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SURAJ LAMP AND INDUSTRIES PVT. LTD. VS. STATE OF HARYANA

Suraj Lamps Pvt. Ltd. v State of Haryana, 2011 (11) SC 438.

ISSUE:

  • What is the validity of the Sale Agreement, the General Power of Attorney (GPA) and the Will?

RULE:

  • Section 54 of the Transfer of Property 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.
  • Thus a transfer of immovable property by way of sale could 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 except to the limited right granted under Section 53A of the Transfer of Property Act.

FACTS:

  • The petitioner, is a company that bought land from the defendant Ramnath and his family by means of an agreement of sale, General Power of Attorney (GPA), and a will for consideration of Rs. 7, 16, 695.
  • After buying two and a half acres of land from Ramnath and his family, Petitioner agreed verbally to sell one acre to Dharamvir Yadav (ex-MLA). But before the land was sold, Dharamvir came in contact with Ramnath and his family who sold to the petitioner by the means of GPA and again sold Dharamvir the same two and a half acres land by the means of GPA.
  • Then Dharamvir illegally canceled the earlier GPA which was in favor of the petitioner. So, the petitioner claimed lodged a criminal complaint against Ramnath and his who sold the same land twice by the means of GPA for punishable under sections 406, 420, 467, 468, 471, and 120B of the Indian Penal Code.

HELD:

  • It was held that Immovable property could be legally and lawfully transferred/conveyed only by a registered deed of conveyance, Transactions of nature of GPA sales or SA/GPA/WILL transfers did not convey title and did not amount to transfer, nor could they be recognized or valid mode of transfer of immovable property
  • SA/GPA/WILL transactions were not transfers or sales and that such transactions could not be treated as completed transfers or conveyances. They could be continued to be treated as an existing agreement of sale.
  • However, nothing prevented affected parties from getting registered Deeds of Conveyance to complete their title. SA/GPA/WILL transactions could also be used to obtain specific performance or to defend possession under Section 53A of the Act.