Agreement
& GPA WHETHER IT CONFERS title
The Supreme Court has very recently in a matter captioned as
Ghanshyam Vs Yogendra Rathi, Civil Appeal No. 7527-7528/2012 decided on
2nd June 2023 has revisited the scope of General Power of Attorney,
Agreement to sell, Will, Receipt and part performance as per section 53-A and
Section 54 of Transfer of Property act 1882 and the earlier decision of Supreme
Court reported as Suraj Lamp & Industries
Pvt. Ltd. Vs. State of Haryana & Anr 5 (2009) 7 SCC 363 is reinforced and reaffirmed
with specific reference to the context, as referred to above.
The gravamen of the case in Ghanshyam (Supra) was the
implication of agreement to sell, GPA and Will on the possessory rights and
title of the purchaser. The Supreme Court had apart from revisiting Suraj
Lamp (Supra) had also analysed the judgments of Delhi High Court
reported as under:
1.
Veer Bala Gupta Vs Municipal Corporation of Delhi & Anr
(2003) 104 DLT 787;
2.
Asha M Jain Vs Canara Bank & Ors (2001) 94 DLT 841
3.
Imtiaz Ali Vs Nasim Ahmed AIR 1987 Delhi 36
4.
G.Ram Vs DDA AIR 2003 Delhi 120
SECTION 53 –A and 54 of Transfer of Property Act
Before delving on the issue, it may be worthwhile to reproduce
the provisions of Section 53-A and section 54 of Transfer of Property Act 1882
and hence the same are reproduced as under:
53A. Part performance.—Where any person contracts to transfer for consideration
any immoveable property by writing signed by him or on his behalf from which
the terms necessary to constitute the transfer can be ascertained with
reasonable certainty, and the transferee has, in part performance of the
contract, taken possession of the property or any part thereof, or the
transferee, being already in possession, continues in possession in part performance
of the contract and has done some act in furtherance of the contract, and the
transferee has performed or is willing to perform his part of the contract,
then, notwithstanding that where there is an instrument of transfer, that the
transfer has not been completed in the manner prescribed therefore by the law
for the time being in force, the transferor or any person claiming under him
shall be debarred from enforcing against the transferee and persons claiming
under him any right in respect of the property of which the transferee has
taken or continued in possession, other than a right expressly provided by the
terms of the contract: Provided that nothing in this section shall affect the
rights of a transferee for consideration who has no notice of the contract or
of the part performance thereof.]
54. “Sale” defined.—‘‘Sale” is
a transfer of ownership in exchange for a price paid or promised or part-paid
and part-promised. Sale how made.—Such transfer, in the case of tangible
immoveable property of the value of one hundred rupees and upwards, or in the
case of a reversion or other intangible thing, can be made only by a registered
instrument. In the case of tangible immoveable property of a value less than
one hundred rupees, such transfer may be made either by a registered instrument
or by delivery of the property. Delivery of tangible immoveable property takes
place when the seller places the buyer, or such person as he directs, in
possession of the property. Contract for sale.—A contract for the sale of
immoveable property is a contract that a sale of such property shall take place
on terms settled between the parties. It does not, of itself, create any
interest in or charge on such property.
Ghanshyam Vs Yogendra Rathi
The case in Ghanshyam (Supra) is rather interesting.
The plaintiff-respondent had instituted a suit for eviction of the defendant-appellant
from the suit premises and for mesne profits on the premise that he is the
owner of the said property by virtue of an agreement to sell dated 10.04.2002,
power of attorney, a memo of possession and a receipt of payment of sale
consideration as well as a “Will” of the defendant appellant bequeathing the
said property in his favour; the possession of the suit premises was handed
over to the plaintiff-respondent pursuant to the agreement to sell, subsequently.
on the request of the defendant-appellant the plaintiff-respondent allowed the
defendant-appellant to occupy the ground floor and one room on the first floor
of it for a period of 3 months as a licencee; the defendant/appellant failed to
vacate the suit premises despite expiry of the licence period and termination
of licence vide notice dated 18.02.2003.The judgment and decree was passed in
favour of the plaintiff/respondent in the courts below and it was affirmed by
the high court.
The suit was contested on the
premise that the aforesaid documents were manipulated on blank papers, but execution
of that was not disputed nor the factum of memo of possession was disputed. The
sale consideration was admittedly paid. The issues were framed as regards
fraud/manipulation and also regarding the right of the plaintiff-respondent to
get the defendant-appellant evicted and the third with regard to entitlement of
mesne profits. The issues were decided against the defendant/appellant.
Before the Supreme Court,
leave was granted and appeal was admitted on the question as to whether the
above documents namely the power of attorney, the Will, the agreement to sell
coupled with possession memo and the receipt of payment of sale consideration
would confer any title upon the plaintiff-respondent so as to entitle him to a decree
of eviction and mesne profits.
The plaintiff had claimed
ownership on the strength of the aforesaid documents, especially the agreement
to sell and the memo of possession as well as the receipt of payment of sale
consideration. It is no res integra that
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
plaintiff-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. This possessory right of
the plaintiff-respondent is not liable to be disturbed by the transferer, i.e.,
the defendant-appellant. The entry of the defendant-appellant over part of the
suit property subsequently is simply as a licencee of the plaintiff/respondent.
He does not continue to occupy it in capacity of the owner.
Since, a categorical
finding was recorded that the above-mentioned documents have not been fraudulently
obtained or have not been manipulated, and held to be genuinely executed,
hence, plaintiff was held to be in a settled possession of the suit property at
least in part performance of the agreement which cannot be disturbed or
disputed by the transferer, i.e., the defendant-appellant. The possession of plaintiff
therefore could not be disturbed. The defendant was a mere licensee and the
license was already terminated, hence, the defendant/appellant was mandated to
restore the possession to plaintiff.
GPA & WILL
The power of attorney executed by the defendant-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 plaintiff-respondent.
Non-execution of any document by the general power of attorney holder consequent
to it renders the said general power of attorney useless. Similarly, the “Will” executed
by the defendant-appellant in favour of the plaintiff-respondent was held to be
meaningless, since the Will shall come into effect only upon death of testator,
which was not the case here.
The Supreme Court has held in
Ghanshyam (Supra) as under:
“14. 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”.
Supreme Court on Title
of property
The Supreme Court had further held that decisions of Delhi High
Court in Veer Bala Gulati (Supra) and Asha M. Jain (Supra) whereby it was
held that the
agreement to sell with payment of full consideration and possession along with
irrevocable power of attorney and other ancillary documents is a transaction to
sell even though there may not be a sale deed, cannot come to aid of the
plaintiff-respondent inasmuch as the view is not in consonance with the legal
position which emanates from the plain reading of Section 54 of the Transfer of
Property Act, 1882.
In this regard, reference two other decisions of the Delhi High
Court in Imtiaz Ali (Suprqa) and G. Ram (Supra) which inter-alia observe that an agreement
to sell or the power of attorney are not documents of transfer and as such the
right title and interest of an immovable property do not stand transferred by
mere execution of the same unless any document as contemplated under Section 54
of the Transfer of Property Act, 1882, is executed and got registered under Section 17 of the Indian
Registration Act, 1908. The same is the ratio in Suraj Lamp (Supra) and
that has laid down the correct law. In Suraj Lamp (Supra) the transfer of immoveable property through sale agreement,
general power of attorney and Will instead of registered conveyance deed is
deprecated.
Thus, the Supreme Court has returned the finding that an agreement
to sell may not be regarded as a transaction of sale or a document transferring
the proprietary rights in an immovable property as per law, however, the prospective
purchaser having performed his part of the contract and being lawfully in
possession acquires possessory title 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 plaintiff-respondent admittedly was settled with
possessory title in part performance of the agreement to sell and as the
defendant-appellant had already lost his possession over it and had acquired
the right of possession under a licence simpliciter, thus, the defendant/appellant
had no right to continue in possession after the licence was determined. The
defendant/appellant had already parted with the possession of the suit property
by putting the plaintiff-respondent in possession of it under an agreement to
sell and undisputedly, the plaintiff-respondent in this way came to acquire
possessory title over the same. The defendant/appellant, as such, ceased to be
in possession of it as an owner rather occupied it as a licencee for a fixed
period which stood determined by valid notice, leaving the defendant-appellant
with no subsisting right to remain in possession of the suit premises.Thus, the
plaintiff/respondent was rightly held to be entitled for a decree of eviction with mesne
profits.
CONCLUSION
The Supreme Court has therefore reiterated the ratio of Suraj
lamp (Supra) in the most recent judgment of Ghanshyam (Supra). The case
Ghanshyam
(Supra) was rather interesting, in as much as the executants of Agreement to
sell and GPA after handing over possession of property to the defendant and
that too after receiving due consideration was seeking to deprive the plaintiff
his right of possession on the strength of law to the effect that title shall
not be conferred on defendant on account of GPA or agreement to sale, but the
defendant/appellant opted to be oblivious of the fact that possession was
handed over by him and consideration was received from the plaintiff and therefore,
section 53-A of Transfer of Property Act 1882 shall come to the rescue of
plaintiff and the fact that even after the purported sale, if the defendant was
permitted to be in possession of a portion of the suit property for Three (3)
months, the right cannot be extended any further, as he was a mere licensee of
plaintiff. No doubt, the title shall not be conferred on the plaintiff on the strength
of GPA and agreement to sale, still, for the reasons illustrated above and as per
the principles of Section 53-A and Section 54 of Transfer of Property Act 1882,
the possessory rights of plaintiff cannot be disturbed.
--------------
Anil
K Khaware
Founder
& Senior Associate
Societylawandjustice.com
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