Suraj Lamps & Industries Pvt Ltd v State of Haryana
Immovable property can be transferred only by a registered deed of conveyance; GPA/agreement-to-sell/Will transfers convey no title.
Facts
The Court took up the widespread practice of transferring immovable property through 'SA/GPA/WILL' transactions (sale agreement plus general power of attorney plus will) instead of registered sale deeds, a device used to evade stamp duty, registration charges and to deal in unauthorised or disputed properties. Having earlier flagged the issue, the Supreme Court examined whether such transactions could validly transfer title to immovable property.
Issues
- Whether immovable property can be lawfully transferred by a general power of attorney, agreement to sell or will instead of a registered sale deed.
- What legal effect, if any, such SA/GPA/WILL transactions have.
Arguments
Practitioners of the device urged that SA/GPA/WILL arrangements were a recognised commercial practice conferring effective rights over property. The Court, expressing concern for revenue loss, litigation and dealings in disputed/unauthorised land, held the practice legally untenable.
Held
The Court held that under Section 54 a sale of immovable property of Rs.100 or more can be made only by a registered instrument, and a transfer of immovable property can be effected only by a registered deed of conveyance under Section 5. A power of attorney is not an instrument of transfer and creates no title; an agreement to sell and a will likewise convey no title or interest, save for the limited protection of part-performance under Section 53A. Such transactions cannot be treated as completed transfers or as the basis for mutation in municipal or revenue records.
Ratio decidendi
Title to immovable property passes only through a duly registered deed of conveyance; SA/GPA/WILL transactions do not convey title or create any interest in property except to the limited extent of Section 53A.
Significance
Leading authority on Section 54; curbed the rampant GPA-sale practice nationwide and reaffirmed that registration is mandatory and exhaustive for valid transfer of immovable property. Consistently followed (e.g. Devinder Singh v Fateh Jung Singh, AIR 2018 P&H 70).
Related
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Take a subject test →Source: /Users/tiwari/Documents/All Law Books/raw/tpa/CHAPTER 3 Of Sales of Immovable Property.md
