GPA Property Deals in Bangalore: What the Supreme Court Says About Title

The Supreme Court has said twice in fourteen years that a property sold through a power of attorney and a bundle of side papers has not been sold at all. Yet such offers keep appearing for plots and houses around Bangalore, usually at a discount. The sections below explain what the court decided, why buyers on a GPA are left with nothing solid, and how to deal with a power of attorney the right way.

The Decisions That Settled It

The first ruling came in October 2011, in the case of Suraj Lamp and Industries against the State of Haryana. Immovable property, it declared, changes hands solely by way of a registered conveyance deed. Transfers assembled from a sale agreement, a GPA and a will pass no title and no interest, being a way around duty and registration charges.

The second came on 1 September 2025, in a dispute between Ramesh Chand and Suresh Chand. The court held that a sale agreement, a GPA, an affidavit and a receipt cannot pass ownership, and that no title flows even from a registered will unless proved under the law.

What survives

An authentic power of attorney is still lawful for its proper purpose, the 2011 ruling made clear. An owner may name a wife, husband, son, daughter, relative or manager to complete a sale. The agent signs a registered deed of sale on the owner's behalf, and that deed is what carries title.

What a GPA Actually Is

A principal signs a power of attorney so that an agent can act on the principal's behalf. A general one is wide in scope and may extend to dealing with property. At every stage, the principal is still the owner.

So the document passes authority and not ownership. At most it empowers the agent to execute the sale on the owner's behalf. By itself it gives the agent, or a buyer, no right in the property.

How the Bundle Sale Became Common

Across many cities, parties used a stock set of papers in place of a deed. It included an agreement to sell, a GPA granted to the buyer, an affidavit, a receipt, and frequently a will. The set passed for a sale although no duty or conveyance fee was paid.

The method was widespread in unapproved layouts and on revenue land at the edge of cities. Sellers with gaps in their title also liked it, because a registered deed would have exposed those gaps.

Risks a Buyer Carries

A buyer relying on such papers can be hurt in several ways, as these points show:

• Ownership never passes, which leaves the seller and the seller's heirs with a live claim
• The principal can revoke the GPA, and it ends on the principal's death
• A will can be altered whenever the maker wants, and works only after death, subject to proof
• Lenders typically refuse to fund a home that has no registered sale deed
• Resale is hard, since the next buyer meets the same defect
• The khata and municipal records refuse to move neatly to the buyer

Possession is of little comfort either. Since an amendment in 2001, Section 53A of the Transfer of Property Act has shielded a buyer in possession only if the agreement has been registered. Someone living in a flat on unregistered papers is at risk if the owner files a suit.

The Seller's Real Motives

Sellers cite the duty and registration saving. Karnataka duty reaches 5% plus surcharges, and registration is 2%, so the saving exists. It is the seller who markets it, but the buyer who bears the exposure.

Often there is a hidden reason as well: the seller cannot give a registered deed. Perhaps the land is farmland that has not been converted, the layout lacks approval, or the seller's own right comes from another GPA. The low price mirrors a flaw that moves to the buyer.

Signs of trouble

These signs suggest a GPA trap:

• A price much lower than similar properties nearby, offered on GPA terms alone
• A seller who is only the agent of an owner who skips every meeting
• An ownership chain in which earlier transfers also relied on GPAs and agreements
• Insistence on paying an advance ahead of a lawyer's review of the originals

Using a GPA in a Sale That Is Valid

Using a power of attorney is perfectly sound when it merely helps sign a registered deed for an owner who cannot attend. Think of an owner who lives overseas and asks a relative in the city to complete the sale. The buyer gets a registered conveyance, with the GPA doing no more than allowing the relative to sign.

The lawyer acting for the buyer should go through these steps:

1. Verify that whoever granted the GPA holds the recorded title, with no breaks in the chain
2. Study the GPA for clauses that cover selling this very property and signing the deed
3. Check registration or proper stamping, including for a GPA executed overseas
4. Obtain evidence that the principal is living and has not cancelled the authority, ideally from the owner in person
5. Pay the sale price into an account in the owner's name, never the agent's

If a seller holds a property only on an old GPA bundle, the cure is a new registered conveyance from the true owner or the legal heirs, and some owners will sign one for a fee. Until then the property should be regarded as one the seller does not own.

A Rule Worth Keeping

For any site or flat in Bangalore, pay only after the owner of record has signed and registered the deed. Support the payment with the encumbrance certificate, khata, tax receipts and legal advice on title. To have our team check the papers of a resale property, write to us on the contact page.