can safeguard his/her financial interests by including a blanket indemnity clause in the sale deed. To avoid being caught on the wrong side also ensure that sale deed clauses are in concurrence with the terms and conditions of the POA. It will eliminate any possibility of legal/tax hassles.

Concluding Remarks: If you are buying/selling property from NRI then it is advisable to seek professional help to avoid any unpleasant surprises in future. The rules and regulations governing such transactions are bit complicated, especially on the taxation front. Always remember that Indian Law or Tax Authorities will not have any jurisdiction on the NRI residing abroad. On the other hand, a buyer who is resident Indian cannot escape the Indian Law/Tax Authorities. Moreover, the 100% onus of legal/tax compliance rests with the Resident Indian buyer.

http://indiatoday.intoday.in/story/property-sale-through-gpa-not-valid/1/154711.html

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.

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.

1. Limitation period for registered sale agreement is 3 years and the instant case is barred by limitation.

2.  Nevertheless, send a legal notice to Mr. Ganesh, to come forward to register the property in your name under specific performance or let him return the money he had received from you.

3.  If there's no positive response, file a suit in the jurisdictional Court to recover your money , if the delay is condoned by the Hon'ble Court.

If the Possession was handed over to Krupa after the agreement of sale was executed in his favor by Ganesh after receiving  full sale consideration amount then Krupa can file a suit for specific performance of contract seeking direction to Ganesh to execute the sale deed in his favor.

He can claim innocence of all such further transactions of this property 

This will help him to tide over the problem of limitation issue.

If the possession of proeprty is not with Krupa and the latest purchaser Vinod had transferred the khata to his name by the virtue of sale deed on his name, then the claim by Krupa may not be valid since it is very badly barred by limitation.

Dear client, krupa has executed a registered agreement having been paid fully consideration therefore   he is entitle for property. Moreover,  he may ask for compensation.

If a sale deed is executed without consent of another legal heir and co owner then it can be set aside by filing a suit and injunction order in it

The GPA has already been registered hence it cannot be adjudicated again.

2. The limitation is three years.

3. No. 

4.  Whether the possession was handed over, if yes, then you can file a suit for specific performance of contract even now or a declaratory suit based on the possession and enjoyment  

5. There is no use of that unless the possession was handed over 

GPA is registered and admissible in evidence 

2) you cannot pay adjudication fees on GPA after 27 years 

3) suit for specific performance is barred by limitation 

4’) if possession was delivered by seller in 1995 registered sale agreement operates as conveyance as full consideration had been paid to seller 

5) file suit to set aside fraudulent sale deed executed by seller in favour of Vinod 

6) seek injunction restraining sale of property by Vinod 

1.  As per your narration, the GPA is already registered. In that case there's no need for adjudication of the registered GPA now.

2.  Yes, the Specific performance case is barred by limitation. However you can make an attempt and pray for condonation of delay and in case your prayer is accepted for condonation of delay, then you can proceed with specific performance against the seller.

3.  As you have rightly suggested, you can seek injunction instead of refund of advance amount.

4.  When the seller has acknowledged receipt for having received the full consideration, I wonder what prevented you from taking further action to your advantage then. Better late than never.

5.  It will be to your advantage that the seller has acknowledged the full and final settlement towards the purchase of property.

6.  The buyer or his POA can file the suit in the jurisdictional Forum. The main impediment is inordinate delay and is barred by limitation. If the delay could be condoned, then only there's chance. 

1. You need to execute sale deed no need to validate gpa. You can register it by paying Penalty. 

2. Yes 

3. Yes

4. It's favorable

5. He needs to return it with interest or sell it to you.