This article aims to discuss the concept of GPA sale from a slightly different angle. We know that Transfer of Property Act recognizes only sale as a mode of absolute transfer of ownership of any immovable property and no other legal mode is available therefor. As such there cannot be transfer of ownership by execution of traditional documents such as GPA, Agreement to sell, Affidavit, Receipt, Will etc. Judgment of Hon’ble Supreme Court in Suraj Lamp and Industries Private Limited vs State of Haryana, 183 (2011) DLT 1 (SC) has reiterated the position. Till this stage there is no problem as ratio thereof is clear and law declared thereby is well settled.
Transfer of Property Act- Suraj Lamp & Industries Pvt. Ltd. vs State of Haryana, 2011 Judgment by LatestLaws.in
Transfer of Property Act- Suraj Lamp & Industries Pvt. Ltd. vs State of Haryana, 2009 Judgment by LatestLaws.in
2. However, an in-depth analysis of the judgment in Suraj Lamp case can show that picture is not complete. A person having in his favour all the traditional documents may not be treated as owner in strict legal sense due to bar created by Section-54 of Transfer of Property Act, yet he can enjoy and exercise all the rights over the property against the entire world including the true owner who executed the traditional documents. And in that sense he has to be treated as owner of the property as no one in the entire world can put restriction on his enjoyment and handling of property. How?
3. It is Section-202 of the Contract Act which completes the picture projected in Suraj Lamp case. The provision reads as under:
“Section 202. Termination of agency where agent has an interest in subject-matter:- Where the agent has himself an interest in the property which forms the subject-matter of the agency, te agency cannot, in the absence of an express contract, be terminated to the prejudice of such interest.
Illustrations
(a) A gives authority to B to sell A's land, and to pay himself, out of the proceeds, the debts due to him from A. A cannot revoke this authority, nor can it be terminated by his insanity or death.
(b) A consigns 1,000 bales of cotton to B, who has made advances to him on such cotton, and desires B to sell the cotton, and to repay himself, out of the price, the amount of his own advances. A cannot revoke this authority, nor it is terminated by his insanity or death.”
Link to Indian Contract Act,1872 at LatestLaws.in
3.1. What is interesting to note is the fact that a person giving the power cannot revoke the same and even his death cannot change the situation if ingredients of the section is satisfied. Once GPA is found to be irrevocable, the person cannot prejudice the attorney by any act and so far as others are concerned, they cannot have any say in the matter.
4. Hon’ble Delhi High Court dealt with the situation after pronouncement of Suraj Lamp case and had invoked section-202 in favour of the attorney. The judgment is titled as Ramesh Chand vs Suresh Chand RFA 358/2000 dated 09.04.2012.
Transfer of Property Act - Ramesh Chand vs Suresh Chand, Delhi High Court Judgment by LatestLaws.in
4.1. However, there is twist in the above scenario. The above said judgment of Hon’ble High Court of Delhi has been stayed by the Hon’ble Supreme Court (vide order dated 05.09.2012 in SLP(C) 16706/2012) in following terms:
“In the meanwhile, operation of the impugned judgment as also the judgment and decree passed by the trial Court shall remain stayed.”
4.2. In such circumstances, one can raise a doubt as to whether the Ramesh Chand case should be relied upon. There have been some judgments of Hon’ble High Court of Delhi pronounced subsequent thereto but relying upon the Ramesh Chand case. A view may however be proposed that those subsequent judgments should not be considered in view of the stay as those judgments have not taken note of the stay granted by the Hon’ble Supreme Court.
5. We are therefore required to look beyond the Ramesh Chand case. It seems that law is well settled in respect of Section-202 Contract Act.
6. A division bench of Hon’ble High Court of Delhi in Harbans Singh vs Shanti Devi, 1977 RLR 487 had invoked the provision of Section-202 in favour of the attorney in respect of purchase of a shop.
Harbans Singh vs Shanti Devi, 1977 RLR 487
6.1. Hon’ble Delhi High Court in H.L. Malhotra v. Nanak Jai Singhani, 1986 RLR (Note) 89, Prem Raj v. Babu Ram 1991 RLR 458, Kuldeep Singh Suri v. Surinder Singh Kalra, (1999) 48 DRJ 463, D.R. Puri v. Kamlesh Sawhney, 2001 (60) DRJ 738, Ajay Gupta vs State Test. Cas. 33/1999 dated 05.07.2012 has also taken the same view.
6.2. In view of the above, there cannot be any doubt in respect of the proposition that a person having traditional documents regarding any immovable property can enjoy and exercise every right over the property and even the actual owner cannot create any disturbance due to bar created by Section-202 of the Contract Act.
7. However, some interesting points may also be noted. Hon’ble Delhi High Court speaking through a division bench in Asha M. Jain vs The Canara Bank And Ors 94 (2001) DLT 841 had recognized the concept of GPA sale in Delhi and had also used Section-202 of Contract Act and had also relied upon some of the judgments cited herein before. And everyone will say that the said judgment i.e. Asha jain case has been overruled by the Hon’ble Supreme Court in Suraj Lamp case and therefore not only the Asha Jain case has lost its value but also even the other cases relied upon therein cannot be followed.
Text of Asha Jain case is available at the following link.
Asha M. Jain vs The Canara Bank And Ors 94 (2001) DLT 841
7.1. But it is interesting to note that Hon’ble Supreme Court never overruled the judgment of Asha Jain case. The only observation related to Asha Jain case is as under:
“The observations by the Delhi High Court, in Asha M. Jain v. Canara Bank - 94 (2001) DLT 841, that the "concept of power of attorney sales have been recognized as a mode of transaction" when dealing with transactions by way of SA/GPA/WILL are unwarranted and not justified, unintendedly misleading the general public into thinking that SA/GPA/WILL transactions are some kind of a recognized or accepted mode of transfer and that it can be a valid substitute for a sale deed. Such decisions to the extent they recognize or accept SA/GPA/WILL transactions as concluded transfers, as contrasted from an agreement to transfer, are not good law.”
7.2. Clearly, the judgment in Asha Jain case has not been overruled. Only the observation related to recognition of GPA sale as concluded transfer has been declared as laying down bad law. Hon’ble Supreme Court has not commented upon the proposition based upon Section-202 of the Contract Act. We have started our discussion with the presumption that sale is only recognized mode and none else. So GPA sale is also not recognized. Contrary observation made in Asha Jain case has been overruled. So position does not change. The judgments based on Section-202 Contract Act have to hold the field till the Hon’ble Supreme Court pronounces otherwise.
8. Second interesting point for consideration is the observation made by the Hon’ble Supreme Court in Suraj Lamp regarding irrevocable GPA. Someone may say that since Hon’ble Supreme Court was of the view that even irrevocable power of attorney cannot transfer any right in property, so Section-202 cannot be of any help. The argument however cannot stand a proper scrutiny. The relevant observation of the Hon’ble Supreme Court in Suraj Lamp case reads as under:
“A power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property. The power of attorney is creation of an agency whereby the grantor authorizes the grantee to do the acts specified therein, on behalf of grantor, which when executed will be binding on the grantor as if done by him (see section 1A and section 2 of the Powers of Attorney Act, 1882). It is revocable or terminable at any time unless it is made irrevocable in a manner known to law …………………………………………… An attorney holder may however execute a deed of conveyance in exercise of the power granted under the power of attorney and convey title on behalf of the grantor.”
8.1. A bare look at the above shows that the same does not detract from the provision of Section-202 of Contract Act. Rather in the entire judgment, section-202 has not been referred even at once. The observation only says what it has said i.e. irrevocable attorney cannot be an instrument of transfer. Consequences of Section 202 have certainly to remain unaffected if the requirements thereof are satisfied.
9. Third interesting point for discussion may come from a very fertile mind who may say that when GPA is executed, the attorney does not have any interest in the property and therefore Section 202 cannot apply. The argument may be based on the reasoning that agreement to sell does not confer any right/interest in the property as per Section-54 of TPA.
9.1. The above apparently seems to be an attractive reasoning. However, the same does not stand the scrutiny at all. Reason is obvious. Secttion-54 TPA does not talk anything about the “interest” mentioned in Section-202 Contract Act and there is no reason to give a restrictive meaning to the expression “interest” available in Secction-202 which not only applies to immovable but also applies to movable properties. So interest can be of any type. A person having an agreement to sell in his favour has to have a clear interest in property in the nature of right to get specific performance of the agreement. Division Bench of Hon’ble High Court in Harbans Singh(supra) has dealt with the situation in following manner:
“For the purposes of the Law of Contract, therefore, it would not be useful to restrict the meaning of the word "interest" by the narrow compass in which this world is used at times in relation to immovable property. For instance, the last sentence of section 54 of the Transfer of Property Act states that a contract for sale of itself does not create any interest in or charge on immovable property. Similarly, section 17(1)(b) of the Registration Act makes only those documents compulsorily registerable which create, declare, assign, limit or extinguish any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards to or in immovable property. Since an agreement for sale does not create such a right, title or interest, it may not be compulsorily registerable. But in the context of the Contract Act, it cannot be said that a person who is the beneficiary of an agreement of sale has no right or interest in the subject-matter of the sale. He has a legally enforceable right and interest in enforcing the contract of sale by the execution of a sale deed and in getting possession of the property agreed to be sold under the provisions of the Specific Relief Act. In the English Common Law, the specific performance of contracts was a part of the law of contract. This is why Chapter Iv of the Contract Act deals with the performance of contracts which includes the performance of contracts relating to immovable property also. In fact, section 4 of the Transfer of Property Act says that the chapters and sections of that Act which relate to contracts shall be taken as part of the Indian Contract Act, 1872. Therefore, the respondent in whose favor the appellant had executed an agreement for the sale of an immovable property had an interest in the subject-matter of the contract, namely, the shop, turn the purposes of section 202 of the Contract Act if not for the purposes of the Transfer of Property and the Registration Acts.”
10. Some further points may also be considered. Division Bench in Harbans Singh (supra) has defined the expression “interest” as an advantage for the person. The observation made in the judgment is as under:
“The word "interest" is to be applied to a wide variety of cases under the Contract Act and must, therefore, be given a wide meaning to serve these wide purposes of the Act. It is not a term of art or a technical word. In jurisprudence, the word "interest" simply means an advantage or a benefit.”
10.1. So, question is not whether the buyer can use the traditional documents as shield or sword. Point to be considered is that the buyer has an advantage due to the agreement to sell whether he is using the same as shield or sword. This advantage is certainly an interest for the purpose of Section-202.
11. Further, as we all know that expiry of limitation period only extinguishes the remedy but does not affect the right itself. In D.R. Puri (supra), it was observed as under:
“The reason for this is that the right of the Defendants is not extinguished. It is only that the remedy cannot be resorted to by the Defendants because it is barred by time………………………………..The mere fact that the Defendants did not file a counter claim or a suit for specific performance, cannot lead to any conclusion that they have given up all their rights in the aforesaid plot of land. It can, at best, be said that the Defendants have lost the opportunity of perfecting their title.”
12. Furthermore, normally possession of property is also handed over to the buyer alongwith the traditional documents so by virtue of Section-53A of TPA, the owner cannot make any contest against the buyer. This certainly creates an interest in favour of the proposed buyer i.e. attorney of GPA.
12.1. Note may also be taken of a settled proposition that there is nothing in law to require any transaction to be completed in one document. Normally, GPA, Agreement to sell, Affidavit, Will & Receipt are executed in the transaction. In S. Chattanatha Karayalar v. The Central Bank of India Ltd. and Ors. AIR 1965 SC 1856 the Supreme Court stated in paragraph 3 of the Report as follows :
"The principle is well established that if the transaction is contained in more than one document between the same parties they must be read and interpreted together and they have the same legal effect for all purposes as if they are one document".
13. So, we have to consider the other documents to infer if attorney is having interest in the property which is subject matter of the GPA. Please, go through the Harbans Singh (supra) which has considered this point in very great detail and also D.R.Puri (supra). And atleast in Delhi, we are bound by the dictum of division bench of Hon'ble High Court of Delhi in Harbans Singh(supra) which has accepted the agreement to sell as an interest so far as Section-202 Contract Act is concerned. I have also gone through similar judgments passed by Hon'ble Calcutta High Court and Punjab High Court, so the situation will be similar even in Kolkata, Punjab, Haryana, Chandigarh.
14. The second twist in the story related to Suraj Lamp case pertains to its applicability to prior transactions. Question is whether judgment has prospective applicability only. An unnecessary confusion has arisen on this count. Hon’ble Supreme Court made some very interesting observations in one case which is titled as Maya Devi vs Lalta Prasad (dated 19.02.2014 in Civil Appeal 2458/2014). Two separate opinions were pronounced by the Court in the said case, one by Justice K.S. Radhakrishnan and the other concurring opinion by Justice Vikramajit Sen.
15. We should first note the observation of Justice Vikramajit Sen which is as under:
“I have perused the judgment of my learned and esteemed Brother Radhakrishnan, and I entirely and respectfully agree with his conclusion that the appeal deserves to be allowed. My learned Brother has succinctly analysed the sterling judgment in Suraj Lamp and Industries Private Limited vs State of Haryana (2009) 7 SCC 363, which has been rendered by a Three-Judge Bench of this Court. I completely concur with the view that since General Power of Attorney (GPA) in favour of the Appellant was executed and registered on 12.05.2006, it could not be impacted or affected by the Suraj Lamp dicta.Furthermore, a reading of the order of the Executing Court as well as of the High Court makes it palpably clear that both the Courts had applied the disqualification and illegality imposed upon GPAs by Suraj Lamp, without keeping in mind that the operation of that judgment was pointedly and poignantly prospective. This question has been dealt with by my esteemed Brother most comprehensively.
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What has also escaped the attention of the Court is that Suraj Lamp has prospective operation, thereby rendering it inapplicable to the subject 2006 transaction.”
15.1 It appears that Justice Vikramajit Sen has not only said that the judgment in Suraj Lamp is prospective but has also indicated that Justice Radhakrishnan said the same thing.
Unfortunately however in the entire opinion of Justice Radhakrishnan, the expression “prospective” has been used only at one place that too while recoding the submission of counsel for the appellant. The observation reads as under:
“Learned counsel submitted that in the final judgment which is reported in Suraj Lamp and Industries Private Limited (2) Through Director v. State of Haryana & Anr. (2012) 1 SCC 656, this Court has clarified the position that the judgment would not affect the validity of sale agreements and powers of attorney executed in genuine transactions and that the judgment would operate only prospectively.”
15.2. On this submission of counsel about prospective effect, Justice Radhakrishnan did not make any comment. Rather he premised his opinion on the basis of paragraph-27 of the judgment in Suraj Lamp case which is about protection of genuine transaction.
16. Be that as it may, Justice Vikramajit Sen has declared the Suraj Lamp ratio as prospective. If a court pronounces majority and minority judgments then the observations made in minority judgment are not binding. But if strength of bench is two and both the judges pronounce different but concurring opinions, both will be binding. So if Justice Vikramajit Sen holds the Suraj Lamp ratio as prospective, the same has to be treated as binding unless some other precedent or interpretation exists contrary to that opinion.
17. In the same line, division bench of Hon’ble High Court of Delhi in Urmila Devi vs Laxman Singh RFA (OS) 85/2014 dated 20.03.2015 has held the Suraj Lamp ratio as prospective. Observation reads as under:
“The judgment of the Supreme Court in (2012) 1 SCC 656, Suraj Lamps and Industries Pvt. Ltd. v. State of Haryana & Anr. has prospective effect and cannot affect transactions already effected. The reliance thereon to challenge title is misconceived.”
18. Now, we should carefully go through the judgment pronounced in Suraj Lamp case. It appears that Court was invited by the counsels to make the decision prospectively. The relevant observation reads as under:
“It has been submitted that making declaration that GPA sales and SA/GPA/WILL transfers are not legally valid modes of transfer is likely to create hardship to a large number of persons who have entered into such transactions and they should be given sufficient time to regularize the transactions by obtaining deeds of conveyance. It is also submitted that this decision should be made applicable prospectively to avoid hardship.”
18.1. However, the court did not declare the judgment as prospective and proceeded to comment as under:
“We have merely drawn attention to and reiterated the well-settled legal position that SA/GPA/WILL transactions are not `transfers' or `sales' and that such transactions cannot be treated as completed transfers or conveyances. They can continue to be treated as existing agreement of sale. Nothing prevents affected parties from getting registered Deeds of Conveyance to complete their title. The said `SA/GPA/WILL transactions' may also be used to obtain specific performance or to defend possession under section 53A of TP Act. If they are entered before this day, they may be relied upon to apply for regularization of allotments/leases by Development Authorities. We make it clear that if the documents relating to `SA/GPA/WILL transactions' has been accepted acted upon by DDA or other developmental authorities or by the Municipal or revenue authorities to effect mutation, they need not be disturbed, merely on account of this decision.
We make it clear that our observations are not intended to in any way affect the validity of sale agreements and powers of attorney executed in genuine transactions. For example, a person may give a power of attorney to his spouse, son, daughter, brother, sister or a relative to manage his affairs or to execute a deed of conveyance. A person may enter into a development agreement with a land developer or builder for developing the land either by forming plots or by constructing apartment buildings and in that behalf execute an agreement of sale and grant a Power of Attorney empowering the developer to execute agreements of sale or conveyances in regard to individual plots of land or undivided shares in the land relating to apartments in favour of prospective purchasers. In several States, the execution of such development agreements and powers of attorney are already regulated by law and subjected to specific stamp duty. Our observations regarding `SA/GPA/WILL transactions' are not intended to apply to such bonafide/genuine transactions.”
18.2. It is clear from the above that the Court only protected genuine transaction and such other transactions on which specified government agencies have already acted upon but the Court did not declare the decision to have prospective effect. One interesting point should also be noted. Asha Jain(supra) had accepted the GPA sale as a valid sale transaction and this law has been specifically declared Suraj Lamp case as bad law. If Suraj Lamp case is accepted as having prospective effect and we accept GPA sale entered into prior to the date of judgment, we would be virtually relying upon the ratio of Asha Jain(supra) despite having been specifically declared as bad law. Such an interpretation of judgment in Suraj Lamp will be clearly embarrassing.
19. So far as judgment passed by division bench of Hon’ble High Court of Delhi in Urmila Devi(supra) is concerned, the same does not pose any problem as an earlier division bench judgment has taken contrary approach. The said judgment being rendered earlier in time than the Urmila Devi(supra) and being of equal strength will take precedence over the later judgment passed. The said judgment is titled as Harish Sharma vs Raj Kumar RFA(OS) 99/2013 dated 31.10.2013.
20. The actual problem is with judgment rendered by Hon’ble Supreme Court in Maya Devi(spra) which says that Suraj Lamp is prospective. We have seen that in Suraj Lamp, the counsels invited the court to make the decision prospective but the court did not do so except protective genuine transaction or transactions on which specified government agencies have already acted upon. Suraj Lamp was rendered by a three judges bench whereas Maya Devi(supra) was rendered by two judges bench. In normal circumstances, there could not have been any problem in saying that the larger bench decision would take precedence. The problem however is that Maya Devi(supra) has dealt with Suraj Lamp case and then has declared that the ratio thereof is prospective. The question therefore is as to whether even in such circumstances, we should not treat the Maya Devi(supra) as binding and should accept that Suraj Lamp case is not prospective. The answer is not free from difficulty.
21. Answer is however required and in there cannot be anything better than a full bench decision of Hon’ble High Court of Delhi rendered though in a different story. We all know that there is no presidential notification notifying any Scheduled Tribe in Delhi.
21.1. The issue of migrants being entitled to benefit of reservation was considered by the Constitution Bench of the Supreme Court in the decision reported as (1990) 3 SCC 130 Marri Chandra Shekhar Rao vs. Dean, Seth G.S. Medical College & Ors. The question posed therein was as to whether one who is recognized as a Scheduled Tribe in the State of his origin and birth continues to have the benefits or privileges or rights in the State of migration or wherever he later goes? The constitution bench answered the question in negative.
21.2. The same question was re-agitated before another Constitution Bench of the Supreme Court and the opinion is reported as (1994) 5 SCC 244 Action Committee on Issue of Caste Certificate to scheduled Castes and Scheduled Tribes in the State of Maharashtra and Anr. v. Union of India (UOI) and Anr. The question posed was: Where a person belonging to a caste or tribe specified for the purposes of the Constitution to be a Scheduled Caste or Scheduled Tribe in relation to State A migrates to State B where a caste or tribe with same nomenclature is specified for the purposes of the Constitution to be a Scheduled Caste or Scheduled Tribe in relation to that State B, will that person be entitled to claim the privileges and benefits admissible to persons belonging to the Scheduled Castes and/or Scheduled Tribes in State B? The constitution bench again answered the question in negative.
21.3. A discordant note was struck by a three Bench decision of the Supreme Court reported as (2005) 3 SCC 1 S. Pushpa vs. Sivachanmugavelu & Ors which despite noting the constitution bench judgments held such persons entitled for reservation in union territory.
21.4. But, in the decision of a two Judge Bench of the Supreme Court reported as 2009 (15) SCC 458 Subhash Chandra & Anr. Vs. DSSSB & Ors., the correctness of the law declared in S.Pushpa’s case was doubted and the reasoning was opined to be obiter.
21.5. Clearly, there was an interesting conflict. While on the one hand constitution benches said “A” but the three judges bench in Pushpa(supra) understood the same as “B” and held accordingly, but on the other hand a two judges bench said that it understood the constitution bench saying “A” and therefore will not follow the three judges bench. The question simply was as to what was required to be followed.
22. Noting conflicting decisions by different Benches, some following the law declared by the Supreme Court in S.Pushpa’s case and some following the law declared in Marri’s and Action Committee’s case, the matter was referred to a Full Bench of this Court and we have the decision of the Full Bench reported as 2012 (132) DRJ 169 Deepak Kumar & Ors. Vs. District & Sessions Judge Delhi.
22.1. The full bench of Hon’ble High Court of Delhi in Deepak Kumar(supra) has observed as under:
“It is true that the concerns and interpretation placed by Subhash Chandra flow logically from a reading of the larger Supreme Court Constitution Bench rulings. Nevertheless, since this Court is bound by the doctrine of precedent, and by virtue of Article 141 has to follow the decision in Pushpa, as it deals squarely with the issue concerning status of citizens notified as scheduled castes from a state to a Union Territory, it was not open, as it is not open to this court even today, to disregard Pushpa.
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The decisions in Marri, Action Committee, Milind and Channaiah have all ruled that scheduled caste and tribe citizens moving from one State to another cannot claim reservation benefits, whether or not their caste is notified in the state where they migrate to, since the exercise of notifying scheduled castes or tribes is region (state) specific, i.e " in relation" to the state of their origin. These judgments also took note of the Presidential Notifications, which had enjoined such citizens to be "residents" in relation to the state which provided for such reservations.
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The considerations which apply to Scheduled Caste and Tribe citizens who migrate from state to state, apply equally in respect of those who migrate from a state to a union territory, in view of the text of Articles 341(1) and 342(1), i.e. only those castes and tribes who are notified in relation to the concerned Union Territory, are entitled to such benefits. This is reinforced by the Presidential Notification in relation to Union Territories, of 1951. Only Parliament can add to such notification, and include other castes, or tribes, in view of Articles 341(2), Article 341(2) which is also reinforced by Article 16(3). States cannot legislate on this aspect; nor can the executive - Union or state, add to or alter the castes, or tribes in any notification in relation to a state or Union Territory, either through state legislation or through policies or circulars. Differentiation between residents of states, who migrate to states, and residents of states who migrate to Union Territories would result in invidious discrimination and over-classification thus denying equal access to reservation benefits, to those who are residents of Union Territories, and whose castes or tribes are included in the Presidential Order in respect of such Union Territories. The Pushpa interpretation has led to peculiar consequences, whereby: (i) The resident of a state, belonging to a scheduled caste, notified in that state, cannot claim reservation benefit, if he takes up residence in another state, whether or not his caste is included in the latter State's list of scheduled castes; (ii) However, the resident of a state who moves to a Union Territory would be entitled to carry his reservation benefit, and status as member of scheduled caste, even if his caste is not included as a scheduled caste, for that Union Territory; (iii) The resident of a Union Territory would however, be denied the benefit of reservation, if he moves to a State, because he is not a resident scheduled caste of that State. (iv) The resident of a Union Territory which later becomes a State, however, can insist that after such event, residents of other states, whose castes may or may not be notified, as scheduled castes, cannot be treated as such members in such newly formed states; (v) Conversely, the scheduled caste resident of a state which is converted into a Union Territory, cannot protest against the treatment of scheduled caste residents of other states as members of scheduled caste of the Union Territory, even though their castes are not included in the list of such castes, for the Union Territory.
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The ruling in Pushpa is clear that if the resident of a state, whose caste is notified as Scheduled caste or scheduled tribe, moves to a Union Territory, he carries with him the right to claim that benefit, in relation to the Union Territory, even though if he moves to another state, he is denied such benefit (as a result of the rulings in Marri and Action Committee). The ruling in Pushpa, being specific about this aspect vis-à-vis Union Territories, is binding; it was rendered by a Bench of three judges.
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By virtue of the specific ruling applicable in the case of Union Territories, in Pushpa, whatever may be the doubts entertained as to the soundness of its reasoning, the High Courts have to apply its ratio, as it is by a formation of three judges; the said decision did notice the earlier judgments in Marri and Action Committee. Article 141 and the discipline enjoined by the doctrine of precedent compels this Court to follow the Pushpa ruling.”
22.2. It appears that despite noting the grave repercussion of Pushpa(supra) and further the fact that contrary scenario was flowing from constitution bench judgments, the full bench of Hon’ble High Court of Delhi accepted the Pushpa(supra) as a binding precedent.
22.3. If we go by the full bench judgment, following scenario will emerge in our present context:
- Place Suraj Lamp case at the footing of constitution bench judgments in the above example;
- Place Maya Devi(supra) at the footing of three judges bench decision in Pushpa(supra);
- Pushpa(supra) understood the ratio of constitution bench judgments in a particular way and held accordingly. Maya Devi(supra) understood the ratio of Suraj Lamp in a particular way and held accordingly;
- There are deficiencies in the Pushpa(supra) so far as formation of opinion regarding constitution bench judgment is concerned. Similarly, there are deficiencies in Maya Devi(supra) so far as formation of opinion regarding Suraj Lamp is concerned;
- Opinion given in Pushpa(supra) does not logically flow from constitution bench judgments as contrary opinion flows from the same. Similarly, opinion formed in Maya Devi(supra) does not logically flow from Suraj Lamp;
- Pushpa(supra) is being followed in Delhi in terms of full bench judgment. Similarly, Maya Devi(supra) has to be followed.
22.4. Full bench clarified that understanding formed in Pushpa(supra) could not have been deviated from by a subsequent two judges bench and therefore Pushpa(supra) has to be followed. Naturally, the present context is on better footing as there is no other opinion of Hon’ble Supreme Court which goes against Maya Devi(supra). Needles to say that judgment in Harish Sharma(supra) rendered by Hon’ble High Court of Delhi cannot be followed in view of judgment pronounced in Maya Devi(supra).
23. As per Maya Devi(supra), the Suraj Lamp judgment has prospective effect. So we have to accept that Suraj Lamp can be applied only prospectively.
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24. Despite the above, on academic front, someone may be of the view that Suraj Lamp is not restricted to transaction entered into after the date of judgment and that the same will apply to every transaction as the statutory provisions govern the same and a valid sale transaction can be completed only when a valid registered sale deed exists. Apart from the fact that ratio of full bench judgment in Deepak Kumar(supra) itself may be doubted (this version shall be dealt with in some other paper), in forming the opinion, one can also be influenced by a constitution bench judgment in CBI vs Keshub Mahindra 11.05.2011 which says “No decision by any court, this Court not excluded, can be read in a manner as to nullify the express provisions of an Act”. So if Suraj Lamp is applied only prospectively, the same will nullify the statutory provisions.
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25. Registration of General Power of Attorney is now open in Delhi
It is important to note that the Delhi Government had stopped the transfer of properties through General Power of Attorney, in view of the judgement given by the Hon'ble Supreme Court in the case of Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana. Consequently, the Revenue Department of Delhi issued a circular on 26th April, 2012 that instructed all the registrars and sub-registrars not to register any GPA, will or agreement to sell, through which any immoveable was being transferred .
However, later on 5th May, 2013, the Delhi high court in the matter of Pace Developers and Promoters Pvt. Ltd. Vs. Govt. of NCT, struck down the controversial circular of the Delhi State government that restricted transfer of property through a general power of attorney. The judgement said that as long as the transaction is genuine, the same will have to be registered by the sub-registrar.
Subsequently, the Revenue Department of Delhi Government issued a fresh circular on 22nd July, 2013 wherein it stated that transfer of property through general power of attorney and special power of attorney (SPA) by any registered property owner will be allowed in favour of their spouse, son, daughter, brother, sister or any other relative or person of his trust to manage his property or empowering him to execute any further deed of transfer including conveyance, sale and gift deed.
In a circular issued on 22 July 2013, the Government of NCT of Delhi clarified the following:
25.1. There is nothing in existing provisions of law that prevents the registered property owner holding registered and valid deed of transfer, like sale deed, gift deed, partition deed, relinquishment/release deed, from executing general power of attorney/special power of attorney in favour of their spouse, son, daughter, brother, sister or any other relative or person of trust to manage his property or empowering him/them to execute any further deed of transfer, including conveyance, sale, gift deed on behalf of the registered owner.
25.2. Lease can be validly transferred only under a registered assignment of lease.The registered power of attorney is competent to execute further deed of transfer by any authorised mode, like sale, gift, conveyance in accordance with the terms and conditions of the power of attorney. It is also legally tenable if the registered owner enters into a land development agreement or builder agreement and executes a registered attorney in favour of such land developer or builder with respect to his immovable property to facilitate land or building development provided the builder agreement is also produced and registered.
25.3. The immovable property can be legally and lawfully transferred only by a registered deed, like sale, gift and conveyance. Transaction in respect of immovable property by merely executing GPA/special power of attorney/Will do not convey any title and thus, are not legally recognized valid mode of transfer of the immovable property as per the existing provisions of law.
25.4. As per the circular, property transaction through GPA will be considered “legal” but it will not be considered as transfers of title for mutation of property.
It directed all the Sub Registrars in Delhi to once again allow the registration of such General Power of Attorneys.
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ment of lease, transfer of lease registration in Delhi
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