SC bars property sales through power of attorney

In a verdict aimed at discouraging loss of revenue to the exchequer, the Supreme Court on Wednesday ruled that no immovable property can be legally transferred or conveyed through a general power of attorney, sale agreement or will.

In a verdict aimed at discouraging loss of revenue to the exchequer, the Supreme Court on Wednesday ruled that no immovable property can be legally transferred or conveyed through a general power of attorney, sale agreement or will.

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A three-judge bench headed by Justice RV Raveendran said such transfers do no convey the title and do not amount to transfer and cannot be recognised as a valid mode of transfer of immovable property.

"It is time that an end is put to the pernicious practice of a sale agreement through a general power of attorney or a will transaction - known as GPA (general power of attorney) sales," the bench said.

It clarified that its judgment would be applicable prospectively. Holding that immovable property can be legally transferred only through a registered deed of conveyance, the bench advised state governments to reduce their stamp duty rates. This, it said, should be done to prevent undervaluation of property and stashing of black money by vested interests.

The court observed that high stamp duty rates had led to rampant abuse of the GPA, sale agreements and wills.