SC Allows Eviction of Seller Who Accepted Full Payment & Signed a Will, PoA in Favour of Buyer
Moneylife Digital Team 08 June 2023
While allowing the eviction of a seller, who accepted full payment and gave a memo of possession to the buyer, the Supreme Court clarified that a Will or general power of attorney (GPA) cannot be recognised as title documents or documents conferring right in any immovable property, and non-execution of any document by the GPA-holder consequent to it renders the said GPA useless. This is an interesting case where the seller was allowed to stay in the property for three months after the sale but refused to vacate the property, despite receiving the entire payment, issuing a memo for possession and issuing a Will and GPA in favour of the buyer. 
In an order, the bench of justice Dipankar Datta and justice Pankaj Mithal says the agreement to sell is not a document of title or a deed of transfer of property by sale and may not confer an absolute title upon Yogendra Rathi over the property in view of Section 54 of the Transfer of Property Act. "Nonetheless, the agreement to sell, the payment of the entire sale consideration as mentioned in the agreement itself and corroborated by the receipt of its payment and the fact that Mr Rathi was put in possession of the property in accordance with law as is also established by the possession memo on record, goes to prove that he is de-facto having possessory rights over the property in part performance of the agreement to sell."
"This possessory right of Mr Rathi is not liable to be disturbed by the transferer, Ghanshyam (the seller). The entry of Ghanshyam over part of the property subsequently is simply as a licensee of Mr Rathi. He (Ghanshyam) does not continue to occupy it in the capacity of the owner," the bench noted.
The case is related to Delhi-based Ghanshyam, who, on 10 April 2002, signed an agreement to sell his property in the Shakarpur area to one Yogendra Rathi after receiving the entire sale consideration. On the same day, he executed a Will bequeathing the property to Mr Rathi. He further executed a GPA in favour of the buyer. While the possession of the property was handed over to Mr Rathi, no sale deed was executed.
Mr Rathi, following a request, allowed Ghanshyam to occupy the ground floor and one room on the first floor of the property for three months as a licensee. However, after three months, Ghanshyam refused to vacate the ground floor and the room on the first floor. He contended that the documents had been manipulated on blank papers. However, he did not dispute the execution of any of these documents, that the possession memo was not executed, or that the sale consideration as per the agreement was not paid to him by Mr Rathi.
During the hearing, the SC observed, "In connection with the GPA and the Will so executed, the practice, if any, prevalent in any state or the high court (HC) recognising these documents to be documents of title or documents conferring right in any immovable property is in violation of the statutory law. Any such practice or tradition prevalent would not override the specific provisions of law which require execution of a document of title or transfer and its registration so as to confer right and title in immovable property of over Rs100 in value."
"Legally, an agreement to sell may not be regarded as a transaction of sale or a document transferring the proprietary rights in an immovable property but the prospective purchaser, having performed his part of the contract and lawfully in possession, acquires possessory title which is liable to be protected in view of Section 53A of the Transfer of Property Act, 1882. The said possessory rights of the prospective purchaser cannot be invaded by the transferer or any person claiming under him," the bench says.
Earlier, the trial court ruled in favour of Mr Rathi and admitted the appeal probably on the question as to whether documents, namely a power of attorney (PoA), the Will, the agreement to sell coupled with the possession memo and the receipt of payment of sale consideration would confer any title upon Mr Rathi to entitle him to a decree of eviction and mesne profits.
However, during the hearing before the trial court and first appellate court, Mr Rathi did raise the issue about the documents. The HC, in the second appeal, held that he cannot be permitted to raise the issue, and the appeal does not involve any substantial question of law.
According to the apex court, the PoA executed by Ghanshyam is of no consequence as on the strength of the PoA, neither the sale deed has been executed, nor any action pursuant thereof has been taken by the PoA holder which may confer a title upon Mr Rathi. "Non-execution of any document by the GPA holder consequent to it renders the GPA useless."
Similarly, it says, "The Will dated 10 April 2002 executed by Ghanshyam in favour of Mr Rathi is meaningless as the Will, if any, comes into effect only after the death of the executant and not before it. It has no force till the testator or the person making it dies. The said stage has not arrived in the present case and, therefore, even the Will in no way confers any right upon Mr Rathi."
Dismissing the appeal filed by Ghanshyam, the SC says Mr Rathi is entitled to a decree to evict the seller, and the bench does not find any error and illegality in such a decree being passed.
Samir Roy
4 months ago
Very informative
4 months ago
Great going on the clarification.. of certain .. documents wherein it is executed on stamp paper without registery.....

Also want you to cover .. the SRA regulations.. in details..

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