Introduction
The Supreme Court has once again ruled that an agreement to sell and a General Power of Attorney (GPA) cannot transfer ownership rights in immovable property. The judgment came in Ramesh Chand Ardawatiya v. Anil Panjwani. The Court reiterated that such documents do not constitute valid conveyance under law. The ruling follows earlier precedents, particularly the Suraj Lamp case, and aims to prevent confusion in property transactions.
Facts of the Case
The dispute revolved around ownership of property. One of the parties, claimed rights on the basis of an agreement to sell coupled with a registered General Power of Attorney. He argued that these documents gave him ownership and authority to deal with the property.
The opposite party, contested this claim. He maintained that no valid sale deed had ever been executed. According to him, mere possession of an agreement to sell and a GPA could not transfer ownership. He insisted that under the law, ownership could pass only through a duly executed and registered sale deed.
The trial court examined the documents. It held that the claimant could not prove ownership because he lacked a registered sale deed. The court noted that while an agreement to sell indicated intention, it did not by itself create title. The GPA also did not confer ownership.
On appeal, the matter went before the higher courts. The appellate courts upheld the trial court’s findings. They stressed that conveyance of property requires strict compliance with the Transfer of Property Act and the Registration Act. Dissatisfied, the party claiming ownership approached the Supreme Court.
What the Court Says
The Supreme Court carefully analyzed the documents. It reiterated the settled principle that an agreement to sell does not create ownership rights in immovable property. It only reflects a promise or intention to transfer in the future. Ownership passes only through a registered sale deed.
The Court also examined the scope of a GPA. A General Power of Attorney allows an agent to act on behalf of the principal. However, it does not by itself transfer title. Even a registered GPA is merely an authorization document, not a deed of ownership.
The Court strongly relied on its earlier ruling in Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana (2011). In that landmark case, the Court had categorically declared that property sales through GPA are not valid transfers. The Court in the present case reaffirmed that only a registered conveyance deed, executed in accordance with law, can pass ownership.
The Court observed that parties often use GPA sales to avoid stamp duty and registration charges. Such methods, it said, undermine the law and lead to uncertainty in property rights. It stressed that courts must discourage such practices. Ownership, it said, cannot depend on informal arrangements but must rest on proper legal documentation.
The Court also clarified that an agreement to sell, though not transferring ownership, still carries some legal weight. It can give the buyer the right to seek specific performance, compelling the seller to execute a proper sale deed. But until such a deed is executed and registered, the buyer remains without ownership rights.
Implications
The ruling has significant implications for property transactions across India. First, it reinforces the position that no one can claim ownership based on GPA sales. People relying on agreements to sell and GPA documents will find their claims rejected unless backed by a valid registered sale deed.
Second, the decision will directly affect pending disputes where ownership claims rest on such informal transactions. Courts will now have stronger grounds to dismiss such claims.
Third, the judgment protects buyers from fraudulent or deceptive practices. Unscrupulous sellers often misuse GPA sales to create multiple claims over the same property. By insisting on registered conveyance deeds, the Court ensures greater certainty in property rights.
Finally, the judgment closes the door for ambiguity. With repeated emphasis on the Suraj Lamp precedent, the Court has now firmly established that informal property transactions have no legal standing.
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Conclusion
The Supreme Court’s ruling in Ramesh Chand Ardawatiya v. Anil Panjwani reiterates that an agreement to sell and a General Power of Attorney cannot confer ownership in immovable property. Only a registered sale deed executed under the law can create valid title. The decision not only clarifies the legal position but also secures the property market against uncertainty, fraud, and revenue loss. It reminds buyers and sellers that property transactions must follow the law strictly.
