The Supreme Court has reiterated that a title with respect to an immovable property cannot be transferred based on an Agreement to Sell or a General Power of Attorney.
It rejected the contention that the judgment in the case of Suraj Lamps and Industries Pvt. Ltd. v. State of Haryana and Anr. 183 (2011) DLT 1 (SC) is only prospective.
The Court was deciding an appeal against the judgment of the Delhi High Court which had affirmed a Trial Court’s judgment of decreeing the suit for possession and mesne profits.
The two-judge Bench of Justice Vikram Nath and Justice Rajesh Bindal held, “Having considered the submissions at the outset, it is to be emphasized that irrespective of what was decided in the case of Suraj Lamps and Industries(supra) the fact remains that no title could be transferred with respect to immovable properties on the basis of an unregistered Agreement to Sell or on the basis of an unregistered General Power of Attorney. … The argument advanced on behalf of the respondent that the judgment in Suraj Lamps & Industries (supra) would be prospective is also misplaced.”
The Bench said that the Registration Act, 1908 clearly provides that a document which requires compulsory registration under the Act, would not confer any right, much less a legally enforceable right to approach a Court of Law on its basis.
In this case, the appellant was a defendant in the suit for possession and mesne profits instituted by the respondent with respect to the property in question. The suit was filed based on a Power of Attorney, an agreement to sell, an affidavit, and a will executed in favour of the respondent. The appellant, admittedly, was in possession of the property in question and the suit was contested on several grounds that the appellant was the owner of the property having received the same based on a Hiba (oral gift) from its owner, his own brother. Secondly, the suit was not maintainable as none of the documents based on which the suit was filed were neither admissible nor enforceable under the law.
The findings recorded by the Trial Court were that all the issues were decided against the appellant and in favour of the respondent except issue no. 8 and decree for possession along with mesne profits was granted. In a regular appeal filed under Section 96 of the Code of Civil Procedure, 1908 (CPC) the High Court confirmed the finding with regard to the claim of the appellant regarding Hiba in his favour and held that the appellant had failed to prove the same. With respect to the other argument regarding the suit being maintained based on an unregistered document, the High Court, although in principle agreed but proceeded to uphold the decree of possession on the ground that the respondent had filed the suit as an Attorney for and on behalf of its owner and that he was not objecting to the respondent seeking possession of the suit property. On this sole ground, it confirmed the decree of possession and dismissed the appeal.
The Supreme Court in the above regard observed, “Even if these documents i.e. the Agreement to Sell and the Power of Attorney were registered, still it could not be said that the respondent would have acquired title over the property in question. At best, on the basis of the registered agreement to sell, he could have claimed relief of specific performance in appropriate proceedings. In this regard, reference may be made to sections 17 and 49 of the Registration Act and section 54 of the Transfer of Property Act, 1882.”
The Court further noted that the law is well settled that no right, title, or interest in immovable property can be conferred without a registered document. It also said that the embargo put on registration of documents would not override the statutory provision to confer title based on the unregistered documents with respect to immovable property.
“Once this is the settled position, the respondent could not have maintained the suit for possession and mesne profits against the appellant, who was admittedly in possession of the property in question whether as an owner or a licensee. … The requirement of compulsory registration and its effect on non-registration emanates from the statutes, in particular the Registration Act and the Transfer of Property Act. The ratio in Suraj Lamps & Industries (supra) only approves the provisions in the two enactments. Earlier judgments of this Court have taken the same view”, said the Court.
The Court concluded that in case the respondent wanted to evict the appellant treating him to be a licensee, he could have maintained a suit on behalf of the true owner or the landlord under specific instructions of Power of Attorney as landlord claiming to have been receiving rent from the appellant or as Attorney of the true owner to institute the suit on his behalf for eviction and possession.
Accordingly, the Apex Court allowed the appeal, set aside the impugned judgment, and dismissed the suit.
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