Delhi High Court dilutes Suraj Lamp Judgement
Perhaps it may be too early to comment, but it is to be seen if Delhi High Court has opened the Pandora box across India. It cannot be ruled out that many more interpretations may come up on the Apex Court’s decision in the matter of Suraj Lamp & Industries (P) Ltd. vs. State of Haryana. The holding arrived at in Suraj Lamp case was given interpretation in the matter of Pace Developers and Promoters Private Limited vs. Government of NCT by Justice Rajiv Shakdher.
The dispute in the present matter arose in the context of a circular dated 27.4.2012 whereby a clarification was issued to all the Registrars/ Sub-Registrars, that on the basis of a GPA, a Will, and Agreement to Sell, collectively or separately in respect of an immovable property, a conveyance cannot be executed i.e. no transfer of property will take effect until unless a clear sale deed is executed and duly registered by the executants in the office of the Registrar/ Sub-Registrar. The Delhi High Court has held that the above direction clearly misconstrues the observations of the Supreme Court made in the Suraj Lamp case. The relevant para from Suraj Lamp case as quoted is as under:
“….27. 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 agreement 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 bona fide/ genuine transactions…”.
To above, the Delhi High Court held that Supreme Court has not said that in no case a conveyance can be registered by taking recourse to a GPA. As long as the transaction is genuine, the same will have to be registered by the Sub-Registrar and thus in effect the circular in question was held to be contrary to the observations made by the Supreme Court in Suraj Lamp case. It however has been left open to the registering authority to examine the genuineness of the transactions which are reflected in the documents filed at the time of registration of conveyance.