Supreme Court holds GPA and contemporaneous agreement to sell do not by themselves transfer title; appeals dismissed

A bench of Justices J.B. Pardiwala and R. Mahadevan heard appeals against a Karnataka High Court judgment upholding a trial court decree which had granted permanent injunction to a donee and dismissed a declaratory suit by purchasers who claimed title through a general power of attorney (GPA) and an unregistered agreement to sell. The principal question was whether a GPA executed in 1986, coupled with a contemporaneous agreement to sell, vested the agent with an irrevocable interest under Section 202 of the Indian Contract Act and thereby validated a registered sale deed executed by the agent after the death of the executant.

The Court dismissed the appeals and affirmed the High Court decision. It held that the GPA, on its true construction, did not create a proprietary interest in favour of the attorney and that an agreement to sell or a GPA, even if contemporaneous, could not operate as a mode of transfer of immovable property requiring registration under Section 17 of the Registration Act. The Court reiterated the principle in Suraj Lamp that “transactions of the nature of ‘GPA sales’ or ‘SA/GPA/will transfers’ do not convey title and do not amount to transfer.” The Court, in its reasoning, observed: “Even though the GPA and the agreement to sell were contemporaneous documents executed by the original owner in favour of the same beneficiary, this alone cannot be a factor to reach the conclusion that she had an interest in the POA. If interest had been transferred by way of a written document, it had to be compulsorily registered as per Section 17(1)(b) of the Registration Act. In the absence of such registration, it would not be open for the holder of the POA to contend that she had a valid right, title and interest in the immovable property to execute the registered sale deed in favour of appellant no. 2.”

Background The dispute concerned Site No.10, Sy. No.55/1 at Chunchaghatta, Bengaluru South Taluk. The original owner, Muniyappa @ Ruttappa, executed on 4 April 1986 a document titled “General Power of Attorney” in favour of A. Saraswathi and an unregistered agreement to sell for a stated consideration. The GPA recited broad powers, was styled “irrevocable”, and identified the scheduled property. The executant died on 30 January 1997. The GPA-holder executed a registered sale deed on 1 April 1998 in favour of her son (appellant no.2) for a higher consideration. Separately, the legal heirs of the original owner executed a registered sale deed dated 21 March 2003 in favour of a third party who then sold the property to another purchaser; that purchaser thereafter gifted the property to the plaintiff who sued for permanent injunction (O.S. No.133/2007). Appellant no.2 filed O.S. No.4045/2008 for declaration and possession, challenging the later sale deeds and the gift deed.

The trial court held that the GPA and agreement to sell did not confer title, that the 1998 sale by the GPA-holder was invalid (executed after the executant’s death) and that the respondent donee was in lawful possession; it dismissed the appellants’ suit. The High Court affirmed, framing issues whether the appellant proved absolute ownership and whether the 1998 registered sale deed conveyed title. The High Court found the GPA was not shown to have been “coupled with interest” so as to be irrevocable under Section 202 of the Contract Act; it further relied on the requirement of registration under Section 17 of the Registration Act and on precedents including Suraj Lamp to hold that agreements to sell/GPA transactions do not of themselves transfer title.

The Supreme Court analysed agency law principles and the jurisprudence on irrevocable powers. It reiterated that a power of attorney creates a principal–agent relationship and that an agency becomes irrevocable only where the agent had a proprietary interest or the authority was expressly given to secure such an interest. The Court held the GPA before it did not manifest the required proprietary interest, and that an agreement to sell remained unregistered and therefore could not affect immovable property as a transfer under Section 17/49 of the Registration Act. Applying settled precedent, the Court concluded that the High Court committed no error, dismissed the appeals and directed that parties bear their own costs. No interim directions or liberties were recorded beyond the dismissal.

Case Details: Case No.: CIVIL APPEAL NOS. 3266-3267 OF 2025 (ARISING OUT OF SPECIAL LEAVE PETITION (C) NOS. 13618-13619 OF 2020) | 2025 INSC 273 (Reportable) Case Title: M. S. Ananthamurthy & Anr. v. J. Manjula & Ors. Appearances: For the Petitioner(s): Ms. Farhat Jahan Rehmani, Advocate For the Respondent(s): Mr. Mahesh Thakur, Advocate