[Landmark Judgement] Ghanshyam V. Yogendra Rathi (2023)

Landmark Judgment Law Insider (1)

Published on: 16 July 2023 at 12:42 IST

Court: Supreme Court 

Citation: Ghanshyam V. Yogendra Rathi (2023)

Honourable Supreme Court of India has held that an agreement to sell cannot be regarded as a transaction of sale or a document transferring the proprietary rights in an immovable property. However the prospective purchaser having performed his part of the contract and lawfully in possession acquires possessory title which is liable to be protected in view of Section 53A of the Transfer of Property Act, 1882 who can prefer Suit for Declaration for ownership of title.

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.

The decisions of the Delhi High Court in the case of Veer Bala Gulati v. Municipal Corporation of Delhi1 following the earlier decision of the Delhi High Court itself in the case of Asha M. Jain v. Canara Bank2 holding 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, are of no help to the plaintiff-respondent inasmuch as the view taken by the Delhi High Court 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 may be had to two other decisions of the Delhi High Court in Imtiaz Ali v. Nasim Ahmed3 and G. Ram v. Delhi Development Authority4 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 is got registered under Section 17 of the Indian Registration Act, 1908. The decision of the Supreme Court in Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana5 also deprecates the transfer of immovable property through sale agreement, general power of attorney and will instead of registered conveyance deed.

Drafted By Abhijit Mishra

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