Title Of Immovable Property Can't Be Transferred Through Sale Agreement Or General Power Of Attorney : Supreme Court

The Supreme Court recently held that no title could be transferred concerning immovable properties on the basis of an Agreement to Sell or based on
a General Power of Attorney. 

A bench of Justice Vikram Nath and Justice Rajesh Bindal observed as thus: 

“...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 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. 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 bench also rejected the argument that the 2011 judgment in Suraj Lamps & Industries Pvt. Ltd. Vs. State of Haryana and Anr- which held that title cannot be transferred through unregistered documents- applies only prospectively.

"Law is well settled that no right, title or interest in immovable property can be conferred without a registered document," the Court observed referring to sections 17 and 49 of the Registration Act and section 54 of the Transfer of Property Act, 1882. 

"The argument advanced on behalf of the respondent that the judgment in Suraj Lamps & Industries (supra) would be prospective is also misplaced. The requirement of compulsory registration and 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."

The appellant in this case was the defendant in a suit instituted by the respondent filed for possession and mesne profits with respect to a certain property. The suit was filed on the basis of a Power of Attorney, an agreement to sell, an affidavit and a will executed in favour of the respondent. 

The appellant was in possession of the property in question. The suit was contested citing that the appellant was the owner of the property since he received it as a gift from his brother, Laiq Ahmed. The appellant also contended that the suit was not maintainable since the documents on the basis of which the suit was filed were neither admissible nor enforceable under law.

The suit was decreed for possession and mesne profits in favour of the respondent. The appellant then approached the High Court, but his appeal was dismissed. 

Although the High Court in principle agreed to the argument regarding the unregistered document, it upheld the the decree of possession on the ground that the respondent had filed the suit as an Attorney for and on behalf of its owner Laiq Ahmed (brother of the appellant) and that Laiq Ahmed did not object to the respondent seeking possession of the suit property. On this ground alone, the High Court confirmed the decree of possession and dismissed the appeal. 

Subsequently, the appellant approached the Supreme Court. 

The Appellant argued that the Trial Court erred in decreeing the suit for possession and mesne profits on the basis of unregistered documents such as the Agreement to Sell, Power of Attorney, Affidavit and a Will. 

Law is well settled that no right, title or interest in immovable property can be conferred without a registered document, the Apex Court said. 

“The embargo put on registration of documents would not override the statutory provision so as to confer title on the basis of 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 Apex Court observed. 

In this regard, the Court placed reliance on the recent judgments in Ameer Minhaj Vs. Deirdre Elizabeth (Wright) Issar 2018) 7 SCC 639, Balram Singh Vs. Kelo Devi Civil Appeal No. 6733 of 2022 and M/S Paul Rubber Industries Private Limited Vs. Amit Chand Mitra in SLP (C) No. 15774 of 2022. 

The Apex Court did not agree with the view taken by the High Court and allowed the appeal while dismissing the suit. 

“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. That being not the contents of the plaint, we are unable to agree with the reasoning given by the High Court in the impugned order” the Apex Court concluded.