‘Property can be sold on power of attorney’

In a judgment that will benefit lakhs of Delhi residents living in co-operative housing societies and DDA flats, the Delhi High Court has quashed a Delhi government circular banning property sale in the Capital through general power of attorney (GPA).

In a judgment that will benefit lakhs of Delhi residents living in co-operative housing societies and DDA flats, the Delhi High Court has quashed a Delhi government circular banning property sale in the Capital through general power of attorney (GPA).

HT Image

The court found that the directions in the circular, issued by the revenue department on April 27 last year, were contrary to the Supreme Court judgment dated October 11,

2011.

The HC order will increase the number of saleable properties in Delhi and could bring down the value of freehold properties.

According to realty watchers, on an average, around 20% of properties are registered through GPA transfers — a common way of selling leasehold properties and those that don’t have a clear title.

The judgment came on a petition filed by a company, Pace Developers and Promoters, questioning the validity of the circular and registrar’s refusal to register the sale of a property through GPA.

“The directions contained in the circular are quite contrary to the observations made by the Supreme Court and are set aside. Quite clearly, the Supreme Court has not said that in no case a conveyance can be registered by taking recourse to a GPA. As long as the transaction is genuine, the same will have to be registered by the Sub-Registrar,” said Justice Rajiv Shakdher.

The judge pointed out that the Supreme Court had specifically said that a “person may enter into a development agreement with a land developer or builder for development of a parcel of land or for construction of apartments in a building, and for this purpose a power of attorney empowering the developer to execute sale agreements can be executed”.

The controversial circular had not only made future sale of properties difficult, but its retrospective nature also invalidated the sale of thousands of properties across the Capital made after the date of apex court ruling. It forced the owners to register the transfers afresh with complete documents and a clear sale deed.

Agreeing with the argument by the builder’s counsel Rajiv Dutta, the court said the revenue department had “completely misconstrued” the apex court judgment by issuing an “across the board” directive to all registrars and sub-registrars not to register any sale of an immovable property through power of attorney.

The court found merit in Dutta’s argument that the apex court had only termed those sales through GPA invalid where the buyer and seller were evading registration and payment of stamp duty.