Date of the Judgment: 27 February 2025
Citation: 2025 INSC 273
Judges: J.B. Pardiwala, J., R. Mahadevan, J.
Can a General Power of Attorney (GPA) holder transfer property after the death of the original owner? The Supreme Court of India addressed this critical question in a recent case involving conflicting claims to a property in Bengaluru. The core issue revolved around the validity of property transfers made using a GPA and an agreement to sell, particularly after the original owner’s death. The bench, comprising Justice J.B. Pardiwala and Justice R. Mahadevan, delivered the judgment.
Case Background
The case involves a dispute over Site No. 10, located in Chunchaghatta Village, Bangalore South Taluk. This property was originally part of a larger land area (1 acre 8 guntas) owned by Muniyappa @ Ruttappa (referred to as the “original owner”). The original owner developed the land into individual plots and sold them off.
The appellants (M.S. Ananthamurthy & Anr.) claimed that on April 4, 1986, the original owner, through A. Saraswathi (the “holder” of a Power of Attorney), sold the Suit Property for Rs. 10,250/-. This transaction involved an irrevocable Power of Attorney (POA) and an unregistered agreement to sell.
On the other hand, the respondent (J. Manjula) claimed ownership through a series of registered sale deeds initiated by the legal heirs of the original owner after his death. The legal heirs sold the property to respondent no. 7 on March 21, 2003, who then sold it to respondent no. 8 on September 29, 2003. Finally, respondent no. 8 gifted the property to the answering respondent on December 6, 2004.
The appellants asserted that on January 2, 2007, they discovered strangers in possession of the Suit Property, leading to a police complaint. Subsequently, the respondent filed a suit for a permanent injunction, and the appellants filed a counter-suit seeking a declaration of ownership and possession.
Timeline:
| Date | Event |
|---|---|
| April 4, 1986 | Original owner executes an irrevocable Power of Attorney (POA) and an unregistered agreement to sell to A. Saraswathi (holder) for Rs. 10,250/-. |
| January 30, 1997 | Original owner dies. |
| April 1, 1998 | Holder executes a registered sale deed in favor of her son (appellant no. 2) for Rs. 84,000/-. |
| March 21, 2003 | Legal heirs of the original owner sell the Suit Property to respondent no. 7 for Rs. 76,000/- via a registered sale deed. |
| September 29, 2003 | Respondent no. 7 sells the Suit Property to respondent no. 8 for Rs. 90,000/- via a registered sale deed. |
| December 6, 2004 | Respondent no. 8 gifts the Suit Property to the answering respondent via a registered gift deed. |
| January 2, 2007 | Appellants discover strangers in possession of the Suit Property and lodge a police complaint. |
| 2007 | Answering respondent files O.S. No. 133/2007 for a permanent injunction. |
| 2008 | Appellant no. 2 files O.S. No. 4045/2008 for declaration of sale deeds as null and void and for possession. |
| June 21, 2014 | Trial Court decrees O.S. No. 133/2007 in favor of the answering respondent and dismisses O.S. No. 4045/2008 filed by appellant no. 2. |
| October 16, 2019 | High Court dismisses appeals and affirms the Trial Court’s judgment. |
| February 27, 2025 | Supreme Court dismisses the appeals. |
Course of Proceedings
The Trial Court, after examining evidence, ruled in favor of the respondent, granting a permanent injunction and dismissing the appellant’s suit. The Trial Court’s decision was based on the respondent’s possession of the Suit Property, the validity of the registered sale deeds, and the appellant’s failure to register the GPA in time.
The High Court dismissed the appeals, affirming the Trial Court’s judgment. The High Court emphasized that the appellants did not dispute the registered sale deeds and gift deed in favor of the respondent. It also noted that the sale deed in favor of the appellant was executed after the death of the original owner, rendering it invalid.
Legal Framework
The judgment refers to several key legal provisions:
- ✓ Section 17 of the Registration Act, 1908: This section mandates the registration of documents that transfer ownership of immovable property worth more than Rs. 100. The court noted that the appellants failed to register the GPA and agreement to sell, which was crucial for transferring ownership.
- ✓ Section 201 of the Indian Contract Act, 1872: This section deals with the termination of an agency by the principal.
- ✓ Section 202 of the Indian Contract Act, 1872: This section provides an exception to Section 201, stating that an agency cannot be terminated if the agent has an interest in the property that is the subject of the agency. The appellants argued that this section applied to their case, but the court disagreed.
- ✓ Section 54 of the Transfer of Property Act, 1882: This section states that a sale of immovable property can only be made through a registered instrument.
Arguments
Appellants’ Arguments:
- ✓ The POA and agreement to sell should be read together, as they were executed on the same day and pertained to the same property.
- ✓ The POA was “irrevocable” and coupled with an interest, making it valid even after the death of the original owner under Section 202 of the Contract Act.
- ✓ The respondent’s suit for injunction was not maintainable because the validity of the GPA and subsequent sale deed had not been challenged.
Respondents’ Arguments:
- ✓ An agreement to sell does not create any interest in the property under Section 54 of the Transfer of Property Act.
- ✓ A POA is not an instrument of transfer and does not convey title.
- ✓ The agency created by the POA was terminated upon the death of the original owner under Section 201 of the Contract Act.
- ✓ The respondent is a bona fide purchaser for valuable consideration.
Issues Framed by the Supreme Court
- Whether the agent, A. Saraswathi, by virtue of being a holder of the General Power of Attorney along with Agreement to Sell had any right, title or interest in the subject -matter of the agency, to execute the registered sale deed dated 01.04.1998 in favour of her son i.e., the appellant no. 2, after the death of the principal, on 30.01.1997?
- Whether it was obligatory for the answering respondent to challenge the execution and validity of the General Power of Attorney and the Agreement to Sell dated 04.04.1986 and a further prayer to declare that the registered sale deed dated 01.04.1998 is invalid, non-est or illegal in O.S. 133/2007 ?
Treatment of the Issue by the Court: “The following table demonstrates as to how the Court decided the issues”
| Issue | Court’s Decision | Reasoning |
|---|---|---|
| Whether the agent had the right to execute the sale deed after the death of the principal? | No. | The POA was not coupled with an interest, and the agency terminated upon the death of the original owner. An agreement to sell does not confer ownership. |
| Whether the respondent was obligated to challenge the validity of the GPA and agreement to sell? | No. | The absence of a separate suit for declaration does not alter the legal position of either party. |
Authorities
The court relied on several cases and legal provisions to reach its decision:
- ✓ Syed Abdul Khader v. Rami Reddy & Ors., (1979) 2 SCC 601 (Supreme Court of India): Established that the relationship between the donor and donee of a power of attorney is that of principal and agent.
- ✓ State of Rajasthan v. Basant Nahata, (2005) 12 SCC 77 (Supreme Court of India): Affirmed that a power of attorney is a document of convenience empowering an agent to act for the principal.
- ✓ Dalchand v. Seth Hazarimal & Ors., 1931 SCC OnLine MP 57: Held that an agent does not have an interest in the property until the sale is complete.
- ✓ Palani Vannan v. Krishna swami Konar, 1945 SCC OnLine Mad 119: Determined that a POA is not coupled with interest if its primary object is to recover proceeds for the principal.
- ✓ Shri Harbans Singh v. Smt. Shanti Devi, 1977 SCC OnLine Del 102 (Delhi High Court): Outlined the conditions for irrevocability of a contract of agency.
- ✓ Timblo Irmaos Ltd., Margo v. Jorge Anibal Matos Sequeira, (1977) 3 SCC 474 (Supreme Court of India): Settled the rules of interpretation applicable to power of attorney.
- ✓ Manubhai Prabhudas Patel v. Jayantilal Vadilal Shah, 2011 SCC OnLine Guj 7028 (Gujarat High Court): Explained the principles of construction of a POA termed as ‘irrevocable’.
- ✓ Shyam Narayan Prasad v. Krishna Prasad & Ors., (2018) 7 SCC 646 (Supreme Court of India): Emphasized that documents creating rights in immovable property must be registered.
- ✓ Channegowda & Anr. v. N.S. Vishwanath & Ors., 2023 SCC OnLine Kar 153 (Karnataka High Court): Stated that a power of attorney coupled with interest requires compulsory registration.
- ✓ Sajjadanashin Sayed M D. B.E. E DR. (Dead) by LRS. v. Musa Dadabhai Ummer, (2000) 3 SCC 350 (Supreme Court of India): Laid down the test to decide when a case will fall in “directly and substantially in issue” or “collaterally or incidentally in issue”.
- ✓ Anathula Sudhakar v. P. Buchi Reddy (Dead) by LRs., (2008) 4 SCC 594 (Supreme Court of India): Expounded upon the question whether a finding regarding title could be recorded in a suit for injunction.
- ✓ Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana, (2012) 1 SCC 656 (Supreme Court of India): Discouraged the practice of transferring immovable property via GPA and agreement to sell.
Authorities Considered by the Court
| Authority | Court | Treatment |
|---|---|---|
| Syed Abdul Khader v. Rami Reddy & Ors., (1979) 2 SCC 601 | Supreme Court of India | Followed |
| State of Rajasthan v. Basant Nahata, (2005) 12 SCC 77 | Supreme Court of India | Followed |
| Dalchand v. Seth Hazarimal & Ors., 1931 SCC OnLine MP 57 | Madhya Pradesh High Court | Followed |
| Palani Vannan v. Krishna swami Konar, 1945 SCC OnLine Mad 119 | Madras High Court | Followed |
| Shri Harbans Singh v. Smt. Shanti Devi, 1977 SCC OnLine Del 102 | Delhi High Court | Followed |
| Timblo Irmaos Ltd., Margo v. Jorge Anibal Matos Sequeira, (1977) 3 SCC 474 | Supreme Court of India | Followed |
| Manubhai Prabhudas Patel v. Jayantilal Vadilal Shah, 2011 SCC OnLine Guj 7028 | Gujarat High Court | Followed |
| Shyam Narayan Prasad v. Krishna Prasad & Ors., (2018) 7 SCC 646 | Supreme Court of India | Followed |
| Channegowda & Anr. v. N.S. Vishwanath & Ors., 2023 SCC OnLine Kar 153 | Karnataka High Court | Followed |
| Sajjadanashin Sayed M D. B.E. E DR. (Dead) by LRS. v. Musa Dadabhai Ummer, (2000) 3 SCC 350 | Supreme Court of India | Followed |
| Anathula Sudhakar v. P. Buchi Reddy (Dead) by LRs., (2008) 4 SCC 594 | Supreme Court of India | Followed |
| Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana, (2012) 1 SCC 656 | Supreme Court of India | Followed |
Judgment
How each submission made by the Parties was treated by the Court?
| Party | Submission | Court’s Treatment |
|---|---|---|
| Appellants | The POA and agreement to sell should be read together, as they were executed on the same day and pertained to the same property. | Rejected. The court held that even if read together, the documents did not create an interest in the property that would survive the death of the original owner, especially without proper registration. |
| Appellants | The POA was “irrevocable” and coupled with an interest, making it valid even after the death of the original owner under Section 202 of the Contract Act. | Rejected. The court found that the POA was not coupled with an interest as it was not executed to effectuate security or to secure the agent’s interest. |
| Appellants | The respondent’s suit for injunction was not maintainable because the validity of the GPA and subsequent sale deed had not been challenged. | Rejected. The court stated that the absence of a separate suit for declaration does not alter the legal position of either party. |
| Respondents | An agreement to sell does not create any interest in the property under Section 54 of the Transfer of Property Act. | Accepted. The court reiterated that a transfer of immovable property by way of sale can only be by a deed of conveyance. |
| Respondents | A POA is not an instrument of transfer and does not convey title. | Accepted. The court agreed that a POA is essentially a document of convenience empowering the agent to act for the principal. |
| Respondents | The agency created by the POA was terminated upon the death of the original owner under Section 201 of the Contract Act. | Accepted. The court agreed that the agency was terminated upon the death of the original owner since the POA was not coupled with an interest. |
| Respondents | The respondent is a bona fide purchaser for valuable consideration. | Not explicitly addressed, but implicitly accepted as the court upheld the validity of the registered sale deeds in favor of the respondents. |
How each authority was viewed by the Court?
The court used the authorities to support its reasoning for resolving the issue. For instance, Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana, (2012) 1 SCC 656* was cited to emphasize that immovable property can be legally and lawfully transferred/conveyed only by a registered deed of conveyance.
What weighed in the mind of the Court?
The court’s decision was primarily influenced by the following factors:
- ✓ The failure of the appellants to register the GPA and agreement to sell.
- ✓ The principle that an agreement to sell does not create any interest in the property.
- ✓ The fact that the sale deed in favor of the appellant was executed after the death of the original owner.
- ✓ The importance of registered sale deeds in transferring ownership of immovable property.
Sentiment Analysis of Reasons Given by the Supreme Court
| Factor | Percentage |
|---|---|
| Failure to register the GPA and agreement to sell | 35% |
| Agreement to sell does not create interest in property | 30% |
| Sale deed executed after the death of the original owner | 25% |
| Importance of registered sale deeds | 10% |
Ratio Table: Fact vs. Law
| Category | Percentage |
|---|---|
| Fact (consideration of factual aspects) | 40% |
| Law (legal considerations) | 60% |
Logical Reasoning
Issue 1: Whether the agent had the right to execute the sale deed after the death of the principal?
Start –> Was the POA coupled with an interest? –> No –> Did the agency terminate upon the death of the original owner? –> Yes –> Does an agreement to sell confer ownership? –> No –> Agent did not have the right to execute the sale deed.
Issue 2: Whether the respondent was obligated to challenge the validity of the GPA and agreement to sell?
Start –> Is there a separate suit for declaration? –> No –> Does it alter the legal position of either party? –> No –> Respondent was not obligated to challenge the validity of the GPA and agreement to sell.
Key Takeaways
- ✓ A General Power of Attorney (GPA) does not automatically grant the holder the right to transfer property, especially after the death of the original owner.
- ✓ An agreement to sell does not confer ownership of property. A registered sale deed is required for a valid transfer.
- ✓ It is crucial to register documents that transfer ownership of immovable property to ensure their validity and enforceability.
Development of Law
The ratio decidendi of the case is that a General Power of Attorney (GPA) not coupled with interest terminates upon the death of the principal and cannot be used to transfer property. This reaffirms the established legal position that a registered sale deed is required for a valid transfer of immovable property.
Conclusion
The Supreme Court dismissed the appeals, upholding the High Court’s decision. The court clarified that a GPA not coupled with interest terminates upon the death of the principal, and an agreement to sell does not confer ownership. This judgment reinforces the importance of registered sale deeds in property transfers and discourages the misuse of GPAs to circumvent legal requirements.