In its judgment dated 30th January 2022, in the case of AMAR NATH– APPELLANT(S) VERSUS GIAN CHAND AND ANR. … RESPONDENT(S)[ (CIVIL APPEAL NO. 5797 OF 2009,], the Supreme Court observed that the production of the original power of attorney is not necessary if the document is presented for registration by the power of attorney holder of the principal. The Registration Act does not contemplate inquiry into whether PoA Holder who executed document had valid Power Of Attorney, it said.
“The inquiry contemplated under the Registration Act, cannot extend to question as to whether the person who executed the document in his capacity of the power of attorney holder of the principal, was indeed having a valid power of attorney or not to execute the document or not”, the bench comprising Justice KM Joseph and PS Narasimha
The plaintiff entered into an oral agreement for the sale of the property for a consideration of Rs. 55,000/-. Since the plaintiff was serving as a Junior Engineer came on leave to complete the transaction on the agreed date, but the first defendant could not arrange the money and ask for further time. The plaintiff bonafide executed a special power of attorney in favour of the 2nd defendant for selling the property for the amount of Rs. 55,000/-. /-. As the negotiation fell through in view of the first defendant not being able to arrange the money, the plaintiff told the second defendant that the power of attorney given by him stood canceled and collected back the original power of attorney given by him.
It is on this case that the plaintiff filed a suit for a declaration by way of permanent injunction that he is the owner in possession of that property and the mutation showing the sale in favor of the first defendant, by the second defendant, was null and void, and that the second defendant was not having any authority to sell the land owned by the plaintiff, and hence the defendant be restrained from interfering with the ownership and possession of the plaintiff.
According to Plaintiff, the second defendant is alleged to be a deed writer and a clever person, with the copy of the power of attorney, fraudulently in collusion with the first defendant, executed the sale deed on 28.04.1987 for Rs. 30,000/. The plaintiff contended in the Court that the second defendant went to Registrar’s office and got the sale registered with a copy of the POA. Plaintiff pleaded that the second defendant (erstwhile POA holder) could not execute the sale deed in the absence of the original power of attorney, and the sub-registrar was supposed to verify the aspect from the second defendant under Sections 32, 33, and 34 of the Registration Act. The Himachal Pradesh High Court canceled the registration of the sale, saying that non-production of the original POA document was fatal to the sale and restored the property to the owner.
However, Supreme Court set aside the HC order and said the registration was valid as oral cancellation of POA has no validity before the law and that for registration of sale of land, the POA holder merely is required to produce a copy of the document and that original was not necessary.” We have no hesitation in rejecting the argument of the plaintiff that the non-production of the original power of attorney by the second defendant was fatal to a valid registration being effected.
In 2011, the Supreme Court, in the case of Suraj Lamp & Industries Private Limited vs. State of Haryana (SLP No. 13917 of 2009), issued notices to the governments of Delhi, Haryana, Punjab, and Uttar Pradesh and sought their responses on the discontinuance of such a practice. The four states confirmed that execution of a sale agreement and power of attorney will alone not amount to the sale unless proper deeds of conveyance are executed and registered. Accordingly, final orders were passed by the Supreme Court on October 11, 2011. The Apex Court ruled that property sale through power of attorney (PoA) is illegal and only registered sale deeds provide any legal holding to property transactions. To transfer property titles, a sale deed must be completed, after which the buyer must pay stamp duty and registration fees. (Read below the full story: Whether the sale of property through power of attorney is valid?)
