Can I transfer property in Delhi through power of attorney?

Two years ago in 2012, the Supreme Court of India, in the case of Suraj Lamps and Industries (P) Ltd vs State of Haryana, had made it clear that SA/GPA/WILL transactions are not `transfers’ or `sales’ and that such transactions cannot be treated as completed transfers or conveyances. Following the judgment the Delhi Government issued a circular dated 27 April 2012 directing the relevant registration authorities not to register any GPA Sales in Delhi.

Thus, following the circular, no transfer of immovable property could take place in Delhi through a GPA. Though sale is still not allowed through GPA, the DDA has decided to allow the conversion of property from leasehold to freehold on the basis of registered agreement to sell and general power of attorney.

DDA to allow conversion of property from leasehold to freehold

The decision came in August 2014 wherein the DDA issued a notice and said that the Competent Authority in Delhi Development Authority (DDA) after taking the opinion of Solicitor General has decided to allow such conversions subject to producing documents authenticating that the transaction is genuine.

The government construction body said that the conversion had been suspended in the wake of a Supreme Court judgment in a case in 2011 and due to several unlikely results, the body has decide to accept applications for conversion of property from leasehold to freehold.

However, for that the genuineness would be verified at the time of processing of conversion application and subject to production of related documents such as agreement to sell registered with sub-registrar of Delhi.

Conversion only after complete verification

The DDA says that on verification of the concerned documents the lease administrating agencies i.e. Land Disposal Wing and Housing Wing would process the conversion applications. However, a lot of this will depend upon the completion of all other codal formalities as laid in conversion brochure.

The urban housing company says that the person seeking conversion on the basis of a GPA is required to produce several documents that include documents like Agreement to Sell registered with Sub-Registrar of Delhi. According to the agency the registered ‘Agreement to Sell’ should contain the stipulation that the entire sale consideration has been received by the seller and the physical possession of the property has been delivered to the purchaser.

The DDA official clarified that verification of the physical possession of the applicant, who has applied for conversion of leasehold tenure into freehold, will be done by way of electricity bills, water bills, telephone bills etc.

5 things to remember while buying a resale property

People buy a resale property because it comes with several advantages like there is no project delay, and it is ready-to-move-in property as well as there is no service tax or VAT burden. However, when you are buying a resale property you should do only after necessary enquiries i.e. due diligence; for instance, you may check verifying title records and ensure that the property specifications conform to the claims.

Though there are various documents that are to be checked like the builder-buyer agreement and original payment receipts against the installments paid, etc. here are five documents that you must check before buying a resale property.

Five documents you must check

First thing first, you must ask for ‘Sale Deed’ as it’s the core legal documents that are proof of property sale and transfer of ownership between the seller and the buyer. Make sure that the Sale Deed is registered and when going for execution ensure that all the conditions between the seller and the buyer are complied with.

Second, you must check ‘Mother Deed’ or parent document as it’s the document that traces and is proof of the origin or antecedent ownership of the property from the beginning. Mother Deed consists of the change of ownership of the property via sale, gift, partition or inheritance, etc. and the buyer knows the earlier owners. If the original Mother Deed is missing, the buyer should obtain the certified copies from the registering authorities.

Third, when you are buying a resale property, you must obtain ‘Encumbrance Certificate’ or EC which denotes the charges in the ownership or liabilities created on a property that is held against a home loan as security. You can obtain EC submitting a copy of the Sale Deed and filling the Form 22 and affixing a non-judicial stamp to the jurisdictional sub-registrar’s office.

Fourth, you must obtain ‘Occupancy Certificate’ if it’s a constructed property which is given only after the authorities carry out an inspection on the property and works as a proof of fact that the project constructed by the builder has met all the given norms. Occupancy Certificate is also needed when you apply for a home loan.

Fifth, you should ask for ‘Possession Certificate’ which is mandatorily issued by the Builder or Developer to the first owner and confirms proper construction and allows the owners to take possession. Though it is issued only to the original buyer, it passes through the subsequent buyers from the original buyer.

Does a widow have rights in her husband’s property?

Section 10 in The Hindu Succession Act, 1956 talks about the distribution of property in situation husband dies intestate and says that distribution of property shall take place among the heirs in class I of the Schedule wherein the Rule 1 specifically states that the intestate’s widow, or if there are more widows than one, all the widows together shall take one share.

For instance, if husband dies intestate and is survived by two widows and a son, heirs in Class I shall take the property simultaneously and to the exclusion of all others. Here according to the provisions of Rule 1 of section 10, both the widows of the husband shall take one-half share in the property of the husband and the other half shall go to his son.

In situation a husband dies intestate leaving two widows and no sons, both of them shall inherit the property equally, i.e. both of them shall be entitled to one-half share, there being no other Class I heir.

A remarried widow can keep the share of her dead husband’s property

In 2008, the Supreme Court of India decided that widow who remarries cannot be deprived of a share in her dead husband’s property as according to it the widow becomes an absolute owner of the deceased husband’s riches to the extent of her share as the provisions of the Hindu Succession Act 1956 would prevail over the earlier Hindu Widow’s Remarriage Act 1856.

The Supreme Court of India did not concur with the provisions of the Hindu Widow’s Remarriage Act 1856 which says that all rights and interests which any widow may have in her deceased husband’s property by way of maintenance, or by inheritance, shall cease upon her re-marriage and set it aside.

The apex court based its decision on the fact that since the Hindu Marriage Act provides for absolute ownership for a widow over her deceased’s husband property; she cannot be deprived of the same. The change in her marital status thereafter does not matter, particularly after the tremendous changes brought in by the Hindu Succession Act.

The Supreme Court in its decision observed that the Hindu Succession Act had brought about a sea change in Shastric Hindu law and made Hindu widows eligible and equal in the matter of inheritance and succession along with male heirs.

The Apex court held that section 4 of Hindu Marriage Act would have overriding effect over the text of any Hindu law including the Hindu Widow’s Remarriage Act.

Son’s and daughter’s right in father’s property

Sons and daughters have several rights as a coparcener. For instance, they get a right in ancestral property by birth; right to survivorship: if one coparcener dies the property gets divided among the rest. They are in joint possession and ownership of property and if they want partition, they can claim so by filing a partition suit.

Coparcener can also acquire a separate property and at the same time has right to alienate the property to any stranger his share in ancestral property and self-acquired property. Father can also gift property to his son and it won’t be treated as ancestral property which the son can then alienate to anyone he wants.

Can a father gift a property to his son?

In C. N. Arunachala Mudaliar vs C. A. Muruganatha Mudaliar the Supreme Court held that property gifted by a father to his son could not become ancestral property in the hands of the son simply by reason of the fact that he got it from his father. The court observed that the property of the grandfather can normally vest in the father as ancestral property.

The father gets ancestral property under two conditions i.e. inherits such property on the death of the grandfather or receives it by partition made by the grandfather himself during his lifetime. However, when the father obtains the grandfather’s property by way of gift, it is not considered an ancestral property.

Sons and daughters don’t have any claim on property gifted by grandfather

A gift from father to his son is not part of ancestral property as the son does not inherit the property on the death of the grandfather or receive it by partition made by the grandfather during his lifetime. The grandson has no legal right on such property because his grandfather chose to bestow a favour on his father which he could have bestowed on any other person as well.

Thus, the interest which he takes in such property must depend upon the will of the grantor and therefore, when the son has got the property from his father as a gift, his sons or daughter cannot claim part in it calling it ancestral property. He can alienate the gifted property to anyone he likes and in any way he likes. Such a property is treated as self-acquired property, provided there is no expressed intention in the deed of the gift by the grandfather while gifting the property to his son.

Sons and daughters have property rights only on the properties that have devolved upon their father and become ancestral property in the father’s hands.

Can a Hindu daughter claim right in ancestral property?

Yes, this was made possible by the amendment of the Hindu Succession Act, 1956 which originally didn’t give daughters equal rights to ancestral property. The government amended the law and removed the disparity on September 9, 2005 and established that now a daughter also would acquire ownership rights on the property from the time of her conception.

Thus, daughter has been made coparcener like sons and now she has the same rights of partition and power to deal with the property as she pleases. Like any coparcener she can seek a partition and sale of the family home as well as long as these are ancestral properties or joint family properties.

Now, daughter becomes a coparcener in a Hindu Coparcenary and has the same rights in the Coparcenary property as she would have had if she had been a son. However, whereas the amendment vested her with the right on the ancestral property, it also asks her to fulfill the obligations as it puts similar liabilities that it puts to sons.

The Amendment has retrospective effect

The established law is that the amended section 6 of the Hindu Succession Act applies to daughters born prior to June 17, 1956 or thereafter (between June 17, 1956 and September 8, 2005), provided they are alive on September 9, 2005, that is on the date when the amendment act of 2005 came into force.

Thus, section 6 of Hindu Succession Act, 1956 which was amended by the Amendment Act of 2005 has retroactive effect and do not and cannot impinge upon or curtail or restrict the rights of daughters born prior to 9 September 2005. Now, there is a complete parity in terms of rights and there is no disparity between son and daughter when it comes to inheritance in ancestral property.

How can you assert your right in ancestral property?

You can file suit for partition in the ancestral property like any son would do as you are a coparcener like him and have all rights that he has. Thus, whether you are married, widowed or unmarried can approach the civil court for seeking a partition from the brothers or family or father and ask for the rightful portion in the ancestral property.

When a daughter files a suit for partition, she pays court fees which depends on the value of her share in the property and has to be calculated as per court fee chart. Thus, now, daughter can acquire property from the ancestral properties and can deal with it the way she wants as it becomes her absolute property and her children have no right during her lifetime.

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.

Selling ancestral property legally

Many disputes arise when someone is selling a property; issues come up when it’s ancestral property where a lot of other claimants object where not just the seller but the potential buyer feels in trouble. It’s important to understand that under Hindu law, there are two types of properties: ancestral properties and self-acquired properties.

Difference between Ancestral Property and Self-Acquired Property

Ancestral property under Hindu Law is called Coparcenary property, wherein after the 2005 amendment, even the daughters borne in any such Joint Hindu Family will also get their share like the sons. Before the amendment, only male members of the Joint Hindu family were called Coparceners.

On the other hand, a self-acquired property is any property purchased by an individual from his own resources or any property he acquired as a part of the division of any Ancestral/Coparcenary property. This also includes a property obtained through a legal heir or by any Testamentary document like Will.

Can I sell ancestral property as Karta?

If you are a Karta of a HUF (Hindu Undivided Family) you have all the powers to manage the family and its assets under the Hindu law. However, you don’t have an absolute independent, individual ownership of the property and each coparcener has share, right, title and interest in the ancestral property.

There are some provisions wherein you can sell ancestral property being Karta of HUF as mentioned in Mitakshara. Firstly, during the time of distress, secondly for the sake or benefit of the family and thirdly for pious purposes like religious work. Here ‘Time of Distress’ means the requirement that affects the whole family, like a case of legal necessity.

Similarly, whereas ‘For the sake of the family’ means for its maintenance of the home, ‘pious purposes’ includes indispensable acts of duty such as the obsequies of the ancestors and other religious works. For the Sake of the Family may also include selling the property for family necessity and benefit.

Can I sell ancestral property as a Coparcener?

A coparcener can sell his interest in the ancestral property for that he needs to ask his share out from the ancestral property. For it he may file a suit for partition at any time. The settled law is that if some purchaser has bought the portion of a coparcener in the ancestral property he cannot compel him to file a suit for partition; it is the choice of the coparcener to decide as to when he would like to put an end to the status of the jointness and be separate in property.