In the back ground of prevalent practice of transferring ownership of immoveable properties by way of executing General Power of Attorney [GPA], Agreement to Sell and Will, the Hon’ble Supreme Court in the case of “Suraj Lamp & Industries Private Limited vs. State of Haryana & Anr.” Special Leave Petition [SLP] bearing no 13917 of 2009, examined the validity of such transaction and held as follows:

(i) A transfer of immovable property by way of sale can only be by a deed of conveyance (sale deed). In the absence of a deed of conveyance (duly stamped and registered as required by law), no right, title or interest in an immovable property can be transferred. [Para 11]

(ii) The Observation of the Delhi High Court, in ‘Asha M. Jain v. Canara Bank’ – 94 (2001) DLT 841, that the “concept of power of attorney sales have been recognised as a mode of transaction” when dealing with transactions by way of SA/GPA/WILL are unwarranted and jot justified, unintendly misleading the general public into thinking that SA/GPA/WILL transactions are some kind of recognised or accepted mode of transfer and that it can be a valid substitute for a sale deed.Such decisions to the extent that they recognize or accept SA/GPA/WILL transactions as concluded transfers, a contrasted from an agreement to transfer, are not good law. [Para 15]

(iii) Such transactions [transactions by way of SA/GPA/WILL] can not be relied upon or made the basis of mutation in Municipal or Revenue records. What is stated above will apply not only to the deed of conveyance in regard to freehold property but also to transfer of lease hold property. A lease can be validly transferred only under a registered Assignment of Lease. It is time that an end is put to the pernicious practice of SA/GPA/WILL transactions known as GPA sales. [Para 16]

(iv) The SA/GPA/WILL transactions can continue to be treated as existing agreement of sale. Nothing prevents the affected parties from getting registered Deed of Conveyance to complete their title. The said transactions may also be used to obtain specific performance or to defend possession under section 53A of TP Act. If they are entered before this day, they may be relied upon to apply for regularization of allotments / leases by Development Authorities. [Para 18]

In Para no 18 the Hon’ble Court as observed as follows:

“We have merely drawn attention to and reiterated the well – settled legal position that SA/GPA/WILL transactions are not ‘transfers’ or ‘sales’ and that such transactions can not be treated as completed transfers or conveyances.”
The Hon’ble Court further made is clear that:

(i) If the documents relating to SA/GPA/WILL transactions has been accepted acted upon by DDA or other development authorities or by Municipal or revenue authorities to effect mutation, they need not be disturbed, merely on account of this decision. [Para 18]

(ii) Observations [in this judgment] are not intended to in any way affect the validity of sale agreements, and power of attorney executed in genuine transactions. …A person may enter into a development agreement with a land developer or builder for developing the land either by forming plots or by constructing apartment buildings and in that behalf execute an agreement of sale and grant a Power of Attorney empowering the developer to execute agreements of sale or conveyances in regard to individual plots of land or undivided shares in the land relating to apartments in favour of the prospective purchasers. In several States, the execution of such deve4lopment agreement and power of attorney are already regulated by law and subjected to specific stamp duty. [Para 19]

(iii) Our observation ‘SA/GPA/WILL transactions’ are not intended to apply to such bonafide / genuine transactions. [Para 19]