LexSURAJ LAMP & INDUSTRIES PVT. LTD. versus STATE OF HARYANA & ANR.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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[2011) 11 S.C.R. 848
SURAJ LAMP & INDUSTRIES Pvt."LTD.
v.
STATE OF HARYANA & ANR.
(Special Leave Petition (C) No. 13917 of 2009)
OCTOBER 11, 2011.
[R.V. RAVEENDRAN, A. K. PATNAIK AND H. L.
GOKHALE, JJ.]
Transfer of property:
Transactions under Sale Agreement/Genera/ Power of
Attorney/ Will (SA/GPA/Will) - HELD: Immovable property
can be legally and lawfully transferred/conveyed 9nly by a
registered deed of conveyance -
Courts will not treat
o transactions of the nature of 'GPA sales' or 'SA/GPA/Will
transfers' as completed or concluded tr,ansfers or as
conveyances, since they neither convey title nor do they create
any interest in an immovable property - Such· transactions
cannot be recognized as valid mode of ·transfer of·
E immoveable property - They cannot be recognized as deeds
of title, except to the limited extent of s. 53A of the TP Act nor
can they be relied upon or made the basis for mutations in
Municipal or revenue records - It is time that an end is put to
the pernicious practice of SA/GPA/Will transactions known as
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GPA sales - Directions given as regards SAIGPAs/Wills
entered before the date of the instant judgment - Transfer of
Property Act, 1882 - ss. 5, 53, 53-A, 54 and 55 - Power of
Attorney Act, 1882 - ss. 1-A and 2- Succession Act, 1925-
ss. 69 and 70 -
Stamp Act, 1899 - ss. 23 and 27 -
Registration Act, 1908 - ss. 17 and 49.
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Deeds and Documents:
Sale agreement/General Power of Attorney/Will - Scope
of - Advantages of registration of documents which purport
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848
SURAJ LAMP & INDUSTRIES PVT. LTD. v. STATE
849
OF HARYANA & ANR.
or operate to create, declare, assign, limit or extinguish any A
right title or interest - Explained.
In· Suraj Lamp and Industries Pvt. Ltd.1, the Supreme
Court pointing out ill-effects of transfer of immovable
property under Sale Agreements/General Power of 8
Attorney/Will ('SA/GPA/ Will transfers), asked the Solicitor
·General to give suggestions on behalf of the Union of
India. The Court also directed notice to issue to the States
of Delhi, Haryana, Punjab and Uttar Pradesh to give their
views on the matter. All the four States responded and
confirmed that 'SA/GPA/Will transfers' were required to be
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discouraged as they led to loss of revenue and increase
in litigation due to defective title.
Directing the special leave petition to be listed for
final disposal, the Court
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HELD: 1.1. When parties resort to 'SA/GPA/Will
transfers', the adverse effect is not only loss of revenue
(stamp duty and registration charges) but the greater
danger of generation of 'black' money. These E
transactions are not to be confused or equated with
genuine transactions where the owner of a property
grants a power of Attorney in favour of a family member
or friend to manage or sell his property, as he is not able
to manage the property or execute the sale, personally.
These are transactions, where a purchaser pays the full
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price, but instead of getting a deed of conveyance gets
a SA/GPA/WILL as a mode of transfer, either at the
instance of the vendor or at his own instance. [paras 2
and 5] [855-F-H; 858-F-G]
1.2. A high rate of stamp duty acts as a damper for
execution of deeds of conveyance for full value and
encourages SA/GPA/Will transfers. Reducing the stamp
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1.
Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana & Anr. 2009 (7) SCC
~3.
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850
SUPREME COURT REPORTS
[2011] 11 S.C.R.
A duty on conveyance to realistic levels will encourage
public to disclose the maximum sale value and have the
sale deeds registered. Though the reduction of the stamp
duty, may result in an immediate reduction in the revenue
by way of stamp duty, in the long run it will be
B advantageous for two reasons: (i) parties will be
encouraged to execute registered deeds of conveyance/
sale deeds without any under valuation, instead of
entering into SA/GPA/WILL transactions; and (ii) more and
more sale transactions will be done by way of duly
C registered sale deeds, disclosing the entire sale
consideration thereby reducing the generation of black
money to a large extent. Registration of documents also
makes the process of verification and certification of title
easier and simpler. Further, it reduces disputes and
o litigations to a large extent. [para 5 and 10] [858-F-H; 859-
A-B; 864-A]
Scope of Agreement of sale:
2.1. Section 54 of TP Act makes it clear that a contract
E of sale, that is, an agreement ofExcerpt shown. Read the full judgment & AI analysis in Lexace.