The Supreme Court of India has clarified that a General Power of Attorney (GPA) without an explicit proprietary interest in favor of the agent ceases upon the death of the principal and does not transfer ownership of an immovable property. Even when accompanied by an unregistered Agreement to Sell, such a GPA does not confer ownership rights unless followed by a registered sale deed.

A bench comprising Justices J.B. Pardiwala and R. Mahadevan ruled on the case, which involved a property dispute where Muniyappa, the original owner, executed an irrevocable GPA and an unregistered Agreement to Sell in favor of A. Saraswathi on April 4, 1986, for ₹10,250. The GPA authorized Saraswathi to manage and sell the property. Following Muniyappa’s death on January 30, 1997, Saraswathi sold the property to her son, M.S. Ananthamurthy, on April 1, 1998, for ₹84,000. Meanwhile, Muniyappa’s legal heirs also sold the property to another party in 2003, leading to a dispute.

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J. Manjula, the final recipient of the property through a gift deed, filed a suit for a permanent injunction against Ananthamurthy, asserting her lawful possession. The Trial Court and the High Court ruled in her favor, prompting an appeal to the Supreme Court.

The Supreme Court held that since the GPA did not create any proprietary interest in favor of Saraswathi, it automatically terminated upon Muniyappa’s death. Therefore, Saraswathi had no legal authority to sell the property to her son, making the sale invalid. The Court referenced its 2012 decision in Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana, which reaffirmed that an agreement to sell or a GPA does not transfer ownership unless followed by a registered sale deed.

The judgment further clarified that merely labeling a POA as ‘irrevocable’ does not make it so unless it explicitly secures an interest. The Supreme Court stated,

"A mere use of the word 'irrevocable' in a POA does not make the POA irrevocable. If the POA is not coupled with interest, no extraneous expression can make it irrevocable."

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The appellants argued that since the GPA and Agreement to Sell were executed on the same day, they should be read together to imply an interest in favor of Saraswathi. The Supreme Court rejected this argument, ruling that the documents must be registered to be legally enforceable. The Court further emphasized that an agreement to sell does not transfer title under the Transfer of Property Act, 1882, and must be registered under Section 17(1)(b) of the Registration Act to be legally effective.

The Court ruled that even if the GPA and the Agreement to Sell were executed by the same person in favor of the same beneficiary, this alone does not create ownership rights. The document must be registered to have legal validity. The judgment upheld the High Court’s decision dismissing the appeal and ruled in favor of the legal heirs and the final recipient of the property, concluding that Saraswathi had no valid title to transfer ownership.

Case Title: M. S. Ananthamurthy & Anr. v. J. Manjula Etc.

Appearance: For Petitioners: Ms. Farhat Jahan Rehmani, AOR
For Respondents: Mr. Mahesh Thakur, AOR, Mr. Ranvijay Singh Chandel, Adv., Mrs. Geetanjali Bedi, Adv.