Sale Agreement/General Power of Attorney - Do not Convey Title - SC
IN a landmark judgement on 11 October, the Supreme Court held that Immovable property can be legally and lawfully transferred/conveyed only by a registered deed of conveyance: Transactions of the nature of 'GPA sales' or 'SA/GPA/WILL transfers' do not convey title and do not amount to transfer, nor can they be recognized or valid mode of transfer of immoveable property. The courts will not treat such transactions as completed or concluded transfers or as conveyances as they neither convey title nor create any interest in an immovable property. They cannot be recognized as deeds of title, except to the limited extent of section 53A of the TP Act. Such transactions cannot be relied upon or made the basis for mutations in Municipal or Revenue Records.
The Supreme Court observed that these kinds of transactions were evolved to avoid prohibitions/conditions regarding certain transfers, to avoid payment of stamp duty and registration charges on deeds of conveyance, to avoid payment of capital gains on transfers, to invest unaccounted money (black money) and to avoid payment of `unearned increases' due to Development Authorities on transfer.
This judgement is sure to have its impact on the real estate sector, especially in the Capital.