💡 Suraj Lamp & Industries v. State of Haryana [2011 SC]

📌 Topic: Legal Validity of SA/GPA/WILL Transfers

Supreme Court:
• Transactions of the nature of ‘GPA sales’ or ‘SA/GPA/WILL transfers’ do not convey title and do not amount to a transfer, nor can they ever be a recognized or valid mode of transfer of immovable property.
• A transfer of immovable property by way of sale can only be through a duly stamped and registered deed of conveyance (sale deed). Without such a deed, no right, title, or interest passes.

📘 Judgment Summary

Delhi Law Academy Jaipur presents below for aspirants of RJS, DJS, PCS (J) and other Judicial Services throughout India a summarized version of the Supreme Court judgment in the case of Suraj Lamp & Industries v. State of Haryana.

JUDGMENT

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:

(a) An Agreement of sale by the vendor in favour of the 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.
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.

(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.
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 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).

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, 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.

📜 Scope of an Agreement of Sale

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.
293. The 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 ownership of property, but not amounting to an interest or easement therein.

It is thus clear that a transfer of immoveable property by way of sale can only be by a deed of conveyance (sale deed). Without such a deed, no interest or title passes.

🖋️ 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. It is merely an agency arrangement.
Even an irrevocable power of attorney does not transfer ownership.
However, an attorney holder may execute a sale deed on behalf of the grantor if such authority is expressly granted.

📄 Scope of Will

14. A will is a testamentary instrument; it takes effect only after death and is revocable during the lifetime of the testator.
It is not a transfer inter vivos.
Registration does not enhance the transferability of a will.

✔️ Conclusion

15. Therefore, a SA/GPA/WILL transaction does not convey title nor create any interest in an immovable property.
These are not valid modes of property transfer.
A leasehold property, too, can only be transferred by a registered Assignment of Lease.

19. The Court clarified that this ruling does not affect genuine powers of attorney granted for management or convenience within families.

📘 Stay Ahead with Delhi Law Academy!

Get access to free monthly current affairs, read our insightful blogs,
and explore free study resources prepared by experts at DLA Jaipur. 🚀

❓ FAQs on Suraj Lamp Judgment & SA/GPA/WILL Transfers