Do t make any cash payment 

2) if payment is made by cheque and deal is cancelled at least you can seek refund 

3) don’t give any PDC 

4) if at all-you want to proceed  now make only nominal payment up front 

Yes hiba can be done but it’s better if a registered deed is executed 

I have already answered this query in another question 

Yes, even if you have a registered irrevocable SPA, the original allottee can still create practical trouble later—especially during the final stages like issuance of Completion Certificate (CC), Functional Certificate (FC), Transfer Memorandum (TM), or at the time of Registry. GNIDA often insists on the allottee’s physical presence, so if he turns hostile or uncooperative at that point, it can delay or derail the process. The SPA gives you authority, but not full legal control or title—so it’s powerful, but not foolproof.

Now, regarding Hiba or Wakf—since the allottee is a Muslim, he can still execute a gift (Hiba) or even create a Wakf after signing the ATS and SPA. That's because until the registry is done and title is transferred, he technically remains the legal owner. And yes, this could complicate things.

So, you must protect yourself contractually and practically.

Here’s what I’d suggest:

1. Get everything registered—not just the SPA, but also the agreement to sell, indemnity bond, collaboration agreement, and most importantly, a registered Will in your company’s favour.

2. In every agreement, put in strong clauses:

That he will not execute any Hiba, gift, sale, Wakf, or third-party transfer.

That he indemnifies you fully if he violates this.

Include an arbitration clause, a specific performance clause, and clearly define what happens if he defaults.

3. Get a pre-signed affidavit where he gives his consent for TM and registry, and undertakes to appear at the sub-registrar office when needed.

4. Receipts for cash should be notarized, witnessed, and tied to the agreement. A ₹100 stamp paper is not enough. And make sure you mention terms around the PDCs—that they’re security and can’t be misused.

5. Make sure your attorney-holder (under SPA) is someone 100% reliable and aligned with your interest, because they will be executing all approvals, liaisons with GNIDA, etc.

Lastly, since you’re also investing in construction (~1 Cr.), make sure the physical possession is documented and protected through your collaboration agreement, and keep a regular paper trail (photos, contractor bills, GNIDA communication, etc.).

It’s a commercially promising deal, especially if you're confident of completing construction by 2026–27, but yes, you’ll need to manage the legal risk tightly. With the right paperwork and consistent follow-up, you can minimize the chance of anything going wrong.

1. The allottee can do any mischief for want of more money or for any other unspecified reason despite having executed the special power of attorney deed, because the SPA  deed is not a title deed hence the rights or interests to the property cannot be transferred in the name of the power agent  especially when the allottee himself is yet to acquire the title, he can very well issue a legal notice to cancel the power of attorney deed and by issuing a publication in a local newspaper, he may effect the cancellation of the SPA deed.  The power agent may not be able to initiate any legal action agaisnt the principal towards acquisition of the property  except he may have to approach court for refund of the money received as consideration by the allottee towards the execution of this power of attorney deed especially when the allottee himself did not acquire the legally valid title or interest in the property in question. 

2. The allottee if decides to transfer the interest over the property in favor of a third person by a Hiba or any other valid mode of legal transfer, the power agent cannot claim the title to the property because the power of attorney agent was never bestowed with the title or interests over the property, hence the possibility cannot be ruled out.

3. There is a great amount of risk involved in it especially at this raw stage. Neither the seller has any legal right or title to the property to make even  the registered  agreement to sell  enforceable under the provisions of specific performance of contract at a later stage if a conflict of interest arises or the seller deviates and is reluctant to proceed further to transfer the property in your favor once the property has been legally transferred to him by a registered sale deed after completion of construction and the completion certificate is furnished.  Therefore you may stop making any further payment until there is a significant development in the construction and the same is clearly sighted in the immediate near future.  Also you may bear it in mind that arbitration clause in the POA deed is an unheard concept as per law because as per law the power of attorney deed is not an agreement between two individuals but it is a document voluntarily executed by the principal to the power agent hence the concept of an arbitration clause cannot be inserted in the SPA deed.  Also another strange concept  called Will.  You may please note that even the registered Will executed can be enforced by the beneficiary only after the death of the testator and not before that. In the meantime the testator can very well cancel the Will by issuing a notice at his whims and the Will will stand cancelled even if it was executed by a registered instrument.  Moreover The Will in favor of the company are subject to legal complications when compared to the individual beneficiary.

4. It is advisable that you do not issue any PDCs at this stage or at any stage, avoid become more anxious over this legally complicated subject because if you act on any misguidance and due to your anxiety to somehow acquire the valuable property, may sometimes land you into a legal trouble and may tend to lose your efforts, money and energy at the end of the day.

Now the choice is yours because you have already repeated the same question earlier in another thread of this website and my opinion did not differ from the one what I have expressed now to that of the previous one.

1. Irrevocable SPA – Potential for Obstruction by the Allottee

Even if the allottee executes a registered irrevocable Special Power of Attorney (SPA) delegating all authority to your nominee (friend/relative), there remains a legal risk. As per Section 202 of the Indian Contract Act, 1872, an SPA that is coupled with interest cannot ordinarily be revoked. However, the interest must be clearly spelled out in the instrument, and even then, in practice, the principal may attempt revocation or cause obstruction. Moreover, since the plot cannot be legally transferred under GNIDA rules until Completion and Functional Certificates are obtained, the ultimate registration and execution of Transfer Memorandum (TM) will still require the cooperation of the allottee. Therefore, despite an irrevocable SPA, there is no absolute guarantee against future obstruction, and the allottee may create delays or roadblocks.

1. Possibility of Hiba or Wakf by the Muslim Allottee Post-SPA/ATS

Under Muslim personal law, the allottee retains the right to execute a Hiba (gift) or create a Wakf (religious endowment) until the property is validly transferred in your company’s name. Execution of an ATS or SPA does not bar him from alienating the property through these means. While you propose to incorporate indemnity and undertaking clauses in the SPA, such contractual safeguards cannot defeat the personal law rights of the allottee if Hiba or Wakf is validly executed. Moreover, Wakf is irrevocable, and if created before registration, it can severely complicate your title. Therefore, I strongly advise securing additional protective instruments to prevent such acts.

1. Precautionary Measures in Light of Financial Exposure and Delay in Transfer

Given the timeline for construction and the risk of cancellation by GNIDA due to non-development, the following precautionary steps are essential:

• Enter into a registered Collaboration Agreement outlining responsibilities, construction schedule, rights to physical possession, and default clauses.
• Execute a registered indemnity bond and undertaking from the allottee and his heirs restraining any alienation (gift, Wakf, sale) till registration.
• Consider including a declaration of development rights coupled with interest in the SPA to strengthen legal enforceability under Section 202.
• Avoid paying large sums in unaccounted cash. An agreement on ₹100 stamp paper for cash receipt is not legally enforceable and inadmissible in court under Section 35 of the Indian Stamp Act.
• Avoid giving blank post-dated cheques (PDCs). If misused, you may be exposed to prosecution under Section 138 of the Negotiable Instruments Act, 1881, even if the underlying transaction fails.
• Insist on a public notice in newspapers post-execution of the ATS and SPA to alert third parties.
• Ensure that construction work is done only after map sanction and other GNIDA permissions to avoid violation or cancellation risk.
• Have an escrow mechanism for cash disbursals linked to progress milestones.

1. Risks Associated with Registry Process and GNIDA Approval

The final registration at the Sub-Registrar's office and issuance of TM by GNIDA both depend on post-construction approvals. The GNIDA may reject the TM if the functional requirements are not satisfactorily met or if any legal encumbrance (such as Wakf declaration) is reported. Also, the allottee's physical presence may be required at the time of registration, despite the SPA, unless GNIDA explicitly accepts attorney-holder execution. This again emphasizes the need for continued cooperation from the allottee, for which you must have strong contractual, documentary, and legal safeguards.

Conclusion and Final Recommendation

This is a high-risk-high-reward transaction with clear opportunities but also significant legal and procedural exposure. While the proposed structure with SPA, ATS, Will, and Collaboration Agreement offers an initial framework, none of these documents, individually or collectively, substitute the final title transfer via registered deed and GNIDA TM.

I strongly recommend proceeding only after:

• Verifying the title chain and current status of leasehold rights with GNIDA;
• Conducting full due diligence on time extensions granted, dues paid, and compliance status;
• Structuring payments through banking channels;
• Having a registered conditional development agreement to secure your construction investment;
• Drafting legally vetted indemnities and protective covenants covering Hiba/Wakf contingencies.

This is a complex real estate transaction with several layers of risk, especially given the current GNIDA rules and the cash component. Here's a breakdown of your questions and related precautions, considering the current legal landscape in India:

• GNIDA Transfer Rules: Transfer is generally permitted only after the unit is functional (functional certificate issued) and a building completion certificate is obtained. Full payment of premium and other dues to GNIDA is also required. GNIDA can cancel allotments for non-construction within the extended period.

• Irrevocable Power of Attorney (POA): While "irrevocable" in name, a POA does not transfer title to immovable property. It merely creates an agency. Courts have reiterated that property can only be legally transferred by a registered deed of conveyance/sale deed. An irrevocable POA may be coupled with interest, making it harder to unilaterally revoke, but it's not a substitute for a sale deed.

• Agreement to Sell (ATS): A registered ATS is a legally binding contract outlining the terms of sale but does nottransfer ownership. It only establishes the intent to transfer ownership in the future.

• Cash Transactions: Section 269ST of the Income Tax Act prohibits receiving ₹2 lakh or more in cash for a single transaction, from a single person in a day, or for transactions related to one event/occasion. Violations can lead to penalties equal to the cash received. The Supreme Court has also emphasized informing the Income Tax Department about cash transactions of ₹2 lakh or more in property deals.

• Hiba (Gift under Muslim Law): For a Hiba to be valid, there must be: (1) a declaration by the donor, (2) acceptance by the donee, and (3) delivery of possession. Registration is not necessary for Hiba, but delivery of possession is crucial.

• Wakf: Wakf involves dedicating property for charitable or religious purposes. Once property is declared Wakf, it generally becomes inalienable and cannot be transferred or sold in the usual commercial sense.

• Arbitration Clause: A valid arbitration clause in agreements can provide a mechanism for dispute resolution outside of court, offering potential for quicker and more confidential resolution.

• Indemnity Bond: An indemnity bond is a legal document where one party agrees to compensate another for potential losses or damages. It's often used in property transactions to cover risks like missing documents or title disputes.

Addressing Your Questions:

1) Can the allottee change or do any mischief or block or create trouble for transfer / issue of completion certificate/ functional certificate/ transfer memorandum for change of ownership at GNIDA / registry time even after registered irrevocable SPA?

Yes, despite the registered irrevocable SPA, the allottee can still cause trouble, and there are significant risks:

• Title Remains with Allottee: Crucially, a Power of Attorney (even an irrevocable one) does not transfer ownership of the property. The allottee remains the legal owner until a registered Sale Deed is executed in your company's favor. This is the biggest vulnerability.

• Refusal to Cooperate for Certificates: While the SPA delegates power for obtaining CC and Functional Certificate, the allottee's ultimate cooperation might still be required, especially if GNIDA raises any objections or demands the allottee's direct involvement. They could refuse to provide necessary documents or affidavits if requested by GNIDA.

• Blocking Transfer Memorandum (TM): The TM for change of ownership at GNIDA will also require the allottee's underlying agreement and possibly their physical presence/signature at some stage, even if the attorney signs on their behalf. If the allottee decides to challenge the SPA or raise disputes, GNIDA might halt the process.

• Refusal at Registry: This is the most critical point. Clause (d) clearly states the Muslim allottee needs to be present for the final registry. If they refuse to appear or create last-minute demands, the transaction cannot be completed, even if the plot is transferred in GNIDA's records. The final cash payment is also linked to this step, giving them leverage.

• Challenges to SPA: While "irrevocable," an SPA can still be challenged in court on grounds like fraud, coercion, misrepresentation, or if it's argued that it was not "coupled with interest" in a legally recognized manner. If such a challenge is successful, the SPA could be rendered invalid.

• GNIDA's Discretion: GNIDA has its own policies and procedures. If they perceive any dispute or unusual transaction, they might exercise their discretion to delay or refuse the transfer until clarity is established, regardless of your agreements with the allottee.

4) Can allottee execute Hiba / Wakf after SPA / ATS and create problem?

Yes, this is a significant risk, especially with a Muslim allottee.

• Hiba (Gift): A Hiba can be made without registration, but requires declaration, acceptance, and crucially, delivery of possession. If the allottee physically delivers possession to someone else as a Hiba, and it's proven, it could create a serious legal challenge for your company, despite your ATS and SPA.

• Wakf: If the allottee dedicates the property as a Wakf, it becomes a religious endowment and is generally inalienable. This would effectively block any transfer to your company. The presence of clauses in your SPA and collaboration agreement against Hiba/Wakf is good, but enforcing them against a unilateral act of dedication by the allottee might require legal action and could lead to lengthy litigation.

5) What other precautions can be taken as building construction will take 1 year and as it is a desperate deal, property value is sure to increase.

Given the risks, especially the rising property value which incentivizes the seller to backtrack, here are critical precautions:

• Maximum Upfront Payment (Legally Compliant): While you plan 35% upfront, consider if more can be paid upfront via bank transfer (avoiding cash) without violating Section 269ST. The cash component (25% during construction, 40% at registry) is a huge red flag.

  • Legal Limit for Cash: You cannot receive or pay ₹2 lakh or more in cash for a single transaction. Your proposed cash payments (25% and 40% of the sale price) are almost certainly going to exceed this limit and expose both parties to severe penalties under the Income Tax Act. The seller could face a penalty equal to the amount received in cash. This is a non-negotiable legal requirement. You must re-evaluate the payment structure to be fully banking.

  • Risk of Undocumented Payments: Cash payments are nearly impossible to prove if a dispute arises. The seller could deny receiving them, leaving you without recourse. The 100 Rs stamp paper agreement for cash and PDC as security is extremely weak and will likely not hold up in court for such large amounts.

• Stronger Security than PDC: Blank Post-Dated Cheques (PDCs) are not strong security for significant cash payments. They can be dishonored, and recovering the money would involve a separate legal process. For a cash component of 65% of the deal value, this is highly insufficient.

• Registered Collaboration Agreement: Ensure the collaboration agreement is also registered, clearly outlining the construction obligations, timelines, and consequences of default. This adds more legal weight.

• Specific Performance Clause: Include a robust "specific performance" clause in your Registered Agreement to Sell. This allows you to sue the allottee in court to compel them to complete the sale if they default, rather than just claiming damages.

• Penalty Clause for Default: Stipulate clear and substantial penalties if the allottee defaults or obstructs the transfer, including forfeiture of a large portion of the upfront payment by them, and compensation for your construction expenses.

• Monitoring Construction and Certificates: Actively monitor the construction progress and work closely with your attorney and the allottee to ensure timely application and follow-up for the Completion Certificate and Functional Certificate from GNIDA.

• Due Diligence on Allottee: Understand the allottee's financial situation and why they are selling. Desperation can sometimes lead to unethical behavior.

• Bank Financing Consideration: If the allottee takes a loan on the property before transfer, it will complicate the sale. Ensure there are no existing encumbrances and a clause stating they will not create any during the transaction period.

• Clear Chain of Events: Define a very precise timeline and sequence of events for construction, obtaining certificates, payment tranches, TM application, and final registry.

• Physical Possession Handover Documentation: While a collaboration agreement is good, formally document the handover of physical possession for construction purposes. This can be used as evidence of your control over the property.

• Legal Advice from GNIDA Experts: Consult a lawyer specializing in GNIDA property matters. GNIDA has its own set of rules and interpretations that can be nuanced.

6) He will get an agreement on Rs 100 stamp paper for CASH amount from us and take 04 blank PDC as security for CASH Amount (25% + 40%).

This is the most concerning aspect of your proposed deal and presents extreme risk:

• Illegality of Cash Payments: As detailed above, cash payments exceeding ₹2 lakh per transaction are illegal under the Income Tax Act. You are exposing both your company and the allottee to significant penalties.

• Weak Security: An agreement on a ₹100 stamp paper for a substantial cash amount is legally flimsy. It will be very difficult to prove in court that these cash amounts were paid, especially against the allottee's potential denial. Blank PDCs offer minimal security; they can be stopped, and enforcing them requires litigation.

• Loss of Recourse: If the allottee absconds or refuses to cooperate after receiving the cash, you will have a very hard time recovering that money legally.

Strong Recommendation: ABSOLUTELY AVOID ANY CASH PAYMENTS. All payments should be made through traceable banking channels (NEFT, RTGS, Cheque, Demand Draft). This not only ensures legal compliance but also provides undeniable proof of payment, protecting your company's interests. If the seller insists on cash, it's a massive red flag, and you should seriously reconsider the deal due to the immense legal and financial risks.

Dear quersit,

As per your query what i unserstood:

Given the proposed structure of the transaction involving the ITES plot in GNIDA, the legal documentation must be extremely airtight to protect your financial and legal interests. While the deal appears workable with creative structuring, the risk remains substantial until the registry is complete in your company's name. Below is a direct response to your updated query in active voice and clear, active legal advisory form:

You can enter into this transaction through a Registered Agreement to Sell, a Registered Special Power of Attorney (SPA), a Registered Will, and a Collaboration Agreement, but you must proceed cautiously and incorporate several safeguards. The fact that the allottee is a Muslim individual, and the transfer is not permitted until the Completion Certificate and Functional Certificate are issued, increases the complexity and risk.

1. The allottee can still create trouble despite registered SPA and ATS

Yes, the allottee can interfere with the process even after executing a registered, so-called "irrevocable" SPA and Agreement to Sell. Indian courts have held that unless an SPA is "coupled with interest" and supported by consideration, it can still be revoked. He can:

• 
  Refuse to cooperate in filing or signing the Transfer Memorandum (TM) at GNIDA,
• 
  Delay or obstruct map approvals, completion certificate, and functional certificate by refusing to appear, or giving non-cooperation letters to GNIDA,
• 
  Allege coercion or fraud later to stall the registry or create legal challenges.

2. The allottee can still execute a Hiba (gift) or declare the property as Wakf

Yes, under Muslim Personal Law, the allottee can unilaterally execute a Hiba (gift) or Wakf of the property, even orally, especially if possession remains with him or he claims to retain beneficial ownership. Even a registered SPA or Will does not bar a Muslim from executing such instruments unless there is a clear sale deed or registered title transfer in your name.
This is a major legal loophole and a real risk in your current plan.

3. You must take the following precautions before paying further amounts or starting construction

a. Register a Collaboration Agreement giving you possession, construction rights, and exclusive control of the property

This agreement should:

• Clearly record the transfer of physical possession,
• Give your company exclusive rights to construct, apply for certificates, and represent before GNIDA,
• Allow your company to execute work in its own name, not just as attorney.

b. Ensure the SPA is:

• 
  Registered,
• 
  Supported by consideration (mention in recitals),
• 
  Coupled with interest (explicit clause that it is granted for development and transaction rights),
• Contains non-revocation clause and indemnity from legal heirs.

c. Take a Registered Indemnity Bond

The indemnity bond should be signed by the allottee and his legal heirs, indemnifying you for:

• Any loss due to cancellation,
• Any claim arising out of Hiba or Wakf,
• Any non-cooperation or breach in issuing Completion or Functional Certificate or Transfer Memorandum.

d. Get no objection affidavits and witness signatures

Include:

• His spouse, brother, children, and all heirs,
• 2 independent witnesses from your side,
• Video recording of the execution if possible.

e. Avoid paying 25% or 40% in cash, and never hand over PDCs for such amounts

PDCs create future enforceable obligations without context. If he loses the original ATS or manipulates the narrative, he could:

• Present the PDCs for recovery,
• File cases of cheating, non-payment, or criminal breach.

f. Secure a registered lien or developer’s right with GNIDA (if allowed)

Explore whether GNIDA allows:

• 
  Noting developer’s interest,
• 
  Submission of collaboration agreement to its office,
• Filing of caveat against further dealings in GNIDA records.

g. Use a registered Will only as a supporting document

You cannot rely on a Will for title unless it is probated and uncontested after death. Treat it as a supporting document, not the main conveyance.

4. Risks due to rising property value within 1–2 years

If the market value of the property increases significantly:

• The allottee may renegotiate, stall transfer, or refuse to execute final registry,
• He may challenge SPA, deny receiving payments, or allege forgery or duress,
• Legal heirs may file claims on the basis of Hiba, oral gift, or family rights.

This is especially likely in your case, as the allottee has no real ITES interest and is acting under pressure from GNIDA due to non-construction. His desperation may later turn into leverage or conflict once the value appreciates and your building is constructed.

Final Recommendation

You must convert this into a secure development arrangement with enforceable rights. Do not rely solely on SPA/ATS/Will unless you register a Development Agreement, indemnify your investment, and record all payments officially. Avoid cash. Avoid PDCs. Use bank transfers and registered instruments.

You may also consider filing a civil suit for specific performance or declaration of rights if delays or disputes arise mid-construction.

In case you need my assistance, i can be contacted through kaanoon.

DEAR SIR/MADAM,

You are suggested to the drafting the core/heart and mine of any agreement or document. Therefore, you are required to get the every document drafted intelligently and wisely so that there will be no occasion of allottee or any other person or entity to disturb your rights at any stage or any point of time. 

Question 1:  Continuation to sale of ITES plot in GNIDA through ATS / SPA / collaboration agreement?

Dear Client,

• Can the allotee change or do any mischief or block or create trouble for transfer / issue of completion certificate/ functional certificate/ transfer memorandum for change of ownership at gnida / registry time even after registered irrevocable SPA?

Yes, even if you possess a registered irrevocable special power of attorney, the Muslim allottee would still be able to cause mischief at various stages such as certification, payment transactions, final conveyance etc.  The instrument does not take away the allottee’s legal title, and it fails to compel the GNIDA to recognize you as the lessee without the formal transfer memorandum, post completion and functional certificate regime.

• Can the allottee execute Hiba/Wakf after SPA/Agreement to sell?

Yes, this is possible. It is legal for the allottee to execute the Hiba or create a wakf after signing the agreement to sell and a special power of attorney. Such acts have no legal validity against you. Even the GNIDA might fail to recognized them if they violate any of the lease conditions or the transfer policy. Though there wouldn’t ensue legal issue, it might still create practical problems.

• what other precautions can be taken as building construction will take 1 year and as it is a desperate deal, property value is sure to increase.
• Register the agreement to sell under the registration Act, 1908, since it would strengthen the evidence.
• Secure the physical possession by drafting a possession memo signed by allottee and two witnesses
• Ensure the payment of all time extension charges, lease dues, and penalties to the GNIDA.

I hope this answer helps. In case of future queries, please feel free to contact us. Thank you.