ONLY GENUINE GPA TRANSACTIONS COUNT
How can we issue guidelines dealing with each and every type of transaction? There are no broad guidelines that will cover all sorts of genuine GPA transactions. It is complicated,” says a senior revenue officer, requesting anonymity.
Asked if the department would appeal, Dharam Pal, divisional commission (revenue), says, “We are examining the order and have asked for suggestions from the legal department. It will take approximately 15 days to come up with a final conclusion. It’s not appropriate on my part to comment on anything at this stage.”
Since the high court has asked the sub-registrar to examine the genuineness of the transactions of Pace Developers and the prospective buyer, legal experts are divided on the issue of whether this is a genuine GPA transaction or a ‘GPA sale’.
“When plot owner Rani Puri executed a GPA in favour of Pace Developers, the latter paid 3% stamp duty for its registration. Now when the company is selling the floor to a prospective buyer, the government is earning 6% stamp duty on that from the buyer, too. There is no evasion of stamp duty and so it’s a genuine GPA transaction and the sub-registrar should register it,” says Rajiv Dutta, senior SC advocate, who argued the matter in the high court on behalf of Pace Developers.
“Had Pace Developers executed another agreement of sale/GPA/will in favour of the prospective buyer, then it would have amounted to GPA sale but this is not the case,” adds Dutta.
In the Suraj Lamp vs Haryana case, the SC had very categorically held that “A person may enter into a development agreement with a land developer or a builder for developing the land either by form- ing plots or by constructing apartment buildings and 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 share in the land relating to apartments in favour of the prospective purchaser.”
Kumar Dushyant Singh, another SC lawyer, drawing a parallel between the case before the high court and the SC judgment, says, “The Supreme Court has already decided this point. The court says that if the developer has a GPA from the owner he can enter into agreement of sale or conveyance with a prospective buyer.”
Contrary to Dutta’s view, other lawyers hold that since Pace Developers, by virtue of having a GPA, becomes merely an agent of the property owner, he can enter into an agreement of sale with a prospective buyer but cannot execute a sale deed.
“By executing a sale deed and receiving the proceeds thereof, Pace Developers acts as the owner, which it is not. Only a title holder is entitled to receive the proceeds of sale in a genuine transaction and not the agent. In my opinion, Pace Developers can get a clear title only by paying the remaining 3% stamp duty, (it has already paid 3% at the time of registering the GPA). Otherwise the registration of the same is liable to be refused,” says Mohammad.
Now it is up to the sub-registrar to decide whether the sale deed should be registered or refused.