SURAJ LAMP & INDUSTRIES PVT. LTD.versusSTATE OF HARYANA & ANR.

                        [2011) 11 S.C.R. 848


A            SURAJ LAMP & INDUSTRIES Pvt."LTD.
                                  v.
                   STATE OF HARYANA & ANR.
          (Special Leave Petition (C) No. 13917 of 2009)

B                       OCTOBER 11, 2011.
        [R.V. RAVEENDRAN, A. K. PATNAIK AND H. L.
                     GOKHALE, JJ.]

        Transfer of property:
c
         Transactions under Sale Agreement/Genera/ Power of
  Attorney/ Will (SA/GPA/Will) - HELD: Immovable property
  can be legally and lawfully transferred/conveyed 9nly by a
  registered deed of conveyance - Courts will not treat
o transactions of the nature of 'GPA sales' or 'SA/GPA/Will
  transfers' as completed or concluded tr,ansfers or as
  conveyances, since they neither convey title nor do they create
  any interest in an immovable property - Such· transactions
  cannot be recognized as valid mode of ·transfer of·
E immoveable property - They cannot be recognized as deeds
  of title, except to the limited extent of s. 53A of the TP Act nor
  can they be relied upon or made the basis for mutations in
  Municipal or revenue records - It is time that an end is put to
  the pernicious practice of SA/GPA/Will transactions known as
F GPA sales - Directions given as regards SAIGPAs/Wills
  entered before the date of the instant judgment - Transfer of
  Property Act, 1882 - ss. 5, 53, 53-A, 54 and 55 - Power of
  Attorney Act, 1882 - ss. 1-A and 2- Succession Act, 1925-
  ss. 69 and 70 - Stamp Act, 1899 - ss. 23 and 27 -
  Registration Act, 1908 - ss. 17 and 49.
G
         Deeds and Documents:
         Sale agreement/General Power of Attorney/Will - Scope
    of - Advantages of registration of documents which purport
H                                848
     SURAJ LAMP & INDUSTRIES PVT. LTD. v. STATE                           849
               OF HARYANA & ANR.
or operate to create, declare, assign, limit or extinguish any                    A
right title or interest - Explained.

       In· Suraj Lamp and Industries Pvt. Ltd.1, the Supreme
 Court pointing out ill-effects of transfer of immovable
 property under Sale Agreements/General Power of
                                                              8
 Attorney/Will ('SA/GPA/ Will transfers), asked the Solicitor
·General to give suggestions on behalf of the Union of
 India. The Court also directed notice to issue to the States
 of Delhi, Haryana, Punjab and Uttar Pradesh to give their
 views on the matter. All the four States responded and
 confirmed that 'SA/GPA/Will transfers' were required to be C
 discouraged as they led to loss of revenue and increase
 in litigation due to defective title.

     Directing the special leave petition to be listed for
final disposal, the Court                                                         D

     HELD: 1.1. When parties resort to 'SA/GPA/Will
transfers', the adverse effect is not only loss of revenue
(stamp duty and registration charges) but the greater
danger of generation of 'black' money. These                                      E
transactions are not to be confused or equated with
genuine transactions where the owner of a property
grants a power of Attorney in favour of a family member
or friend to manage or sell his property, as he is not able
to manage the property or execute the sale, personally.
These are transactions, where a purchaser pays the full                           F
price, but instead of getting a deed of conveyance gets
a SA/GPA/WILL as a mode of transfer, either at the
instance of the vendor or at his own instance. [paras 2
and 5] [855-F-H; 858-F-G]
                                                                                  G
    1.2. A high rate of stamp duty acts as a damper for
execution of deeds of conveyance for full value and
encourages SA/GPA/Will transfers. Reducing the stamp
1.    Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana & Anr. 2009 (7) SCC
     ~3.                                                                          H
    850    SUPREME COURT REPORTS              [2011] 11 S.C.R.


A duty on conveyance to realistic levels will encourage
  public to disclose the maximum sale value and have the
  sale deeds registered. Though the reduction of the stamp
  duty, may result in an immediate reduction in the revenue
  by way of stamp duty, in the long run it will be
B advantageous for two reasons: (i) parties will be
  encouraged to execute registered deeds of conveyance/
  sale deeds without any under valuation, instead of
  entering into SA/GPA/WILL transactions; and (ii) more and
  more sale transactions will be done by way of duly
C registered sale deeds, disclosing the entire sale
  consideration thereby reducing the generation of black
  money to a large extent. Registration of documents also
  makes the process of verification and certification of title
  easier and simpler. Further, it reduces disputes and
o litigations to a large extent. [para 5 and 10] [858-F-H; 859-
  A-B; 864-A]

    Scope of Agreement of sale:

      2.1. Section 54 of TP Act makes it clear that a contract
E of sale, that is, an agreement of sale, does not, of itself,
  create any interest in or charge on such property. A
  transfer of immoveable 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
F as required by law), no right, title or interest in an
  immoveable property can be transferred. Any contract of
  sale (agreement to sell) which is not a registered deed of
  conveyance (deed of sale) would fall short of the
  requirements of ss. 54 and 55 of TP Act and will not
G confer any title nor transfer any interest in an immovable
  property (except to the limited right granted under section
  53A of TP Act). According to TP Act, an agreement of sale,
  whether with possession or without possession, is not
  a conveyance. [para 11-12] [864-B-C; 865-B-E]
H
 SURAJ LAMP & INDUSTRIES PVT. LTD. v. STATE             851
            OF HARYANA & ANR.
     Narandas Karsondas v. S.A. Kamtam and Anr. 1977          A
(2) SCR 341 = (1977) 3 SCC 247; Rambhau Namdeo Gajre
v. Narayan Bapuji Dhotra 2004 (3) Suppl. SCR 817 = 2004
(8) sec 614 - relied on.
Scope of Power of Attorney:
                                                              B
      2.2. A power of attorney is not an instrument of
transfer in regard to any right, title or interest in an
immovable property. It is creation of an agency whereby
the grantor authorizes the grantee to do the acts
specified therein, on behalf of grantor, which when           C
executed will be binding on the grantor as if done by him
(ss.1 A and 2 of the Powers of Attorney Act, 1882). It is
revocable or terminable at any time unless it is made
irrevocable in a manner known to law. Even an
irrevocable power of attorney does not have the effect of     D
transferring title to the grantee. An attorney holder may
however execute a deed of conveyance in exercise of the
power granted under the power of attorney and convey
title on behalf of the grantor. [para 13] [865-F-H; 866-F]

   State of Rajasthan vs. Basant Nehata - 2005 (3) Suppl.     E
SCR 1 =2005 (12) sec 77 - relied on.
Scope of Will:

     2.3. A will is the testament of the testator. It is a F
posthumous disposition of the estate of the testator
directing distribution of his estate upon his death. It is not
a transfer inter vivos. The two essential characteristics of
a will are that it is intended to come into effect only after
the death of the testator and is revocable at any time G
during the life time of the testator. If the testator, who is
not married, marries after making the will, by operation
of law, the will stands revoked. (ss.69 and 70 of
Succession Act, 1925). Registration of a will does not
make it any more effective. [para 14] [866-G-H; 867-A-B]
                                                               H
     852     SUPREME COURT REPORTS             [2011] 11 S.C.R.


·A     2.4; Therefore, a SA/GPA/WILL transaction does not
  convey any title nor create· any interest in an immovable
  property. The observations by the Delhi High Court, in
  Asha M. Jain's case*, while dealing with transactions by
  way of SA/GPA/WILL, that the "concept of power of
B attorney sales have been recognized as a mode of
  tra.nsaction" are unwarranted and not justified,
  unintendedly misleading the general public into thinking
  that SA/GPA/Will transactions are some kind of a
  recognized or accepted mode of transfer and that it can
c be a valid substitute for a sale deed. Such decisions to
  the extent they recognize or accept SA/GPA/WILL
  transactions as concluded transfers, as contrasted from
  an agreement to transfer, are not good law. [para 15] [867-
  C-E]
D        *Asha M. Jain v. Canara Bank - 94 (2001) DLT 841 -
     disapproved.
          2.5. Immovable property can be legally and lawfully
     transferred/conveyed only by a registered deed of
E    conveyance. Transactions of the nature of 'GPA sales' or
     'SA/GPA/WILL transfers' do not convey title and do not
     amount to transfer, nor can they be recognized as valid
     mode of transfer of immoveable property. The courts will
     not treat such transactions as completed or concluded
F    transfers or as conveyances, as they neither convey title
     nor create any interest in an immovable property. They
     cannot be recognized as deeds of title, except to the
     limited extent of s. 53A of the TP Act. Such transactions
     cannot be relied upon or made the basis for mutations
     in Municipal or Revenue Records. This will apply not
G    only to deeds of conveyance in· regard to freehold
     property but also to transfer of leasehold property. A
     lease can be validly transferred only under a registered
     Assignment of Lease. It is time that an end is put to the ·
     pernicious practice of SA/GPA/WILL transactions known
H    as GPA sales. [para 161 [867-F-H; 868-A]
 SURAJ LAMP & INDUSTRIES PVT. LTD. v. STATE              853
           OF HARYANA & ANR.

     2.6. SA/GPA/WILL transactions can continue to. be          A
treated as existing· agreement of sale. Parties concerned
may get registered the deeds of conveyance to.complete
their title. The. 'SA/GPA/WILL transactions' may also· be
used to obtain specific performance or to defend
possession u/s 53A of TP Act. If they are entered before        B
this day, they may be ·relied upon to apply for
regularization of allotments/leases by Development
Authorities. It is made clear that if the documents' relating
to 'SA/GPA/WILL transactions' have been accepted and
acted upon by ODA or other developmental authorities            C
or by the Municipal or revenue authorities to effect
mutation, they need not be disturbed, merely on account
of this decision. [para 18] [868-D-F]

    2.7. The observations in this judgment are not D
intended to, in any way, affect the validity of sale
agreements and powers of attorney executed in genuine
transactions. In several States, the execution ·of
development agreements and powers of attorney are
already regulated by law and subjected to specific stamp
duty. The observations regarding 'SA/GPA/Will E
transactions' are not intended to apply to such bonafide/
genuine transactions. [para 19] [868-G-H; 869-A-B]

                     Case Law Reference:
     2009 (7) sec 363             relied on       para 1        F

    1977 ( 2 ) SCR 341            relied on       para 11
     2004 (3 ) Suppl. SCR 817 relied on           para 11
    2005 (3 ) Suppl. SCR 1        relied on       para 13       G
    94 (2001) DLT 841             disapproved     para 15
    CIVIL APPELLATE JURISDICTION: Petition for Special
Leave (Civil) No. 13917 of 2009.
                                                                H
    854      SUPREME COURT REPORTS                [2011] 11 S.C.R.


A        From the Judgment & Order dated 25.11.2008 of the High
    Court of Punjab and Hayana at Chandigarh in CWP No. 19864
    of 2008.

        Gopal Subramanium, Jayant Kumar Mehta, Sukant Vikram
8   and Rishi Raj Saxena for the Petitioner.

          Shail Kumar Dwivedi, AAG, Ajay Pal, Anil Katiyar, S.N.
    Pandey, Gunnam Venkateswara Rao, Ashutosh Sharma, Aviral
    Shukla, Abhinav Srivastava, Lakshmi Raman Singh, Kuldip
    Singh, Satish Hooda, Kamal Mohan Gupta and Vineet Bhagat
C   for the Respondents.

          The Judgment of the Court was delivered

         R. V. RAVEENDRAN J. 1. By an earlier order dated
   15.5.2009 [reported in Suraj Lamp & Industries Pvt.Ltd. vs.
0
   State of Haryana & Anr. - 2009 (7) SCC 363], we had referred
   to the ill - effects of what is known as General Power of Attorney
   Sa/es (for short 'GPA Sales') or Sale Agreement/General
   Power of Attorney/Will transfers (for short 'SA/GPA/WILL'
   transfers). Both the descriptions are misnomers as there cannot
E be a sale by execution of a power of attorney nor can there be
   a transfer by execution of an agreement of sale and a power
   of attorney and will. As noticed in the earlier order, these kinds
   of transactions were evolved to avoid prohibitions/conditions
   regarding certain transfers, to avoid payment of stamp duty and
F registration charges on deeds of conveyance, to avoid payment
  ·of capital gains on transfers, to invest unaccounted money
   ('black money') and to avoid payment of 'unearned increases'
   due to Development Authorities on transfer.

G        2. The modus operandi in such SA/GPA/WILL
    transactions is for the vendor or person claiming to be the
    owner to receive the agreed consideration, deliver possession
    of the property to the purchaser and execute the following
    documents or variations thereof:
H
  SURAJ LAMP & INDUSTRIES PVT. LTD. v. STATE               855
   OF HARYANA & ANR. [R.V. RAVEENDRAN, J.]

    (a) An Agreement of sale by the vendor in favour of the       A
    purchaser confirming the terms of sale, delivery of
    possession and payment of full consideration and
    undertaking to execute any document as and when
    required in future.
                                                                  B
                              Or

    An agreement of sale agreeing to sell the property, with a
    separate affidavit confirming receipt of full price and
    delivery of possession and undertaking to execute sale
    deed whenever required.                                       c
    (b) An Irrevocable General Power of Attorney by the vendor
    in favour of the purchaser or his nominee authorizing him
    to manage, deal with and dispose of the property without
    reference to the vendor.                                      D
                              Or

   . A General Power of Attorney by the vendor in favour of the
     purchaser or his nominee authorizing the attorney holder
     to sell or transfer the property and a Special Power of      E
     Attorney to manage the property.

    (c) A will bequeathing the property to the purchaser (as a
    safeguard against the consequences of death of the
    vendor before transfer is effected).
                                                                  F
These transactions are not to be confused or equated with
genuine transactions where the owner of a property grants a
power of Attorney in favour of a family member or friend to
manage or sell his property, as he is not able to manage the
property or execute the sale, personally. These are transactions, G
where a purchaser pays the full price, but instead of getting a
deed of conveyance gets a SA/GPA/WILL as a mode of
transfer, either at the instance of the vendor or at his own
instance.
                                                                  H
    856          SUPREME COURT REPORTS               [2011] 11 S.C.R.


A   Ill-Effects of SA/GPA/WILL transactions

          3. The earlier order dated 15.5.2009, noted the ill-effects
    of such SA/GPA/WILL transactions (that is generation of black
    money, growth of land mafia and criminalization of civil
    disputes) as under:
8
          "Recourse to 'SA/GPA/WILL' transactions is taken in
          regard to freehold· properties, even when there is no bar
          or prohibition regarding transfer or conveyance of such
          property, by the following categories of persons:
c
           (a)    Vendors with imperfect title who cannot or do not
                  want to execute registered deeds of conveyance.

           (b)    Purchasers who want to invest undisclosed wealth/
                  income in immovable properties without any public
D                 record of the transactions. The process enables
                  them to hold any number of properties without
                  disclosing them as assets held.

           (c)    Purchasers who want to avoid the payment of
E                 stamp duty and registration charges either
                  deliberately or on wrong advice. Persons who deal
                  in real estate resort to these methods to avoid
                  multiple stamp duties/registration fees so as to
                  increase their profit margin.
F
          Whatever be the intention, the consequences are
          disturbing and far reaching, adversely affecting the
          economy, civil society and law and order. Firstly, it enables
          large scale evasion of income tax, wealth tax, stamp duty
          and registration fees thereby denying the benefit of such
G         revenue to the government and the public. Secondly, such
          transactions enable persons with undisclosed wealth/
          income to invest their black money and also earn profit/
          income, thereby encouraging circulation of black money
          and c9rruption.
H
 SU RAJ LAMP & INDUSTRIES PVT. LTD. v. STATE                     857
  OF HARYANA & ANR. [R.V. RAVEENDRAN, J.]
     This kind of transactions has disastrous collateral effects        A
     also. For example, when the market value increases, many
     vendors (who effected power of attorney sales without
     registration) are tempted to resell the property taking
     advantage of the fact that there is no registered instrument
     or record in any public office thereby cheating the                B
     purchaser. When the purchaser under such 'power of
     attorney sales' comes to know about the vendors action,
     he invariably tries to take the help of musclemen to 'sort
     out' the issue and protect his rights. On the other hand, real
     estate mafia many a time purchase properties which are             c
     already subject to power of attorney sale and then threaten
     the previous 'Power of Attorney Sale' purchasers from
     asserting their rights. Either way, such power of attorney
     sales indirectly lead to growth of real estate mafia and
     criminalization of real estate transactions."
                                                                        D
It also makes title verification and certification of title, which is
an integral part of orderly conduct of transactions relating to
immovable property, difficult, if not impossible, giving
nightmares to bonafide purchasers wanting to own a property
with an assurance of good and marketable title.                         E

     4. This Court had therefore requested the learned Solicitor
General to give suggestions on behalf of Union of India. This
Court also directed notice to States of Delhi, Haryana, Punjab,
Uttar Pradesh to give their views on the matter. The four states        F
have responded and confirmed that SNGPA/WILL transfers
required to be discouraged as they lead to loss of revenue
(stamp duty) and increase in litigations due to defective title.
They also referred to some measures taken in that behalf. The
measures differ from State to State. In general, the measures           G
are: (i) to amend Registration Act, 1908 by Amendment Act
48 of 2001 with effect from 24.9.2001 requiring documents
containing contract to transfer for consideration (agreements
of sale etc.) relating to any immoveable property for the
purpose of section 53A of the Act, shall be registered; and (ii)
                                                                        H
    858     SUPREME COURT REPORTS                [2011] 11 S.C.R.

A   to amend the stamp laws subjecting agreements of sale with
    delivery of possession and/or irrevocable powers of attorney
    in favour of non-family members authorizing sale, to the same
    stamp duty as deed of conveyance. These measures, no doubt,
    to some extent plugged the loss of revenue by way of stamp
B   duty on account of parties having recourse to SA/GPA/WILL
    transactions, instead of executing deeds of conveyance. But the
    other ill-effects continued. Further such transaction which was
    only prevalent in Delhi and the surrounding areas have started
    spreading to other States also. Those with ulterior motives
c   either to indulge in black money transactions or land mafia
    continue to favour such transactions. There are also efforts to
    thwart the amended provisions by not referring to delivery of
    possession in the agreement of sale and giving a separate
    possession receipt or an affidavit confirming delivery of
    possession and thereby avoiding the registration and stamp
0
    duty. The amendments to stamp and registration laws do not
    address the larger issue of generation of black money and
    operation of land mafia. The four States and the Union of India
    are however unanimous that SA/GPA/WILL transactions should
E   be curbed and expressed their willingness to take remedial
    steps.

       5. The State of Haryana has however taken a further
  positive step by reducing the stamp duty on deeds of
  conveyance from 12.5% to 5%. A high rate of stamp duty acts
F as a damper for execution of deeds of conveyance for full value,
  and encourages SA/GPA/WILL transfers. When parties resort
  to SA/GPA/WILL transfers, the adverse effect is not only loss
  of revenue (stamp duty and registration charges) but the
  greater danger of generation of 'black' money. Reducing the
G stamp duty on conveyance to realistic levels will encourage
  public to disclose the maximum sale value and have the sale
  deeds registered. Though the reduction of the stamp duty, may
  result in an immediate reduction in the revenue by way of
  stamp duty, in the long run it will be advantageous for two
H reasons: (i) parties will be encouraged to execute registered
  SURAJ LAMP & INDUSTRIES PVT. LTD. v. STATE                  859
   OF HARYANA & ANR. [R.V. RAVEENDRAN, J.]

deeds of conveyance/sale deeds without any under valuation,           A
instead of entering into SA/GPA/WILL transactions; and (ii)
more and more sale transactions will be done by way of duly
registered sale deeds, disclosing the entire sale consideration
thereby reducing the generation of black money to a large
extent. When high stamp duty is prevalent, there is a tendency        B
to undervalue documents, even where sale deeds are executed.
When properties are undervalued, a large part of the sale price
changes hand by way of cash thereby generating 'black'
money. Even when the state governments take action to prevent
undervaluation, it only results in the recovery of deficit stamp      c
duty and registration charges with reference to the market value,
but the actual sale consideration remains unaltered. If a property
worth Rs. 5 millions is sold for Rs. 2 millions, the Undervaluation
 Rules may enable the state government to initiate proceedings
so as to ensure that the deficit stamp duty and registration          D
charges are recovered in respect of the difference of Rs. 3
millions. But the sale price remains Rs. 2 millions and the black
money of Rs. 3 millions generated by the undervalued sale
transaction, remains undisturbed.

     6. In this background, we will examine the validity and          E
legality of SA/GPA/WILL transactions. We have heard learned
Mr. Gopal Subramanian, Amicus Curiae and noted the views
of the Government of NCT of Delhi, Government of Haryana,
Government of Punjab and Government of Uttar Pradesh who
have filed their submissions in the form of affidavits.               F

Relevant Legal Provisions

     7. Section 5 of the Transfer of Property Act, 1882 ('TP Act'
for short) defines 'transfer of property' as under:
                                                                      G
     "5. Transfer of Property defined : In the following sections
     "transfer of property" means an act by which a living person
     conveys property, in present or in future, to one or more
     other living persons. or to himself [or to himself] and one
                                                                      H
    860       SUPREME COURT REPORTS                  [2011) 11 S.C.R.


A         or more other living persons; and "to transfer property" is
          to perform such act." xxx xxx

    Section 54 of the TP Act defines 'sales' thus:

          "Sale" is a transfer of ownership in exchange for a price
B         paid or promised or part-paid and part-promised.

          Sale how made. Such transfer, in the case of tangible
          immoveable property of the value of one hundred rupees
          and upwards, or in the case of a reversion or other
c         intangible thing, can be made only by a registered
          instrument.

          In the case of tangible immoveable property of a value less
          than one hundred rupees, such transfer may be made
          either py a registered instrument or by delivery of the
D         property.

          Delivery of tangible immoveable property takes place
          when the seller places the buyer, or such person as he
          directs, in possession of the property.
E
          Contract for sale.-A contract for the sale of immovable
          property is a contract that a sale of such property shall take
          place on terms settled between the parties.

    It does not, of itself, create any interest in or charge on such
F   property."

          Section 53A of the TP Act defines 'part performance' thus


          "Part Performance. - Where any person contracts to
G
          transfer for consideration any immoJeable property by
          writing signed by him or on his behalf ftom which the terms
          necessary to constitute the transfer can be ascertained
          with reasonable certainty,

H         and the transferee has, in part performance of the contract,
  SURAJ LAMP & INDUSTRIES PVT. LTD. v. STATE                 861
  . OF HARYANA & ANR. [R.V. RAVEENDRAN, J.]

    taken possession of the property or any part thereof, or the     A
    transferee, being already in possession, continues in
    possession in part performance of the contract and has
    done some act in furtherance of the contract,

    and the transferee has performed or is willing to perform        B
    his part of the contract,

     then, notwithstanding that where there is an instrument of
     transfer, that the transfer has not been completed in the
     manner prescribed therefor by the l~w for the time being
     in force, the transferor or any person claiming under him C
     shall be debarred from enforcing against the transferee
     and persons claiming under him any right in respect of the
    ·property of which the transferee has taken or continued in
     possession, other than a right expressly provided by the
     terms of the contract : .                                  D

   · Provided that nothing in this section shall affect the rights
     of a transferee for consideration who has no notice of the
     contract or of the part performance thereof."

      8. We may next refer to the relevant provisions of the Indian E
Stamp Act, 1999 (Note : Stamp Laws may vary from state to
state, though generally the provisions may be similar). Section
27 of the Indian Stamp Act, 1899 casts upon the party, liable
to pay stamp duty, an obligation to set forth in the instrument all
facts and circumstances which affect the chargeability of duty F
on that instrument. Article 23 prescribes stamp duty on
'Conveyance'. In many States appropriate amendments have
been made whereby agreements of sale acknowledging
delivery of possession or power of Attorney authorizes the
attorney to 'sell any immovable property are charged with the G
same duty as leviable on conveyance.

    9. Section 17 of the Registration Act, 1908 which makes
a deed of conveyance compulsorily registrable. We extract
below the relevant portions of section 17.                           H
    862       SUPREME COURT REPORTS                  [2011] 11 S.C.R.


A         "Section 17 - Documents of which registration is
          compulsory~     (1) The following documents shall
          be registered, namely:-

                                      xxxxx
B         (b) other non-testamentary instruments which purport or
          operate to create, declare, assign, limit or extinguish,
          whether in present or in future, any right, title or interest,
          whether vested or contingent, of the value of one hundred
          rupees and upwards, to or in immovable property.
c
                                   xxxxx
          (1A) The documents containing contracts to transfer for
          consideration, any immovable property for the purpose of
          section 53A of the Transfer of Property Act, 1882 (4 of
D         1882) shall be registered if they have been executed on
          or after the commencement of the Registration and Other
          Related laws (Amendment) Act, 2001 and if such
          documents are not registered on or after such
          commencement, then, they shall have no effect for the
E         purposes of the said section 53A.

    Advantages of Registration

        10. In the earlier order dated 15.5.2009, the objects and
F   benefits of registration were explained and we extract them for
    ready reference :

          "The Registration Act, 1908, was enacted with the intention
          of providing orderliness, discipline and public notice in
          regard to transactions relating to immovable property and
G         protection from fraud and forgery of documents of transfer.
          This is achieved by requiring compulsory registration of
          certain types of documents and providing for
          consequences of non-registration.

H         Section 17 of the Registration Act clearly provides that any
SURAJ LAMP & INDUSTRIES PVT. LTD. v. STATE                  863
 OF HARYANA & ANR. [R.V. RAVEENDRAN, J.]
  document (other than testamentary instruments) which              A
  purports or operates to create, declare, assign, limit or
  extinguish whether in present or in future "any right, title or
  interest" whether vested or contingent of the value of Rs.
  100 and upwards to or in immovable property.
                                                                    8
  Section 49 al the said Act provides that no document
  required by Section 17 to be registered shall, affect any
  immovable property comprised therein or received as
  evidence of any transaction affected such property, unless
  it has been registered. Registration of a document gives          C
  notice to the world that such a document has been
  executed.

  Registration provides safety and security to transactions
  relating to immovable property, even if the document is lost
  or destroyed. It gives publicity and public exposure to           D
  documents thereby preventing forgeries and frauds in
  regard to transactions and execution of documents.
  Registration provides information to people who may deal
  with a property, as to the nature and extent of the rights
  which persons may have, affecting that property. In other         E
  words, it enables people to find out whether any particular
  property with which they are concerned, has been subjected
  to any legal obligation or liability and who is or are the
  person/s presently having right, title, and interest in the
  property. It gives solemnity of form and perpetuate               F
  documents which are of legal importance or relevance by
  recording them, where people may see the record and
  enquire and ascertain what the particulars are and as far
  as land is concerned what obligations exist with regard to
  them. It ensures that every person dealing with immovable         G
  property can rely with confidence upon the statements
  contained in the registers (maintained under the said Act)
  as a full and complete account of all transactions by which
  the title to the property may be affected and secure
  extracts/copies duly certified."
                                                                    H
    864       SUPREME COURT REPORTS                  [2011] 11 S.C.R.


A         Registration of documents makes the process of
          verification and certification of title easier and simpler. It
          reduces disputes and litigations to a large extent.

    Scope of an Agreement of sale
B        11. Section 54 of TP Act makes it clear that a contract of
    sale, that is, an agreement of sale does not, of itself, create
    any interest in or charge on such property. This Court in
    Narandas Karsondas v. S.A. Kamtam and Anr. (1977) 3 SCC
    247, observed:
c
          A contract of _sale does not of itself create any interest in,
          or charge on, the property. This is expressly declared in
          Section 54 of the Transfer of Property Act. See Rambaran
          Prasad v. Ram Mohit Hazra [1967]1 SCR 293. The
D         fiduciary character of the personal obligation created by
          a contract for sale is recognised in Section 3 of the
          Specific Relief Act, 1963, and in Section 91 of the Trusts
          Act. The personal obligation created by a contract of sale
          is described in Section 40 of the Transfer of Property Act
          as an obligation arising out of contract and annexed to the
E
          ownership of property, but not amounting to an interest or
          easement therein."

          In India, the word 'transfer' is defined with reference to the
          word 'convey'. The word 'conveys' in section 5 of Transfer
F         of Property Act is used in the wider sense of conveying
          ownership ...... that only on execution of conveyance
          ownership passes from one party to another ... ."

      In Rambhau Namdeo Gajre v. Narayan Bapuji Dhotra
G [2004 (8) SCC 614] this Court held:

          "Protection provided under Section 53A of the Act to the
          proposed transferee is a shield only against the transferor.
          It disentitles the transferor from disturbing the possession
          of the proposed transferee who is put in possession in
H         pursuance to such an agreement. It has nothing to do with
   SU RAJ LAMP & INDUSTRIES PVT. LTD. v. STATE 865
    OF HARYANA & ANR. [R.V. RAVEENDRAN, J.]
      the ownership of the proposed transferor who remains full        A
      owner of the property till it is legally conveyed by executing
    ' a registered sale deed in favour of the transferee. Such a
      right to protect possession against the proposed vendor
      cannot be pressed in service against a third party."
                                                                       B
      It is thus clear that a transfer of immoveable 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
 immoveable property can be transferred.
                                                                       c
       12. Any contract of sale (agreement to sell) which is not a
  registered deed of conveyance (deed of sale) would fall short
  of the requirements of sections 54 and 55 of TP Act and will
. not confer any title nor transfer any interest in an immovable
  property (except to the limited right granted under section 53A      D
  of TP Act). According to TP Act, an agreement of sale, whether
  with possession or without possession, is not a conveyance.
  Section 54 of TP Act enacts that sale of immoveable property
  can be made only by a registered instrument and an agreement
  of sale does not create any interest or charge on its subject        E
  matter.

 Scope of Power of Attorney

      13. A power of attorney is not an instrument of transfer in
 regard to any right, title or interest in an immovable property.      F
 The power of attorney is creation of an agency whereby the
 grantor authorizes the grantee to do the acts specified therein,
 on behalf of grantor, which when executed will be binding on
 the grantor as if done by him (see section 1A and section 2 of
 the Powers of Attorney Act, 1882). It is revocable or terminable      G
 at any time unless it is made irrevocable in a manner known to
 law. Even an irrevocable attorney does not have the effect of
 transferring title to the grantee. In State of Rajasthan vs. Basant
 Nehata - 2005 (12) SCC 77, this Court held :
                                                                       H
    866       SUPREME COURT REPORTS                 [2011] 11 S.C.R.


A         "A grant of power of attorney is essentially governed by
          Chapter X of the Contract Act. By reason of a deed of
          power of attorney, an agent is formally appointed to act for
          the principal in one transaction or a series of transactions
          or to manage the affairs of the principal generally
B         conferring necessary authority upon another person. A
          deed of power of attorney is executed by the principal in
          favour of the agent. The agent derives a right to use his
          name and all acts, deeds and things done by him and
          subject to the limitations contained in the said deed, the
c         same shall be read as if done by the donor. A power of
          attorney is, as is well known, a document of convenience.

       · Execution of a power of attorney in terms of the provisions
         of the Contract Act as also the Powers-of-Attorney Act is
         valid. A power of attorney, we have noticed hereinbefore,
D        is executed by the donor so as to enable the donee to act
         on his behalf. Except in cases where power of attorney is
         coupled with interest, it is revocable. The donee in exercise
         of his power under such power of attorney only acts in
         place of the donor subject of course to the powers granted
E        to him by reason thereof. He cannot use the power of
         attorney for his own benefit. He acts in a fiduciary capacity.
         Any act of infidelity or breach of trust is a matter between
         the donor and the donee. •

F        An attorney holder may however execute a deed of
    conveyance in exercise of the power granted under the power
    of attorney and convey title on behalf of the grantor.

    Scope of Will

G      14. A will is the testament of the testator. It is a posthumous
  disposition of the estate of the testator directing distribution of
  his estate upon his death. It is not a transfer inter vivos. The
  two assential characteristics of a will are that it is intended to
  come into effect only after the death of the testator and is
H revocable at any time during the life time of the testator. It is
  SURAJ LAMP & INDUSTRIES PVT. LTD. v. STATE                  867
   OF HARYANA & ANR. [R.V, RAVEENDRAN, J.]
said that so long as the testator is alive, a will is not be worth   A
the paper on which it is written, as the testator can at any time
revoke it. If the testator, who is not married, marries after
making the will, by operation of law, the will stands revoked.
(see sections 69 and 70 of Indian Succession Act, 1925).
Registration of a will does not make it any more effective.          B

Conclusion

      15. Therefore, a SA/GPA/WILL transaction does not
convey any title nor create any interest in an immovable
property. The observations by the Delhi High Court, in Asha M.       C
Jain v. Canara Bank - 94 (2001) DLT 841, that the "concept
of power of attorney sales have been recognized as a mode
of transaction" when dealing with transactions by way of SA/
GPA/WILL are unwarranted and not justified, unintendedly
misleading the general public into thinking that SA/GPA/WILL         D
transactions are .some kind of a recognized or accepted mode
of transfer and that it can be a valid substitute for a sale deed.
Such deci$ions to the extent they recognize or accept SA/GPA/
WILL transactions as concluded transfers, as contrasted from
an agreement to transfer, are not good law.                          E

      16. We therefore reiterate that immovable property can be
legally and lawfully transferred/conveyed only by a registered
deed of conveyance. Transactions of the nature of 'GPA sales'
or 'SA/GPA/WILL transfers' do not convey title and do not
amount to transfer, nor can they be recognized or valid mode         F
of transfer of immoveable property. The courts will not treat such
transactions as completed or concluded transfers or as
conveyances as they neither convey title nor create any interest
in an immovable property. They cannot be recognized as
deeds of title, except to the limited extent of section 53A of the   G
TP Act. Such transactions cannot be relied upon or made the
basis for mutations in Municipal or Revenue Records. What is
stated above will apply not only to deeds of conveyance in
regard to freehold property but also to transfer of leasehold
property. A lease can be validly transferred only under a            H
   868      SUPREME COURT REPORTS                 [2011) 11 S.C.R.


A registered Assignment of Lease. It is time that an end is put to
  the pernicious practice of SA/GPA/WILL transactions known as
  GPA sales.

       17. It has been submitted that making declaration that GPA
8 sales and SA/GPA/WILL transfers are not legally valid modes
  of transfer is likely to create hardship to a large number of
  persons who have entered into such transactions and they
  should be given sufficient time to regularize the transactions by
  obtaining deeds of conveyance. It is also submitted that this
C decision should be made applicable prospectively to avoid
  hardship.

        18. We have merely drawn attention to and reiterated the
  well-settled legal position that SA/GPA/WILL transactions are
  not 'transfers' or 'sales' and that such transactions cannot be
D treated as completed transfers or conveyances. They can
  continue to be treated as existing agreement of sale. Nothing
  prevents affected parties from getting registered Deeds of
  Conveyance to complete their title. The said 'SA/GPA/WILL
  transactions' may also be used to obtain specific performance
E or to defend possession under section 53A of TP Act. If they
  are entered before this day, they may be relied upon to apply
  for regularization of allotments/leases by Development
  Authorities. We make it clear that if the documents relating to
  'SA/GPA/WILL transactions' has been accepted acted upon by
F DOA or other developmental authorities or by the Municipal or
  revenue authorities to effect mutation, they need not be
  disturbed, merely on account of this decision.

       19. We make it clear that our observations are not
  intended to in any way affect the validity of sale agreements
G 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. A person may enter into
  a development agreement with a land developer or builder for
H developing the land either by forming plots or by constructing
   SURAJ LAMP & INDUSTRIES PVT. LTD. v. STATE                   869
    OF HARYANA & ANR. [R.V. RAVEENDRAN, J.]
 apartment buildings and in that behalf execute an agreement            A
 of sale and grant a Power of Attorney empowering the
 developer to execute agreements of sale or conveyances in
 regard to individual plots of land or undivided shares in the land
 relating to apartments in favour of prospective purchasers. In
 several States, the execution of such development agreements           B
 and powers of attorney are already regulated by law and
 subjected to specific stamp duty. Our observations regarding
 'SA/GPA/WILL transactions' are not intended to apply to such
 bonafide/genuine transactions.

     20. We place on record our appreciation for the assistance
                                                                        c
 rendered by Mr. Gopal Subramaniun, Senior Counsel, initially ·
 as Solicitor General and later as Amicus Curiae.

        21. As the issue relating to .;,alidity of SA/GPA/WILL has
  been dealt with by this order, what remains is the consideration      D
. of the special leave petition on its merits. List the special leave
  petition for final disposaL

 R.P.                                              Matter pending.