Let’s understand what exactly a General Power of Attorney.
A General Power of Attorney also commonly known as GPA is a stated document according to which an individual (Principal) appoints another individual (GPA Holder) to conduct all the activities for and in place of the principal. Anything initiated and done by the GPA holder in conformity with the GPA are binding on the principal in the sense that the Principal did it on his own. It is very common in India in the real estate space to use a GPA for most property engagements and transactions i.e. selling, buying, renting, leasing, mortgaging etc.
GPA has been commonly misused earlier in India in various property dealings.
Let’s understand how it was misused
A GPA used to be misused via buyers and sellers for capital gains, taxations etc. This took place by placing an agreement of selling along with a will with the GPA backing the buyer by the seller and sharing possession of the property for an undisclosed sale.
However, in a matter Suraj Lamp & Industries Pvt. Ltd. VS State of Haryana & Anr., the Hon’ble Supreme Court However, beheld its judgment dated October 11, 2011, stating that transactions of such nature of GPA Sales does not govern any title and it also does not amount to transfer, they cannot recognize or validate any mode immovable property transfer.
How is GPA used in authentic property transactions?
The property owner can execute a GPA in support of a family member, friend, relative for managing and selling his property, in case he is unable to manage the property personally for some reason. A person is also allowed to enter into a developing agreement with a builder for creating the land by either plot formation or apartment construction. This can lead to executing a sale agreement and issue a power of attorney giving power to the land developer for sale agreement execution with respect to individual plots or undivided shares in the land related to apartments in support of the prospective buyers. In many states, such development agreements are executed via law regulation subject to specific stamp duty.
Important Note: GPA should not be viewed as a transfer instrument of any kind of title or right in property.
Executing GPA in India:
At the time of executing the GPA, if the Principal stays in any part of India, the GPA is supposed to be executed before and has to be authenticated by the Registrar of the district where the Principal resides.
Executing GPA outside India (by an NRI/PIO/OCI):
If the Principal is out of country during GPA execution, the GPA is supposed to be executed before and authenticated by the Indian Consulate or Notary Public.
How to Register GPA executed in India?
GPA registration is done at the offices of Sub-Registrar. GPA in India must be done on stamp paper of standard value. The Principal has to visit the sub-registrar office along with the GPA holder for registration. Original documents with copies of proof of ownership, residence and identity should be brought by the executed GPA to the sub-registrar. Two witnesses are required who should have proper identification for GPA registration.
How to Register GPA executed outside India?
GPA registration executed in foreign land is also done at the office of the sub-registrar. GPA execution outside India can also be drafted on plain paper and must be executed beforehand. It further must be authenticated by the Indian Consulate or Notary Public. GPA is further sent to India to the GPA holder. The holder must visit the office of the sub-registrar with the GPA for registration. The GPA is supposed to be presented to the sub-registrar along with the original documents of proof of residence, identity.
Cancellation of GPA registered in India:
Cancellation of a registered GPA requires a cancellation or revocation deed. It then must be registered with the sub-registrar in the same manner of execution of GPA.
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