INTRODUCTION
The question of how ownership rights in immovable property can be lawfully transferred has been subject to repeated disputes across Indian courts. Once again, the Supreme Court reaffirmed that neither an agreement to sell nor a general power of attorney (GPA) confers ownership rights in immovable property. The Supreme Court made it clear in the case of Ramesh Chand (D) THR. LRS. Vs Suresh Chand AND ANR., that the title in property can only be transferred through a duly executed and registered sale deed under the law.
This reiteration came in a ruling delivered on September 1, 2025, where the Apex Court set aside a decision of the Delhi High Court that had permitted transfer of possession and ownership declarations without a registered sale deed.
Legal Context:-
Under the Transfer of Property Act, 1882 and the Registration Act, 1908, ownership in immovable property, whether residential, commercial, or agricultural, can only pass through a registered conveyance deed (sale deed), accompanied by the payment of proper stamp duty and registration charges.
An agreement to sell is merely a contract that creates a right to obtain another document in the future — namely, a sale deed. Similarly, a general power of attorney only authorizes an individual to act on behalf of the property owner but does not create ownership rights.
Therefore, holding or utilizing a property merely through a GPA or an agreement to sell does not grant the possessor the legal status of an owner.
What the Supreme Court Reiterated ?
The Court, while ruling in this case, emphasized three central points:
- Ownership of an immovable property can only be transferred through a duly registered conveyance deed.
- Merely relying on an agreement to sell or GPA is insufficient to establish ownership.
- Unregistered documents hold no evidentiary value in transferring property rights.
Although such documents may be admissible for collateral purposes, they cannot be used to claim absolute ownership. - Legal certainty in real estate transactions requires registration.
Registration not only safeguards the interests of the buyer and seller but also ensures transparency in property records, reducing litigation.
By setting aside the High Court’s ruling, the Supreme Court once again laid down that courts must strictly adhere to the mandate of property transfer laws, and cannot recognize ownership claims arising out of mere agreements, GPAs, or unregistered documents.
Why This Judgment is Important ?
This judgment carries immense significance, particularly in urban centers like Delhi-NCR where people often rely on GPA sales or “power of attorney transactions” as an informal method of transferring property. Many sellers and buyers resort to such practices to avoid high stamp duty or registration costs.
However, such transactions remain legally insecure, as no valid title passes to the buyer. This judgment reiterates that:
- GPA transfers are not substitutes for registered conveyances.
- Courts cannot decree ownership rights on the basis of incomplete or non-registered documents.
- Both parties in a property deal need to complete the legal formalities for a transaction to carry binding ownership.
Implications for Property Buyers and Sellers:
- For Buyers: If you purchase property merely through an agreement to sell or GPA, you risk losing ownership rights in the future since such documents cannot create lawful title. Always insist on a registered sale deed.
- For Sellers: Relying on GPA to transfer property can lead to disputes later, as it does not absolve you from ownership until a registered sale deed is executed.
- For Litigation: Courts have now consistently ruled that no decree for ownership or possession can be granted based only on GPA or agreement to sell. Parties must approach the court with proper conveyance deeds to assert ownership rights.
Judicial Consistency.
The Supreme Court has emphasized this principle on multiple occasions in the past. Past judgments have also stated that:
- GPA and agreement to sell transfers are not recognized as conveyances. They may at best give rise to rights to seek specific performance of a valid contract, but not ownership.
- The practice of “GPA sales” is legally defective and undermines the real estate regulatory framework.
Thus, by once again emphasizing the mandatory requirement of registered sale deeds, the Supreme Court has reinforced legal clarity.
Conclusion
The Supreme Court has once again clarified that ownership of immovable property cannot be transferred merely through a GPA or an agreement to sell. A registered sale deed is the only valid instrument to transfer title. This judgment is a warning for those indulging in GPA transactions to avoid registration charges, as such shortcuts may lead to decades of litigation and uncertainty in ownership.
In essence, property buyers and sellers must adhere strictly to the statutory requirements under the Transfer of Property Act and the Registration Act to ensure ownership is valid and undisputed.
FAQs
Q1. Can an agreement to sell make me the legal owner of a property?
No. An agreement to sell merely gives a contractual right to request execution of a future sale deed; it does not by itself transfer ownership.
Q2. Can a GPA transfer ownership of property?
No. A General Power of Attorney (GPA) merely empowers one individual to act on behalf of another. It does not grant, transfer, or establish ownership rights in the property.
Q3. Is registration of a sale deed compulsory for property transfer?
Yes. Without a registered sale deed, no title in immovable property passes from seller to buyer.
Q4. Can GPA or agreement to sell be used in court at all?
Yes, but only for collateral purposes. They cannot be used to claim ownership but may support claims for specific performance or proof of possession.
Q5. What should a buyer do to ensure legal ownership of property?
A buyer must execute a registered sale deed, pay applicable stamp duty, and complete registration as mandated by law.
