A GPA trans­ac­tion doesn’t trans­fer ti­tle

Valid own­er­ship ti­tle of im­mov­able prop­erty can only be trans­ferred by a reg­is­tered sale deed

HT Estates - - Front Page - Su­nil Tyagi

The re­cent Pace De­vel­op­ers case has gen­er­ated much at­ten­tion as the Delhi High Court had struck down Delhi govern­ment’s pre­vi­ous cir­cu­lar dated April 27, 2012. The pre­vi­ous cir­cu­lar had di­rected reg­is­trars in Delhi to not reg­is­ter any con­veyance re­lat­ing to an im­mov­able prop­erty based on a GPA. The vague lan­guage used had, in ef­fect, pro­hib­ited regis­tra­tion of even those GPA and SPA that were ex­e­cuted by par­ties in gen­uine trans­ac­tions.

The Delhi govern­ment’s new cir­cu­lar dated July 22, 2013 puts to rest con­fu­sion caused by the pre­vi­ous cir­cu­lar. The new cir­cu­lar, on one hand, curbs sale of properties on the ba­sis of GPA while on the other hand it al­lows ge­nune GPA trans­ac­tiosn to take place.

The present po­si­tion is that one may validly ex­e­cute GPA/SPA in favour of a spouse, son, daugh­ter, brother, sis­ter, rel­a­tive or per­son of trust for man­ag­ing his af­fairs of an im­mov­able prop­erty or to fur­ther ex­e­cute sale deed on his be­half. For ex­am­ple, if an owner is trav­el­ling and un­able to ex­e­cute sale deed in favour of the buyer, he may validly ex­e­cute a GPA/SPA in favour of his spouse/rel­a­tive/ per­son of trust, em­pow­er­ing him/her to ex­e­cute sale deed of the prop­erty on the owner’s be­half.

Such GPA/SPA is a gen­uine trans­ac­tion and hence reg­is­tra­ble. Es­sen­tially, the new cir­cu­lar re­it­er­ates the Supreme Court’s judg­ment in the Su­raj Lamp case. In the Su­raj Lamp case, the apex court had ruled that a GPA sale does not trans­fer valid ti­tle of own­er­ship in favour of a buyer. How­ever, many con­tinue to mis­in­ter­pret the ef­fect of the new cir­cu­lar to mean that GPA sales have been al­lowed. This is not so. GPA sales con­tinue to re­main a legally in­valid mode of trans­fer and the new cir­cu­lar does not al­ter the law laid down in the Su­raj Lamp case.

To put it sim­ply, an owner of a prop­erty can ex­e­cute a GPA in favour of an­other, but the per­son in whose favour GPA is ex­e­cuted (ie at­tor­ney) can­not claim him­self to be the owner, as no ti­tle is trans­ferred in favour of such at­tor­ney. Valid ti­tle of own­er­ship of im­mov­able prop­erty can only be trans­ferred by a reg­is­tered sale/ con­veyance deed. There is a cru­cial dif­fer­ence be­tween gen­uine GPA/SPA re­lat­ing to im­mov­able prop­erty on one hand and GPA sales on

the other.

THINKSTOCK

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