Many properties in Punjab, Haryana, Delhi and Uttar Pradesh were bought and sold without a registered sale deed. The buyer took a sale agreement, a General Power of Attorney and a Will from the seller, paid the price and moved in. In Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana & Anr., (2012) 1 SCC 656, decided on 11 October 2011, the Supreme Court held that such “SA/GPA/Will” transactions are not sales. They do not transfer title. Immovable property can be transferred only by a registered deed of conveyance.
Case at a glance
- Case: Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana & Anr.
- Citation: (2012) 1 SCC 656 (earlier order: (2009) 7 SCC 363)
- Case number: SLP (C) No. 13917 of 2009
- Bench: Justice R.V. Raveendran (author), Justice A.K. Patnaik and Justice H.L. Gokhale
- Date: 11 October 2011
- Holding: SA/GPA/Will transactions do not convey title or create any interest in immovable property.
How the case came about
By an order of 15 May 2009, the Court noticed how widespread SA/GPA/Will “sales” had become and called on the Union and the States of Delhi, Haryana, Punjab and Uttar Pradesh to respond. All of them agreed such transactions should be curbed (paras 1 to 4). The Court listed the harm they cause (paras 2 and 3):
- evasion of stamp duty, registration fees, income tax and capital gains;
- generation and circulation of black money;
- growth of land mafia, and the same property being “sold” to several people;
- difficulty in verifying title, which hurts genuine buyers.
The Court also noted that very high stamp duty pushes people towards undervaluation and these shortcuts, and appreciated Haryana’s reduction of stamp duty (para 5).
What the Supreme Court held
1. A sale needs a registered conveyance
Under Section 54 of the Transfer of Property Act, 1882, a sale of immovable property worth Rs 100 or more can be made only by a registered instrument. A contract for sale does not by itself create any interest in the property (paras 7, 11 and 12). Section 17 of the Registration Act, 1908 makes registration compulsory, and Section 49 says an unregistered document required to be registered does not affect the property (paras 9 and 10).
2. An agreement to sell is not a sale
An agreement of sale, even with possession, does not make the buyer the owner. Section 53A of the Transfer of Property Act gives a buyer in possession only a shield to protect possession against the seller. It is not a source of title (paras 7, 11 and 18).
3. A power of attorney is not a transfer
“A power of attorney is not an instrument of transfer” (para 13). It only authorises the agent to act for the owner, including executing a registered sale deed on his behalf. Even an irrevocable GPA does not pass title to the holder.
4. A Will speaks only after death
A Will takes effect only on the death of the testator and can be revoked at any time before that. Registering a Will does not make it a transfer (para 14).
5. Not a valid mode of transfer, not a basis for mutation
Immovable property “can be legally and lawfully transferred/conveyed only by a registered deed of conveyance” (para 16). SA/GPA/Will transactions are not “transfers” or “sales”, and they cannot be the basis for mutation in municipal or revenue records. The same applies to leasehold property, which needs a registered assignment of lease (para 16).
What it does not affect
- Genuine powers of attorney: a bona fide GPA given to a spouse, son, daughter, brother, sister or relative to manage affairs or to execute a deed of conveyance, and powers given under development agreements with builders, remain valid (para 19).
- Past transactions: the Court said it was only stating settled law. Earlier SA/GPA/Will transactions can still be treated as agreements of sale. They can be used to sue for specific performance, to defend possession under Section 53A, or for regularisation of allotments by development authorities. Mutations already made on such documents need not be disturbed (paras 17 and 18).
- Getting a proper deed: parties to such transactions can always obtain a registered conveyance from the owner (para 18).
Why it matters in Punjab and Haryana
- Buyers: a GPA, agreement and Will bundle does not make you owner. Insist on a registered sale deed and get the mutation (Intkal) done on its basis.
- Sellers: the property stays yours in law until a registered deed is executed. A GPA can be misused to “sell” it again.
- Litigation: a plaintiff claiming ownership only through SA/GPA/Will has no title. His remedies are specific performance or protection of possession, not a declaration of ownership.
- Revenue records: mutation entered on an unregistered GPA sale is open to challenge, and mutation never creates title anyway (see our post on mutation and title).
Before any land deal, also read the Fard carefully. Our guide explains Khasra, Khewat, Khatauni, Killa and Min.
Frequently asked questions
Is property bought on GPA legal?
The documents are not void, but the buyer does not become the owner. He holds an agreement of sale and a power of attorney. To become owner, a registered sale deed must be executed.
Can the GPA holder sell the property?
He can execute a registered sale deed as the owner’s attorney, if the power allows it and is still in force. Then the buyer under that registered deed gets title from the owner, not from the attorney.
Does Suraj Lamp apply to old transactions?
It declares existing law. Old transactions are not treated as sales, but they can be used for specific performance, Section 53A protection and regularisation, and mutations already made are not disturbed.