The Supreme Court of India, in a significant ruling on property law, has held that an Agreement to Sell, General Power of Attorney (GPA), and even a registered Will do not confer valid title on a property in the absence of a registered sale deed and proper legal proof. The judgment, delivered by a bench of Justices Aravind Kumar and Sandeep Mehta, set aside a Delhi High Court order and dismissed a suit for possession, clarifying that such documents cannot be treated as valid instruments of transfer.
The case, Ramesh Chand (D) Thr. Lrs. vs Suresh Chand and Anr., involved a property dispute between two brothers over a house originally owned by their father, Shri Kundan Lal.
Background of the Case
The plaintiff, Suresh Chand, filed a suit for possession, mesne profits, and declaration of title for a property in Ambedkar Basti, Delhi. He claimed to have acquired title from his father through a set of documents executed on May 16, 1996, which included a General Power of Attorney, an Agreement to Sell, an Affidavit, a Receipt for Rs. 1,40,000, and a registered Will bequeathing the property to him.
The defendant, Ramesh Chand (the appellant), who was in possession of the property, contested the suit. He argued that the property was orally transferred to him by their father in July 1973. He filed a counterclaim seeking a declaration that the documents relied upon by the plaintiff were null and void.
The Trial Court decreed the suit in favour of the plaintiff, a decision that was later upheld by the High Court of Delhi. The defendant then appealed to the Supreme Court.
Arguments of the Parties
The appellant, represented by counsel Mr. S. Mahendran, argued that ownership title cannot be conferred merely on the basis of an Agreement to Sell, GPA, and Will without a registered sale deed. It was contended that the Will had not been proved in accordance with the law, specifically Section 68 of the Indian Evidence Act and Section 63 of the Indian Succession Act. Furthermore, it was argued that the plaintiff could not claim the benefit of part performance under Section 53A of the Transfer of Property Act, 1882, as possession of the property had never been delivered to him.
The second respondent, who had purchased a 50% share of the property from the appellant, argued that she was a bona fide purchaser and that her rights should be protected. The first respondent (the original plaintiff) did not appear before the Supreme Court and was proceeded against ex-parte.
Supreme Court’s Analysis
The Supreme Court meticulously analyzed the legal validity of each document relied upon by the plaintiff to determine if they conferred title.
On the Agreement to Sell: The Court reiterated the distinction between a “sale” and a “contract for sale” under Section 54 of the Transfer of Property Act. It observed that a contract for sale does not, by itself, create any interest in or charge on the property. Citing its previous landmark judgment in Suraj Lamp and Industries Private Limited v. State of Haryana, the Court stated:
“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 bench concluded that the Agreement to Sell only enabled the plaintiff to seek specific performance for the execution of a sale deed and did not create any title in his favour.
On the General Power of Attorney (GPA): The Court clarified that a GPA is an instrument of agency, not transfer. It held that a GPA does not ipso facto constitute a transfer of property. Quoting again from the Suraj Lamp case, the judgment noted:
“A power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property… Even an irrevocable attorney does not have the effect of transferring title to the grantee.”
On the Registered Will: The Court found significant legal deficiencies in how the lower courts had treated the Will. It emphasized that a Will must be proved in accordance with the strict requirements of Section 63 of the Succession Act and Section 68 of the Evidence Act, which mandates the examination of at least one attesting witness.
The Supreme Court criticized the High Court for its “erroneous” finding that this requirement applies only in disputes between legal heirs, calling such an observation “quite contrary to law.”
Furthermore, the Court identified suspicious circumstances surrounding the Will, noting, “There is not even a whisper of reasoning as to why the propounder of the Will choose to exclude other three children from the bequest… It is highly unlikely that a father would grant his entire property to one of his children, at the cost of three others, without there being any evidence of estrangement.” Since the plaintiff had failed to remove these suspicions, the Court held that the Will did not confer any valid title.
On the Doctrine of Part Performance (Section 53A): The Court noted that a crucial condition for invoking the doctrine of part performance is that the transferee must have taken possession of the property. The judgment stated, “In the instant matter, the very fact that plaintiff has filed the present suit for possession, along with other reliefs, shows that on the date of filing of the suit, plaintiff was not in possession of the entire suit property. Since there was no possession with the plaintiff, he cannot derive any benefit under the doctrine of part-possession.”
The Final Decision
Based on this comprehensive analysis, the Supreme Court concluded that none of the documents relied upon by the plaintiff conferred a valid title to the suit property. The Court held that since the Will was not proved, upon the demise of the father, Shri Kundan Lal, the succession would open up to all his Class-I legal heirs.
The judgment allowed the appeal and dismissed the plaintiff’s suit. The Court also ordered that the rights of the second defendant, who had purchased a share from the appellant, would be protected to the extent of the appellant’s share in the property.
