Supreme Court Deprecates the Practice of Recognizing General Power of Attorney or Will as title Documents

Supreme Court Deprecates the Practice of Recognizing General Power of Attorney or Will as title Documents

The Supreme Court coram comprising of Justices Dipankar Datta and Pankaj Mithal have observed that a Will or General Power of Attorney (“GPA”) cannot be recognized as title documents or documents conferring right in any immovable property. It was further held that the non-execution of any document by the GPA holder consequent to it, renders the said GPA useless.

In the present case, the Appellant- Mr. Ghanshyam was the owner of a property situated in Delhi (suit property). He entered into an Agreement to Sell dated 10 April, 2002 with Mr. Yogendra Rathi- Respondent for sale of Suit Property and received the entire sale consideration from the Respondent.

On the same day, the Appellant executed a will bequeathing the Suit Property to the Respondent. The Appellant further executed a General Power of Attorney in favor of the Respondent. The possession of the Suit Property was handed over to the Respondent, however, no sale deed was executed.

The respondent allowed the appellant to occupy the ground floor and one room on the first floor of it for a period of 3 months as a licensee; the appellant failed to vacate the suit premises despite expiry of the license period and termination of license vide notice dated 18 February, 2003. The Respondent filed a suit against the Appellant seeking the latter’s eviction from the Suit Property and recovery of mesne profits.

The Respondent claimed his ownership on the Suit Property on the strength of the Agreement to Sell dated 10 April, 2002, General Power of Attorney, memo of possession, receipt of payment of sale consideration and a will dated 10 April, 2002.

The Appellant contended that the documents cited by the Respondent have been manipulated on blank papers. However, there was no evidence to that effect. The Appellant did not dispute the execution of such documents or receipt of sale consideration by him.

According to the Trial Court held that there was no manipulation of documents and thus, the Respondent was entitled to decree for eviction and recovery of mesne profits.

Aggrieved, the appellant filed a first appeal and thereafter a second appeal before the High Court and both were decided in favor of the Respondent. Subsequently, the Appellant filed an appeal before the Supreme Court.

The Apex Court held that an agreement to sell is not a document of title or a deed of transfer of property by sale and as such, may not confer absolute title upon the respondent over the suit property in view of Section 54 of the Transfer of Property Act, 1882.

“nonetheless, the agreement to sell, the payment of entire sale consideration as mentioned in the agreement itself and corroborated by the receipt of its payment and the fact that the plaintiff-respondent was put in possession of the suit property in accordance with law as is also established by the possession memo on record, goes to prove that the plaintiff-respondent is de-facto having possessory rights over the suit property in part performance of the agreement to sell,” observed the bench.

With respect to the issue, whether any title can be conferred through Will, the Bench opined that a Will comes into effect only after the death of the executant.

Since a Will has no force during the life of the executant, the Appellant’s will did not confer any right upon the Respondent.

It was observed, “Similarly, the will dated 10 April, 2002 executed by the defendant-appellant in favor of the plaintiff-respondent is meaningless as the will, if any, comes into effect only after the death of the executant and not before it. It has no force till the testator or the person making it dies. The said stage has not arrived in the present case and, therefore, even the aforesaid will in no way confers any right upon the respondent.”

The Court clarified that the power of attorney executed by the appellant was of no consequence as on the strength of said power of attorney, neither sale deed had been executed nor any action pursuant thereof had been taken by the power of attorney holder which may confer title upon the respondent.

Non-execution of any document by the general power of attorney holder consequent to it renders the said general power of attorney useless, opined the Court.

Further, the bench criticized the practice of recognizing General Power of Attorney or will as title documents.

Therefore, the Court ruled, “in connection with the general power of attorney and the will so executed, the practice, if any, prevalent in any State or the High Court recognizing these documents to be documents of title or documents conferring right in any immovable property is in violation of the statutory law. Any such practice or tradition prevalent would not override the specific provisions of law which require execution of a document of title or transfer and its registration so as to confer right and title in an immovable property of over Rs.100/- in value.”

Lastly, the Court remarked that, legally an agreement to sell may not be regarded as a transaction of sale or a document transferring the proprietary rights in an immovable property but the prospective purchaser having performed his part of the contract and lawfully in possession acquires possessory title which is liable to be protected in view of Section 53A of the Transfer of Property Act, 1882. The said possessory rights of the prospective purchaser cannot be invaded by the transferer or any person claiming under him.

The Bench upheld the High Court’s view that the Respondent was entitled to a decree for eviction with mesne profits.