GPA Sale vs Registered Sale Deed in India

For decades, property transactions in India have often taken the form of GPA sales—agreements where ownership is transferred through a General Power of Attorney, sometimes supported by a Sale Agreement and a Will. This practice was particularly common in Delhi and other metropolitan areas where stamp duty and registration costs were high. Buyers and sellers found GPA sales convenient, but convenience came at the cost of legal certainty.

The law has now made its position clear: a GPA sale does not convey ownership. The Supreme Court, in the landmark judgement of Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana (2011), settled the debate by holding that SA/GPA/Will not convey title to immovable property. Yet, despite repeated warnings from courts and state authorities, GPA transactions continue to surface in real estate markets.

The critical question for anyone involved is this: what is the validity of a GPA sale in India, what risks does it carry, and how can one cure title defects arising from such transactions?

GPA Sale Validity in India

The legal position on GPA sale validity in India is unambiguous. A transfer of immovable property can only be effected by a registered sale deed as per the Transfer of Property Act, 1882 and the Registration Act, 1908. A General Power of Attorney is merely an authorization—it allows the holder to act on behalf of the owner but does not, in itself, transfer ownership.

The Supreme Court’s ruling in Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana (2011) was a turning point. The Court categorically held that transactions involving only a Sale Agreement, GPA, and Will (commonly referred to as SA/GPA/Will transactions) will not convey title or ownership. At best, such documents can create a right to seek specific performance or serve as evidence of possession, but they cannot be substitutes for a registered conveyance deed.

State governments, particularly the Delhi Development Authority (DDA) and local revenue authorities, have since issued circulars and clarifications directing sub-registrars not to treat GPA sales as transfers of ownership. In practice, this means that if you hold property solely under a GPA, you do not have marketable title. You may occupy and enjoy the property, but your ownership rights remain legally defective.

Risks of GPA Sales

Buying or holding property through a GPA sale exposes parties to several risks that cannot be ignored.

1. No Clear Ownership:

Since GPA sales do not transfer title, the buyer does not become the lawful owner. This means the property cannot be freely sold, mortgaged, or gifted. Banks generally refuse to provide home loans against such properties, considering the title defective.

2. Vulnerability to Litigation:

The true owner, or their legal heirs, may challenge the transaction. Courts have consistently sided with rightful owners, holding that GPA buyers only have limited rights such as seeking performance of a contract, not full ownership.

3. Ineligibility for Mutation:

Revenue authorities often refuse to mutate properties purchased via GPA into the buyer’s name. Without mutation, property tax records and municipal rights remain in the original owner’s name, making resale or redevelopment problematic.

4. Risk of Cancellation:

A GPA is revocable unless coupled with interest. The principal (the original owner) can revoke the power at any time during their lifetime, leaving the GPA holder without enforceable rights.

5. Future Regularisation Issues:

In several states, only registered conveyance deeds are accepted for regularisation schemes, redevelopment projects, or government buybacks. GPA properties get left out, diminishing their value over time.

Conclusion

The debate over GPA sale validity in India is no longer unsettled. The law has drawn a sharp line: ownership of immovable property passes only through a duly stamped and registered sale deed. A GPA, even when backed by a sale agreement or Will, is insufficient to convey ownership. Courts, registrars, and revenue authorities uniformly reject GPA sales as conferring title.

For buyers, the risks are substantial—litigation, lack of finance, and an inability to mutate or resell. For sellers, the transaction may invite scrutiny or even cancellation. The only prudent path is to secure proper conveyance through a registered sale deed or participate in regularisation schemes wherever available.

In property law, certainty of title is paramount. A GPA sale may look like a shortcut, but it is one that leads to a dead end. The real solution lies in curing defective title through legal conveyance, ensuring that property ownership rests on firm ground.

FAQs on GPA Sale vs Registered Sale Deed

Q1. What is the validity of GPA sale in India?

A GPA sale does not transfer ownership of immovable property in India. The Supreme Court has clarified that only a registered sale deed conveys valid title. A GPA merely authorises another person to act on behalf of the owner; it is not a conveyance of property.

Q2. Why is SA/GPA/Will not treated as a transfer of ownership?

Because these documents are private arrangements that lack the statutory requirements of a conveyance deed. Under property law, ownership passes only when a duly stamped and registered sale deed is executed. SA/GPA/Will not convey title in law.

Q3. Can a GPA holder sell the property?

No. A GPA holder cannot sell property unless specifically authorised by the owner, and even then, ownership will pass only when a registered sale deed is executed by or on behalf of the owner. Without this, the buyer does not acquire lawful title.

Q4. How can one cure a defective title from a GPA sale?

The buyer should secure a registered sale deed from the original owner or their legal heirs. If unavailable, the buyer can seek specific performance through court to compel execution of a conveyance deed. In some states, regularisation schemes allow conversion of GPA properties into valid conveyance deeds.

Q5. Are banks willing to finance properties purchased through GPA?

Generally, no. Banks and financial institutions require clear, marketable title as security. Since GPA properties do not confer ownership, they are treated as risky assets and are rarely accepted for loans.

Q6. Is it legal to buy property through GPA in Delhi or other states?

It is legal to enter into a GPA arrangement, but such a transaction will not transfer ownership. Authorities like the DDA have repeatedly cautioned that only a registered sale deed can be relied upon for ownership and regularisation.

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