Agreement, Power of Attorney and Registered Will do not confer title; sale deed required, Supreme Court holds

A bench of Justice Aravind Kumar and Justice Sandeep Mehta heard an appeal by the defendant challenging the Delhi High Court’s dismissal of Regular First Appeal No. 358/2000 against a trial court decree that had granted possession, mesne profits, declaration and mandatory injunction to the plaintiff. The dispute concerned whether documents dated 16.05.1996 — an Agreement to Sell, a General Power of Attorney, an affidavit, a receipt and a registered Will — conferred title in respect of a residential property formerly owned by the parties’ father.

The Court allowed the appeal, set aside the impugned High Court judgment and dismissed the plaintiff’s suit. It held that the impugned documents did not transfer ownership and that title could pass only by a duly stamped and registered deed of conveyance. The Court emphasised that Section 54 of the Transfer of Property Act required a registered instrument for sale of immovable property of value above Rs.100 and that an agreement for sale or power of attorney could not, “of itself, create any interest in, or charge on, the property.” The Court, in its reasoning, observed: “It is thus clear that a transfer of immovable property by way of sale can only be by a deed of conveyance (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.” The Court further noted that “the mere fact that the Will was registered will not grant validity to the document,” and that Section 53A (part performance) could not be invoked where the alleged transferee was not in possession.

Background The suit property (No. 563, Ambedkar Basti, Delhi) originally belonged to Shri Kundan Lal. The plaintiff asserted that he acquired title by a package of documents dated 16.05.1996 and a registered Will. The defendant (his brother) counterclaimed, alleging an oral transfer in 1973 and that the documents were null and void. The trial court upheld the plaintiff’s documents and decreed the suit; the counterclaim failed. The Delhi High Court dismissed the defendant’s appeal, relying on precedent later questioned by this Court. After an earlier Supreme Court interim order and partial hearing, the matter was remitted to the High Court for fresh consideration in the light of the decision in Suraj Lamp & Industries (which clarified that Agreements, GPAs and Wills are not transfers under the TP Act). On rehearing, the High Court again dismissed the appeal on 09.04.2012. The defendant appealed to this Court.

The Supreme Court analysed the legal character of each instrument. It held that an agreement to sell is only a contract for sale and does not itself effect transfer of ownership; it merely entitles the purchaser to seek specific performance. A General Power of Attorney was characterised as an agency instrument which did not ipso facto transfer title. The registered Will was held not to have been proved in accordance with Section 63 of the Indian Succession Act and Section 68 of the Evidence Act; the Court observed suspicious circumstances surrounding the Will and noted that registration alone did not validate it. On Section 53A, the Court found no possession by the plaintiff and therefore declined to apply the doctrine of part performance. The Court recorded that Respondent No.2, who had purchased half the property from the appellant, would have his rights protected only to the extent of the appellant’s share; contentions between parties on other aspects were left open for resolution in accordance with law. The appeal was allowed, the impugned judgment set aside, the plaintiff’s suit dismissed, and no costs were awarded. Pending applications were consigned to record.

Case No.: CIVIL APPEAL NO. 6377 OF 2012 Case Title: Ramesh Chand (D) THR. LRS. v. Suresh Chand and Anr. Appearances: For the Petitioner(s): Mr. S. Mahendran, Learned Counsel for Defendant No.1 (Appellant) For the Respondent(s): Mrs. Rekha Pandey, Learned Counsel for Respondent No.2; Respondent No.1 (Plaintiff) was duly served but did not appear (proceeded ex parte).