“The title is the de facto antecedent, of which the right is the de jure consequent…..For the essence of a title is not that it determines the creation of rights de novo, but that it determines the acquisition of rights new or old.”^[1]

Enthralling it is, when picturising the transient nature of a 'title' and its consistency of change and acquisition, especially when tasked with the herculean job of determining its flow of transfer. Property transactions have undergone a massive shift in title and ownership transfers; cutting out the shortcuts, the GPA-based transactions have been declared as misnomer and not valid sales or transfers and hence, for an actual transfer, what is presently needed is a registered document, being a deed of transfer/conveyance deed.

As governed by the concept of Agency, outlined by The Indian Contract Act^[2], a GPA is executed by the principal in favour of the agent. Through this, the agent becomes formally appointed and authorised to act and manage the acts of the principal, creating a fiduciary character and personal obligation. Ubiquitous post the Independence, the practice of GPA transactions for the title transfer, especially for immovable property, had been widely adopted for the convenience of the parties, however this eventually led to room for large-scale evasion of income tax, wealth tax, registration and stamp duty, undisclosed or black money, collateral effects, and the rise of real-estate mafias. These transactions were a part of the trilogy agreement of the buyer with the seller, consisting of – Sale Agreement, allottee granted General Power of Attorney and a Will conferred in favour of the buyer, and hence in an efficacious manner achieving the desired objective.

The Judgment In Suraj Lamps:

To tackle the evasions and shady transactions, the Apex Court building on the landmark judgement of Suraj Lamps & Industries Pvt. Ltd. v. State of Haryana ^[3] held - 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 a transfer, nor can they be recognised as a valid mode of transfer of immovable 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. It deemed SA/GPA/will transactions to be “grossly violative of public policy” insofar as they assisted in the avoidance of certain preconditions involved in transfer, particularly the registration of property after paying due stamp duties and registration charges.

More vital incursions have been made by the courts against such transactions, in Sakeel Ahmed^[4] and Umadevi Nambiar^[5], the Court further limited the right of a holder of the GPA to approach the court to enforce his right, applying the principle of Nemo dat quod non habet, the court here interpreted that since the vendor (agent) himself is not authorised for the sale of the property, as a necessary sequitur, they naturally do not hold a valid title and hence cant possibly convey further. In Ghanshyam v. Yogendra Rathi ^[6], the Court postulated that it is irrelevant to the customs and traditions and that a general power of attorney or will shall not deem any title or ownership to an immovable property. The execution and registration of a sale or transfer is essential to confer right and title to an immovable property. The sale agreements, general power of attorney, and Wills are not deemed as valid transfer of title documents, and mere execution of these documents does not transfer right and title in the immovable property. Most recently, in M. S. Ananthamurthy & Anr v. J. Manjula,^[7] the court reaffirmed the law of Suraj Lamps and additionally the document should be considered as constructed as a whole and not independent of certain words used, that The holder of POA could not be said to have an interest in the subject-matter of the agency and mere use of the word 'irrevocable' in a POA would not make the POA irrevocable. An independent reading of the power of attorney should convey the intention of the document, and irrespective of nature, a POA does not secure the agent's right in the subject matter of the agency (property).

Whether Suraj Lamps Is Applicable Retrospectively To Affect Transactions Prior To The Said Date:

On a further perusal of Suraj Lamps, ideally as per para 26, it was intended to operate prospectively to those actions which have aleady been made, as apparent from under:

“26.

…

We make it clear that if the documents relating to `SA/GPA/WILL transactions' has been accepted acted upon by DDA 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.”

However, such an argument has been now rejected in Sakeel Ahmed as under:

“13. The argument advanced on behalf of the respondent that the judgment in Suraj Lamps & Industries (supra) would be prospective is also misplaced. The requirement of compulsory registration and effect on non-registration emanates from the statutes, in particular the Registration Act and the Transfer of Property Act. The ratio in Suraj Lamps & Industries (supra) only approves the provisions in the two enactments. Earlier judgments of this Court have taken the same view.”

Thus now, the ratio in Suraj lamps, is applicable even to unseat transactions prior to the judgment of Suraj Lamps, which was decided on 11.10.2011.

The  Arguable  Exception Of 'Better Title':

Fundamentally concrete on the law established yet, as evidenced in a prevalent and significant case after the Suraj Lamps - in Ramesh Chand v. Suresh Chand[MOU1] ^[8], the Hon'ble Delhi High Court, in its observation, has carved room for the general rule of having a 'better right', that, right to possession of an immovable property arises not only from a complete ownership right in the property but having a better title or a better entitlement/right to the possession of the property than qua the person who is in actual physical possession. That for title, the Plaintiff needs to prove that he has a better title than the defendant. He does not have a burden to show that he has the best of all titles. His ownership is good against all the world except the true owner, is what he ought to demonstrate^[9]. While the precedential law settles the course when the title is disputed, it suffers from the defect of converse judgments. Thus, the diverse reasoning in these cases has led to a crossroads of interpretation while complicating the landscape of the GPA mechanism for the buyers and sellers.

In Conclusion, GPA sales of property have been a significant topic in India's legal landscape. The legal trajectory of GPA-based property transactions in India reflects a gradual but definitive shift from informal practices to a formalised-accountable, registration-driven framework. The Hon'ble Supreme Court of India's decision in Suraj Lamps & Industries Pvt. Ltd. v. State of Haryana marked an indispensable stance, iterating that title to immovable property cannot be conveyed through instruments such as a General Power of Attorney or an Agreement to Sell, absent a duly registered conveyance deed. This position aims not only to preserve the integrity of title transfers but also to strengthen the regulatory regime governing registration and stamp . Nonetheless, the evolution has not been entirely uniform. High Courts have exhibited a degree of flexibility by invoking equitable considerations in cases where possession, better title, or part-performance exists. These equity-based exceptions, though grounded in factual nuance, have introduced a layer of ambiguity into what the Supreme Court intended to be a settled position. Nonetheless, the legal position on GPA sales in India embodies the ongoing reconciliation between practical realities and legal formalism and curbs the pernicious practice of GPA sales. The Supreme Court's jurisprudence has laid down a clear normative framework outlining the essential position for the transfer of immoveable property.

Yugansh Mittal is an Advocate On Record at Supreme Court of India & Ishanvie Bansal is a law student . Views are personal.