Power Of Attorney Holder Cannot Sell Property

Message which I received on Whatsapp and Facebook related to registration of title deed executed by Power of Attorney holder says that a buyer should not buy a property which is sold by PA and if he or she does so , his ownership of property may not stand valid in the eyes of law. This is a message copied from an old judgement of Supreme Court which was published in Newspaper in the year 2011.

In this regard , the Supreme Court has given the ruling many times in the past too. I therefore submit below first , the latest message I received, and then copy of news items related to this subject published a few years ago for your ready reference. 
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Sale of property through power of attorney not valid Property sales through the common practice of general power of attorney (GPA) will not give ownership title to the buyer. In a landmark judgment that is expected to send a large number of property owners into a tizzy, the Supreme Court held that the GPA method of immovable property sales is not a valid form of transfer of property. A three-judge bench presided over by Justice R. V. Raveendran said that property can be lawfully transferred only through"A power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property," the bench said, after interpreting various provisions of the law concerning property sales. However, the bench said the judgment will not affect "genuine transactions" under the GPA. The judgment delivered on Wednesday would have an impact on both freehold and leasehold properties and affect the mode of transfer of property in Delhi and the National Capital Region (NCR) where GPA sales are very common. Even though it can cause some hardship to those who have already purchased property through the GPA, the order will help curb evasion of duties, flow of black money into real estate and also save people from being cheated by unscrupulous owners selling the same property to several people. Navin Raheja, chairman and managing director of Raheja Developers said, "The court's decision will help to curb the circulation of black money to some extent in the real estate sector where titles are manipulated. Besides, many property transactions where prices are rounded off will be affected. However, overall there won't be any significant impact on normal property sales." The apex court said there can be no mutation of property in municipal and revenue records on the basis of such documents. The bench, however, clarified that its order should not be a ground for disturbing mutations already effected by the Delhi Development Authority (DDA) or any other authority. But, there is little relief for thousands of people who hold property without mutation as GPA sales can only be treated as existing sale agreements. An application of the order with prospective effect would have protected their interest. The court, though, stressed that it had merely reiterated the well- settled legal position that such transactions cannot be treated as completed transfers. The court could not make the order applicable with prospective effect as it had not laid down any new law. However, it said that those who had already bought property through GPA before its judgment could use the documents to apply for regularisation of allotments and leases by development authorities. "Nothing prevents affected parties from getting registered deeds of conveyance to complete their title. The said transactions may also be used to obtain specific performance or to defend possession under section 53A of TP (Transfer of Property) Act," the court said. In order to ensure that GPA continues to serve its purpose, the court said its judgment will not affect the validity of sale agreements and powers of attorney executed in genuine transactions. "For example, a person may give a power of attorney to his spouse, son, daughter, brother, sister or a relative to manage his affairs or to execute a deed of conveyance." The court further said that a person can enter into a development agreement with a land developer or builder for developing the land either by forming plots or by constructing apartment buildings. In that connection he can execute an agreement of sale and grant a power of attorney that will allow the developer to further sell the property to prospective purchasers. While hearing a matter on the subject, the court had decided to clarify the law on the issue as such transfers had not only led to evasion of stamp duty and registration charges but had also provided scope for investing black money in real estate. Besides, such transfers were giving nightmares to bona fide purchasers as the same property could be sold to several people in the absence of verification or certification of title. A proper verification of ownership was possible only if all property were transferred through registered sale deeds. Noting that such transactions were now not just limited to Delhi but had spread to neighbouring areas, the court had sought the views of the Centre and the states of Delhi, Haryana, Punjab and Uttar Pradesh. There was a near unanimity that such transactions should be discouraged as it caused loss of revenue and increased litigation due to defective titles. Going into the legality of such transfers, the court said any contract of sale which was not a registered sale deed would fall short of the requirements of the relevant provisions of the Transfer of Property Act and could not confer any title. The court said a transfer of property by way of sale could only be by a sale deed. "In the absence of a deed of conveyance (duly stamped and registered as required by law), no right, title or interest in an immovable property can be transferred," the bench said. registered sale deeds. Following are taken from Newspaper to further substantiate that PA cannot sell the property This news published in Business Standard  in March 2017 Why you must use special power of attorney in property matters http://www.business-standard.com/article/economy-policy/why-you-must-use-special-power-of-attorney-in-property-matters-117050700796_1.html Despite the Supreme Court (SC) coming down heavily on misuse of the power of attorney (PoA) and clarifying its relevance, it continues to be misused. When Dhruv Rawat was looking for a house, an agent showed him a flat that was sold by the government through a lottery three years earlier. While it was cheaper, there was a problem. The owner was not allowed to sell it for another two years. The agent suggested an easy way out: The owner gives Rawat an irrevocable power of attorney. When Rawat consulted a lawyer, he was advised against the deal. “As there was a rampant misuse of general power of attorney (GPA), the SC had clarified that the instrument does not give ownership title to the holder,” says Hormuz Mehta, partner, J Sagar Associates. This means the holder of a GPA cannot sell the property on behalf of the original owner (donor of the PoA). Misconceptions: Many individuals traditionally used GPA in a property transaction to avoid paying stamp duty and registration. There has been a misconception that the GPA gives them ownership rights. But, if there’s a dispute, the GPA holder could lose his rights to the property, based on the apex court’s judgment, according to lawyers. The GPA essentially means the holder is an agent of the donor. Explains Radhika Dudhat Pereira, partner at Shardul Amarchand Mangaldas: “Depending on the specifics of the GPA, the holder can represent the donor in court, at a bank, or any other institution. He can apply for permissions at various authorities. It’s similar to a letter of authority to undertake specific acts on behalf of the donor. But it does not allow the holder to create interest of any nature - for which a special power of attorney will be necessary.” GPA is commonly used by non-resident Indians (NRIs). They authorise a person on their behalf to take care of various matters back home. It could be for representing the owner in society meetings or dealing with banks and other financial institutions. To make it a valid legal document, a GPA needs to be stamped and signed by a notary. “Clarity is still needed on whether GPA continues to exist after death of the donor or ceases as a valid legal document. Various high courts have taken different views on this,” says Mehta of J Sagar Associates. PoA for immovable property: In real estate-related matters, a specific or special power of attorney (SPA) needs to be compulsorily registered to give it legal sanctity. The stamp duty on this SPA varies depending on whether the SPA is given to a relative or a third party. Explains Meenakshi Iyer, partner at Advaya Legal: “As per Article 48 of the Maharashtra Stamp Act, the stamp duty payable on a specific PoA authorising to sell or transfer immovable property, without consideration when given to a close relative like parents, siblings, children, etc, shall be Rs 500.” Other states, too, follow a similar procedure, say lawyers. If it is executed in favour of a person other than a close relative, authorising him to transfer (or sell) the immovable property, the stamp duty payable is the same as that on the sale of property. Any PoA granted to a person for sale of an immovable property will have to be compulsorily registered with the applicable sub-registrar of assurances, failing which it cannot be put to use. The stamp duty is collected at the time of registration of SPA to fill the loophole that existed earlier. In the past, there have been cases where an owner of a property sold it to multiple buyers by giving them power of attorney. When a person searches for titles at a registrar’s office, the ownership of only those properties are reflected on which stamp duty and registration has been paid. Those owners who entered into the transaction based on PoA, later found out that many other claiming a stake on the property, leading to court cases. Be cautious: In cases like Rawat’s, opting for an SPA can cause trouble to the buyer in the future. There’s already a time restriction imposed by the government. If the buyer still enters into a deal with the house owner through an SPA, and there’s a dispute later, the buyer is likely to lose the case, according to lawyers. The sale would be termed ‘null and void’. Lawyers suggest a property buyer should avoid purchasing houses that have government restrictions on sale. These include state government housing projects and slum redevelopment schemes. Many also buy agricultural land based solely on power of attorney — not advisable, unless the original owner gets the status changed to ‘non-agricultural’. In property matters, always consult a lawyer before giving a PoA or becoming a holder. No property sale on power of attorney: Supreme Court The court rules that transfer through general power of attorney cannot give ownesrship title to the buyer. Published in India Today on Oct 13 2011 http://indiatoday.intoday.in/story/property-sale-through-gpa-not-valid/1/154711.html Property sales through the common practice of general power of attorney (GPA) will not give ownership title to the buyer. In a landmark judgment that is expected to send a large number of property owners into a tizzy, the Supreme Court held that the GPA method of immovable property sales is not a valid form of transfer of property. A three-judge bench presided over by Justice R. V. Raveendran said that property can be lawfully transferred only through registered sale deeds. "A power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property," the bench said, after interpreting various provisions of the law concerning property sales. However, the bench said the judgment will not affect "genuine transactions" under the GPA. The judgment delivered on Wednesday would have an impact on both freehold and leasehold properties and affect the mode of transfer of property in Delhi and the National Capital Region (NCR) where GPA sales are very common. Even though it can cause some hardship to those who have already purchased property through the GPA, the order will help curb evasion of duties, flow of black money into real estate and also save people from being cheated by unscrupulous owners selling the same property to several people. Navin Raheja, chairman and managing director of Raheja Developers said, "The court's decision will help to curb the circulation of black money to some extent in the real estate sector where titles are manipulated. Besides, many property transactions where prices are rounded off will be affected. However, overall there won't be any significant impact on normal property sales." The apex court said there can be no mutation of property in municipal and revenue records on the basis of such documents. The bench, however, clarified that its order should not be a ground for disturbing mutations already effected by the Delhi Development Authority (DDA) or any other authority. But, there is little relief for thousands of people who hold property without mutation as GPA sales can only be treated as existing sale agreements. An application of the order with prospective effect would have protected their interest. The court, though, stressed that it had merely reiterated the well- settled legal position that such transactions cannot be treated as completed transfers. The court could not make the order applicable with prospective effect as it had not laid down any new law. However, it said that those who had already bought property through GPA before its judgment could use the documents to apply for regularisation of allotments and leases by development authorities. "Nothing prevents affected parties from getting registered deeds of conveyance to complete their title. The said transactions may also be used to obtain specific performance or to defend possession under section 53A of TP (Transfer of Property) Act," the court said. In order to ensure that GPA continues to serve its purpose, the court said its judgment will not affect the validity of sale agreements and powers of attorney executed in genuine transactions. "For example, a person may give a power of attorney to his spouse, son, daughter, brother, sister or a relative to manage his affairs or to execute a deed of conveyance." The court further said that a person can enter into a development agreement with a land developer or builder for developing the land either by forming plots or by constructing apartment buildings. In that connection he can execute an agreement of sale and grant a power of attorney that will allow the developer to further sell the property to prospective purchasers. While hearing a matter on the subject, the court had decided to clarify the law on the issue as such transfers had not only led to evasion of stamp duty and registration charges but had also provided scope for investing black money in real estate. Besides, such transfers were giving nightmares to bona fide purchasers as the same property could be sold to several people in the absence of verification or certification of title. A proper verification of ownership was possible only if all property were transferred through registered sale deeds. Noting that such transactions were now not just limited to Delhi but had spread to neighbouring areas, the court had sought the views of the Centre and the states of Delhi, Haryana, Punjab and Uttar Pradesh. There was a near unanimity that such transactions should be discouraged as it caused loss of revenue and increased litigation due to defective titles. Going into the legality of such transfers, the court said any contract of sale which was not a registered sale deed would fall short of the requirements of the relevant provisions of the Transfer of Property Act and could not confer any title. The court said a transfer of property by way of sale could only be by a sale deed. "In the absence of a deed of conveyance (duly stamped and registered as required by law), no right, title or interest in an immovable property can be transferred," the bench said. Can’t use PoA to transfer rights of immovable property It can’t be used to transfer any right, title or interest in an immovable property Published in LIVEmint in in 01.06.2015 My mother has a flat in Mumbai. She had given me power of attorney (PoA) three years ago so that I could sell the property on her behalf. The general power of attorney (GPA) is not registered. If the GPA is registered, can I sell the property? —Jayesh Mathur A PoA is a formal arrangement by which one person (donor-principal) gives another person (the attorney-agent) authority to act on his behalf and in his name. Every act performed by the attorney within the authority of the PoA is legally binding on the person granting it. PoAs can be of two types: special power of attorney (SPA) and general power of attorney. An SPA is used for a specific transaction and authorizes the agent to act on behalf of the principal for a specific purpose. And the GPA gives the agent broad powers to act on behalf of the principal. It covers more than one subject matter and normally gives the agent the right to conduct financial and legal affairs on behalf of the principal, including the right to buy and sell property, liquidate bank accounts and so on. It may be pointed out that a PoA is not an instrument of transfer with regard to any right, title or interest in an immovable property. Even an irrevocable PoA does not have the effect of transferring title to the grantee. An attorney holder may, however, execute a deed of conveyance in exercise of the power granted under the PoA and convey title on behalf of the grantor. The Registration (Maharashtra Amendment) Act, 2010, effective from 1 April 2013, has resulted in amendment of section 17 of the Registration Act, 1908, in its application to the State of Maharashtra. As per these amendments, an irrevocable PoA relating to transfer of immovable property in any way, executed on and after the commencement of the Registration (Maharashtra Amendment) Act, 2010, shall be compulsorily registrable. Thus, any PoA granted to a person for sale of immovable property will have to be registered with the applicable sub-registrar of assurances, failing which it cannot be put to use. Hence, you can sell the property only if you have a registered PoA. However, the relevant sub-registrar may not allow the sale of immovable property through a GPA and may insist on a specific PoA for the sale. Further, it is advisable to mention the details of the property in respect of which the PoA is to be utilized. According to article 48 of the Maharashtra Stamp Act, the stamp duty payable on a PoA, not being a proxy, when authorizing to sell or transfer immovable property, without consideration or without showing any consideration as the case may be, if given to the father, mother, brother, sister, wife, husband, daughter, son, grandson, grand-daughter or father, mother, brother or sister of the spouse, shall be Rs.500. If it is executed in favour of a person other than a close relative, authorizing her to sell or transfer the immovable property, the stamp duty payable is the same as that on the sale of property. http://www.livemint.com/Money/v8j4TdyD5DhDVnhCHWH8KK/Cant-use-PoA-to-transfer-rights-of-immovable-property.html Transferring an Employee frequently does not solve any problem, rather it aggravates the problem not only for the employee but for the bank too. In this regard a good write up was published in Hindu Business line a few months ago.  Stop transferring bank employees    January 11, 2017 21:28 IST | Rajkamal Rao Beginning in 2017, India’s banks must adopt two bold policies to improve customer service. First, eliminate the employee transfer madness and offer to return employees working away from their home locations a chance to return home. The goodwill that this creates among bank employees can be a powerful motivator to help improve customer relations.  Transfers must be limited to special cases, such as lending a particular employee’s expertise for a brief period to solve a distant branch’s problems. This would bring the concept of the “account manager” - long used in direct sales and the brokerage business - to everyday bank employees. Second, banks should institutionalise a radically new performance management system in which customer service is rated higher than all other attributes. Have you ever received a call from a bank manager about how a particular employee solved a particularly difficult problem? Because of such a glaring omission in the appraisal process, bank employees have little incentive to please a customer other than do so out of the goodness of their hearts. It is only when a customer can vote on the level of service received from individual employees when employees have strong incentives to excel. India’s economy is going through major structural changes in money, banking and taxes. The time to innovate and guide customers through all these changes is now. We must stop treating civilian employees like military officers and put an end to needless transfers. Read full article in following link Link TO Business Line