A GPA transaction doesn’t transfer title
Valid ownership title of immovable property can only be transferred by a registered sale deed
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.