NOTE ON WHERTHER TRANSFER OF IMMOVABLE PROPERTY THROGH GPA

IS VALID OR NOT
Property sales through the common practice of general power of attorney (GPA) will not give
ownership title to the buyer. The Supreme Court held in Shri Ramesh Chandra v. Suresh
Chandra & Anr. Case that the GPA method of immovable property sales is not a valid
form of transfer of property. The Court said that property can be lawfully transferred
only through registered sale deeds.

"A power of attorney is not an instrument of transfer in regard to any right, title or interest in
an immovable property," the bench said, after interpreting various provisions of the law
concerning property sales. However, the bench said the judgment will not affect "genuine
transactions" under the GPA.
The judgment delivered had an impact on both freehold and leasehold properties and affect
the mode of transfer of property in Delhi and the National Capital Region (NCR) where GPA
sales are very common. The order will help curb evasion of duties, flow of black money into
real estate and also save people from being cheated by unscrupulous owners selling the same
property to several people.
The apex court said there can be no mutation of property in municipal and revenue records on
the basis of such documents. The bench clarified that the order should not be a ground for
disturbing mutations already effected by the Delhi Development Authority (DDA) or any
other authority.
The court said that those who had already bought property through GPA before its judgment
could use the documents to apply for regularisation of allotments and leases by development
authorities.
The Court said "Nothing prevents affected parties from getting registered deeds of
conveyance to complete their title. The said transactions may also be used to obtain specific
performance or to defend possession under section 53A of TP (Transfer of Property) Act".
The court said its judgment will not affect the validity of sale agreements and powers of
attorney executed in genuine transactions. "For example, a person may give a power of
attorney to his spouse, son, daughter, brother, sister or a relative to manage his affairs
or to execute a deed of conveyance."
The court said a transfer of property by way of sale could only be by a sale deed. In the
absence of a deed of conveyance (duly stamped and registered as required by law), no right,
title or interest in an immovable property can be transferred.

Section 122 of the Transfer of Property Act, a immovable property can be transferred
through a gift deed. Like a sale deed, a gift deed contains details of the property, the
transferred and recipient. But instead of a sale consideration in a sale deed, a gift deed allows
you to transfer ownership without any exchange of money. Registering a gift deed with the
sub-registrar is mandatory as per section 17 of the Registration Act, and as per section 123 of
the Transfer of Property Act if registration is not done then the transfer will be invalid.
CHARGES FOR REGISTRATION OF GIFT DEED
Stamp duty and registration fee has to be paid to register a gift deed. In some states, stamp
duty rates for property transfer by way of gift is the same as for sale or conveyance deed.

However, rules vary across states; certain state governments even offer some
concession if the property is being gifted to blood relatives.

In Delhi, the stamp duty in case of property transfer by way of sale or gift deed is
the same4% for women and 6% for men. In case of a gift deed, the rate is the
same if the property is being gifted to a non-family member. If recipient is a
family member, then only 0.5% of the market value of the property has to be paid as
stamp duty.

Registration fee is 1% of the total value of consideration and Rs. 100 for pasting
charges.

Both donor and donee has to be present in the registrars office along with
identification document i.e. PAN Card, Election Card, Driving licence etc.

Two witnesses along with identification document has to be present before Sub
Registrar for registration of gift deed.

STAMP DUTY CHARGES FOR REGISRATION OF SALE DEED

Registration procedure takes place at the Sub registrar offices with complete record
details. Stamp duty charges in Delhi are 6% for male and 5% for joint male and
female and only 4% for females.

Registration fee is 1% of the total value of consideration and Rs. 100 for pasting
charges through bank payable order.

Stamp Duty on Sale Deed is payable as per the Circle rates fixed by Revenue
Department of govt. of NCT of Delhi for the locality in which the property is situated.
If sale consideration is more than the minimum circle rates fixed by the govt., then the
stamp duty will be calculated on sale deed consideration amount mentioned in sale
deed.

Both vender and vendee has to be present along with their two passport size
photographs and identification documents i.e., AADHAR Card and PAN Card.

Two witnesses along with identification document has to be present before Sub
Registrar for registration of Sale Deed.

If Sale consideration exceeds 50 lakhs, the buyer has to deduct TDS at the rate 1% of
the sale consideration.