Gujarat High Court
Manubhai Bhanubhai Gajera vs Gujarat Revenue Tribunal on 15 February, 2021
Author: Vineet Kothari
Bench: Vineet Kothari, Gita Gopi
C/LPA/1416/2014 JUDGMENT DT. 15/02/2021
MANUBHAI BHANUBHAI GAJERA AND OTHERS V. GUJARAT REVENUE REVENUE TRIBUNAL AND OTHERS
IN THEHIGHCOURTOF GUJARATAT AHMEDABAD
1. R/LETTERSPATENTAPPEALNO. 1416of 2014
In
R/SPECIALCIVILAPPLICATIONNO. 3710of 2011
With
CIVILAPPLICATION(FORDIRECTION) NO. 1 of 2019
In
R/LETTERSPATENTAPPEALNO. 1416of 2014
In
R/SPECIALCIVILAPPLICATIONNO. 3710of 2011
FORAPPROVALANDSIGNATURE:
HONOURABLEDR. JUSTICEVINEETKOTHARI
and
HONOURABLEMS. JUSTICEGITAGOPI
==============================================================================
1 Whether Reporters of Local Papers may be allowed to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the judgment ?
4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ?
============================================================================== MANUBHAI BHANUBHAI GAJERA & 1 other(s) Versus GUJARAT REVENUE TRIBUNAL & 5 other(s) ============================================================================== Appearance:
MR DHAVAL DAVE, SR. ADVOCATE WITH MR ARPIT A. KAPADIA Page 1 of 23 Downloaded on : Wed Jan 12 09:32:17 IST 2022 C/LPA/1416/2014 JUDGMENT DT. 15/02/2021 MANUBHAI BHANUBHAI GAJERA AND OTHERS V. GUJARAT REVENUE REVENUE TRIBUNAL AND OTHERS (3974) for the Appellant(s) No. 1,2,2.1,2.2 for the Respondent(s) No. 7 MR UTKARSH SHARMA, ASST. GOVERNMENT PLEADER(1) for the Respondent(s) No. 1 MR R.R. MARSHALL, SR. ADVOCATE WITH MR. S.K. PATEL (654) for the Respondent(s) No. 4 MR. AKASH R PATEL (6715) for the Respondent(s) No. 10,8,9 MR. ASIM PANDYA, SR. ADVOCATE WITH MR. MANAN BHATT (6535) for the Respondent(s) No. 6 RULE SERVED(64) for the Respondent(s) No. 2,3,5 ============================================================================== CORAM: HONOURABLE DR. JUSTICE VINEET KOTHARI and HONOURABLE MS. JUSTICE GITA GOPI Date: 15/02/2021 ORALJUDGMENT ( PER : HONOURABLE DR. JUSTICE VINEET KOTHARI)
1. This intra-Court appeal by Appellants-Petitioners, Manubhai Bhanubhai Gajera and Mohanbhai Veljibhai Tank, now represented by his Legal Heirs, is directed against the order dated 03.12.2014 of the learned Single Judge, by which the challenge laid by the Petitioners to the order of the learned Charity Commissioner, Surat dated 21.08.2009 in Application No.36/42/2005, which order was confirmed by the Gujarat Revenue Tribunal vide its order dated 25.01.2011 in Appeal Nos.7 and 9 of 2009, was rejected.
2. The learned Charity Commissioner permitted the sale of the Trust property in question by public auction by the Trust known as "Bai Pirojsha Maneklal Patel Singanporwala English High School for Girls Trust", a Public Charitable Trust, which property was vested in Surat Page 2 of 23 Downloaded on : Wed Jan 12 09:32:17 IST 2022 C/LPA/1416/2014 JUDGMENT DT. 15/02/2021 MANUBHAI BHANUBHAI GAJERA AND OTHERS V. GUJARAT REVENUE REVENUE TRIBUNAL AND OTHERS Parsi Panchayat, a Trust registered under the Bombay Public Trusts Act. The sale in question was made in favour of the Respondent No.4, Mr. R.D. Chaudhary, for a open bid sum of Rs.2.72 Crores, as against the Upset Price of Rs.1,02,11,033/-.
3. The present Appellants-Petitioners claimed to be the Agreement Holders under the Agreement to Sell allegedly executed in their favour by the Tenant of the land in question, an Agreement which is said to have been executed on 13.09.2000, for which the Appellants-Petitioners had also filed a Civil Suit for specific performance being Civil Suit No.299 of 2007, which was dismissed by the Civil Court on 23.02.2018. Another Suit for similar purpose was also filed being Civil Suit No.300 of 2007, which came to be dismissed under Order 7 Rule 11 of the Civil Procedure Code on 10.07.2019. Thus, these Agreement Holders, the Appellants- Petitioners, could not get a right crystallized in their favour under the said Agreement to Sell dated 13.09.2000; still, they sought to challenge the said sale in favour of the Respondent No.4, Mr. R.D. Chaudhary, which was repelled on the ground that the Trust was exempt from the rigors of the Gujarat Tenancy and Agricultural Lands Act, 1948.
4. The learned Single Judge, however, rejected the said challenge by dismissing both the petitions, namely, Special Civil Application No.7559 of 2011 filed by the Power of Attorney of one of the Tenants to support the present Appellants-Petitioners and also Special Civil Application No.3710 of 2011 filed by these Agreement Holders themselves with the following observations:-
Page 3 of 23 Downloaded on : Wed Jan 12 09:32:17 IST 2022C/LPA/1416/2014 JUDGMENT DT. 15/02/2021 MANUBHAI BHANUBHAI GAJERA AND OTHERS V. GUJARAT REVENUE REVENUE TRIBUNAL AND OTHERS "8. Having heard learned advocates for the respective parties and having gone through the material on record, this Court finds as under.
8.1 Special Civil Application No.7559 of 2011 is filed by one of the many tenants of the property in question, through a Power of Attorney holder, who had chosen not to offer any bid to buy the property in question, in the proceedings before the Charity Commissioner. He can not have any better right than a tenant over the property of a Trust. Though in this petition, the right of the tenant is not being adjudicated, with a view to see that what importance needs to be attached to the say of the said tenant, this Court has only prima facie examined his claim and it is found that his title over the property in question is less likely to the accepted by the concerned authorities, in view of the provisions of law in that regard. It is also indicated by the parties that the proceedings in that regard before the Revenue Authorities are already adjudicated against the tenants. While recording this, it is clarified that, this is only for the purpose of the present petition and the rights of the tenant are not being examined in this petition. Suffice it to hold that it is the said tenant, who is challenging the sale in question, and who had also opted out from bidding before the Charity Commissioner for the property in question, inspite of preferential treatment offered in his favour, as evident from the public advertisement which is on record. This petitioner therefore can not be granted any relief in his favour. Special Civil Application No.7559 of 2011 is therefore required to be dismissed.
Page 4 of 23 Downloaded on : Wed Jan 12 09:32:17 IST 2022C/LPA/1416/2014 JUDGMENT DT. 15/02/2021 MANUBHAI BHANUBHAI GAJERA AND OTHERS V. GUJARAT REVENUE REVENUE TRIBUNAL AND OTHERS 8.2 Special Civil Application No.3710 of 2011 is filed by the persons, who claim to have agreement to sale in their favour, of some part of the land in question, executed by few of the tenants of the said land, including the above referred petitioner i.e. of Special Civil Application No.7559 of 2011. The prospective buyer through tenant can not have better claim than the tenant himself. Since Special Civil Application No.7559 of 2011 itself is being dismissed, Special Civil Application No.3710 of 2011 by the prospective buyer through the said tenant can not be allowed. Further, only one of the tenants is aggrieved by the impugned orders. The prospective buyer through tenants claim that he has agreement to sale in his favour executed by more than one tenants. When those tenants themselves are not aggrieved by the impugned orders, the prospective buyer through the said tenants can not be heard challenging the impugned orders. Special Civil Application No.3710 of 2011 also, therefore needs to be dismissed.
8.3 So far the argument that, the sale in question is not in the interest of the the Trust in question, is concerned, even if the locus of the petitioners is not questioned, even on merits, the said contention is not well founded, since the sale in question is undertaken by inviting bids after public advertisement and the successful bidder had quoted more than 2.5 times the amount than the upset price. In these facts, this Court does not see any infirmity in the procedure adopted by the Charity Commissioner and there is no material put forward by the petitioners that the act Page 5 of 23 Downloaded on : Wed Jan 12 09:32:17 IST 2022 C/LPA/1416/2014 JUDGMENT DT. 15/02/2021 MANUBHAI BHANUBHAI GAJERA AND OTHERS V. GUJARAT REVENUE REVENUE TRIBUNAL AND OTHERS of the Charity Commissioner was not in the interest of the Trust in question in any manner. This contention therefore is rejected.
8.4 This Court has gone through the judgment passed by the Civil Judge, Senior Division, Surat in Regular Civil Suit No.881 of 1947, dated 31.03.1948, which is also referred to by the Charity Commissioner. (In the impugned order, the number is erroneously typed, but there is no dispute on the point that it is this very judgment which is referred to and relied upon by the Charity Commissioner while passing the impugned order.) The property in question is the land owned by 'Bai Pirozbai Manekji Patel Singnaporwala English School for Girls' - a Public Charitable Trust. The properties of the said Trust is vested in the 'Surat Parsi Panchayat' and the affairs of the said Trust are also managed on all counts, by the 'Surat Parsi Panchayat'. There is no ambiguity with regard to the relationship between 'the Trust in question' and 'the Parsi Panchayat' and the authority of 'the Parsi Panchayat' over 'the Trust in question'. Further, all parties are before this Court and there is no dispute inter-se. Except the tenant and the prospective buyer through tenant, whose challenge is examined as noted above, there is no other party aggrieved by the transaction in question. The execution of the transaction permitted by the Charity Commissioner now need not be delayed.
8.5 So far the decisions cited by learned advocate for the petitioners are concerned, there can not be any dispute with regard to the proposition of law annunciated in those judgments, Page 6 of 23 Downloaded on : Wed Jan 12 09:32:17 IST 2022 C/LPA/1416/2014 JUDGMENT DT. 15/02/2021 MANUBHAI BHANUBHAI GAJERA AND OTHERS V. GUJARAT REVENUE REVENUE TRIBUNAL AND OTHERS however in the facts recorded above, it will not take the case of any of the petitioners any further.
8.6 Considering the totality, both these petitions need to be dismissed.
9. For the reasons recorded above, both these petitions are dismissed. Rule discharged. Interim relief is vacated. No order as to costs.
10. At this stage, learned advocate for the the petitioners have requested that, interim relief which has operated till date, be continued for some time. Considering the totality, it is ordered that, the said interim relief shall stand extended for a period of four weeks from today. "
5. Mr. Dhaval Dave, learned Senior Counsel, sought to urge before us in the present intra-Court appeal that the Appellants-Petitioners have their interest in the land in question on the basis of the said Agreement to Sell dated 13.09.2000 and therefore, the Sale Deed executed by the Trust in favour of Respondent No.4, Mr. R.D. Chaudhary in open public auction, remains subject to the rights of the Appellants-Petitioners under the said Agreement to Sell and therefore, they had a locus standi to challenge the said sale and keeping the lis alive by approaching this Court against the order of the learned Charity Commissioner permitting the said sale. He submitted that both the learned Charity Commissioner as well as the learned Gujarat Revenue Tribunal have erred in granting that permission Page 7 of 23 Downloaded on : Wed Jan 12 09:32:17 IST 2022 C/LPA/1416/2014 JUDGMENT DT. 15/02/2021 MANUBHAI BHANUBHAI GAJERA AND OTHERS V. GUJARAT REVENUE REVENUE TRIBUNAL AND OTHERS and allowing the sale of the Trust property in question. He also submitted that First Appeal No.4386 of 2019 filed against the rejection of Civil Suit No.300 of 2007, which was dismissed under Order 7 Rule 11 of Civil Procedure Code, is pending before this Court and his clients are even ready to pay a higher price than the one paid by the purchaser - Respondent No.4, R.D. Chaudhary, for the said property.
6. On the other hand, learned Senior Counsel Mr. R.R. Marshall appearing with learned advocate Mr. S.K. Patel for Respondent No.4, Mr. R.D. Chaudhary and Mr. Asim Pandya, learned Senior Counsel with Mr. Manan Bhatt for the Respondent - Trust supported the impugned orders and have urged that the sale in question was in the interest of the Trust and the Appellants-Petitioners have no locus standi to challenge the same, being third parties.
7. Having heard the learned counsels for the parties, we strongly feel that the present litigation by the Agreement Holders in the Constitutional Courts is absolutely frivolous and amounts to the abuse of the legal process. The only forum where whatever right or interest in property an Agreement Holder under the Agreement to Sell can claim is the competent Civil Court in a properly instituted Civil Suit for Specific Performance, which, undoubtedly, is a discretionary relief, which may or may not be granted by the competent Civil Court under the Specific Relief Act. No right whatsoever, otherwise flows from such Agreement to Sell executed in their favour, much less accrues to them to upset a concluded sale transaction executed by a competent person or body corporate in favour of a third party.Page 8 of 23 Downloaded on : Wed Jan 12 09:32:17 IST 2022
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8. Having failed in the competent Civil Court, these Appellants- Petitioners chose a surreptitious alternative way to keep the flame of fire burning for them and to keep the challenge alive in some manner or the other by abusing the process of this Court at two levels. Having lost before the learned Single Judge on all fours, where even one of the Tenants, their vendors under the said Agreement to Sell surprisingly through a Power of Attorney supported them, but miserably failed, we are at loss to understand as to how under a so-called Agreement to Sell executed by the Tenants of the property in question, who had no semblance of ownership rights over the property in question, could even invoke the extra-ordinary jurisdiction of this Court to challenge the concluded sale made under the Bombay Public Trusts Act under the due permission granted by the competent authority, i.e. the Charity Commissioner. A bulk of the litigation, which flows through such Agreement holders, who have an Agreement to Sell to protect their interests / rights only to an inchoate extent, cannot be permitted to invoke the writ jurisdiction of the Courts in this manner. Another abuse of process of law is the use of Power of Attorney Holders, who, usually have hidden and undisclosed interest in the property.
9. It is clear as a day light that two Civil Suits filed by the Appellants- Petitioners before us, itself was a failing effort on their part, as they failed to convince even the Trial Court about their rights flowing from the said Agreement to Sell. They lost in the first suit, tried again and failed under Order 7 Rule 11 of Civil Procedure Code probably on the bar of res judicata. They still keep the lis alive by filing First Appeal.Page 9 of 23 Downloaded on : Wed Jan 12 09:32:17 IST 2022
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10. Thus, without there being any right whatsoever once their suits failed, thereafter, they adopted the course of Writ Jurisdiction to attack at the very foundation of the permission given by the learned Charity Commissioner to sell the Trust property in open public auction. Again, having failed there, they filed an appeal before the Gujarat Revenue Tribunal and having failed there also, they tried to keep the lis alive in this Court for all these years, only to cast a shadow over the confirmed rights flowing to the Purchasers under the Registered Sale Deed of the property purchased bona fide in an open public auction, who, the record shows, had paid more than double the Reserve Price to the Trust in the said open Public Auction. These litigants might have even succeeded in keeping the further development of the property on the tenter-hooks under a cloud of litigation, which was, frivolous to say the least, besides, being mischievous right from 2005 till 2021, i.e. sixteen years.
11. Neither of the contentions raised by learned Senior Counsel Mr. Dhaval Dave that against the rejection of plaint under Order 7 Rule 11 of the Civil Procedure Code, the First Appeal is pending here or that the Appellants-Petitioners can pay even more price for the said Trust property, has any substance and bearing on the issue involved before us against the order of the learned Single Judge and the orders passed by the learned Charity Commissioner and the learned Gujarat Revenue Tribunal and therefore, these submissions are noted, just to be rejected and they are, accordingly, rejected.
12. Unless the Courts, specially the Constitutional Courts, are vigilant Page 10 of 23 Downloaded on : Wed Jan 12 09:32:17 IST 2022 C/LPA/1416/2014 JUDGMENT DT. 15/02/2021 MANUBHAI BHANUBHAI GAJERA AND OTHERS V. GUJARAT REVENUE REVENUE TRIBUNAL AND OTHERS enough not to allow an entry in their portals to such litigants, viz. Agreement Holders, Power of Attorney Holders, etc. at the entry door itself, it takes years in the over-burdened Courts, before the mala fide intention with which they knock the doors of the Court under Article 226 is really revealed and they are pushed out. The only way, after so many years, is to impose exemplary costs on such litigants to dissuade them and others like them, from launching a spree of litigation other than at the right forum only where these Appellants-Petitioners have already lost the legal battle.
13. The Hon'ble Supreme Court in Suraj Lamp & Industries Pvt. Ltd. V. State of Haryana, (2012) 1 SCC 656, expressed similar scorn for such indirect transfers of property viz. by Agreement for Sale, Power of Attorney and Living Will, etc. as they do not convey any title or amount to transfer or create any interest in the immovable property except to the limited extent of Section 53A of the Transfer of Property Act against the Transferor or the Vendor in such Agreement to Sell and they only result in mass evasion of stamp duty, income tax and circulation of black money. The preamble of the said judgment of the Apex Court giving reference to its own earlier order dated 15.05.2009 reported in 2009 (7) SCC 363, is the background of misuse of these flimsy transactions except the genuine transactions in the following manner:-
"1. By an earlier order dated 15.5.2009 [reported in Suraj Lamp & Industries Pvt. Ltd. vs. State of Haryana & Anr. - 2009 (7) SCC 363], we had referred to the ill - effects of what is known as Page 11 of 23 Downloaded on : Wed Jan 12 09:32:17 IST 2022 C/LPA/1416/2014 JUDGMENT DT. 15/02/2021 MANUBHAI BHANUBHAI GAJERA AND OTHERS V. GUJARAT REVENUE REVENUE TRIBUNAL AND OTHERS General Power of Attorney Sales (for short `GPA Sales') or Sale Agreement / General Power of Attorney / Will transfers (for short `SA/GPA/WILL' transfers). Both the descriptions are misnomers as there cannot be a sale by execution of a power of attorney nor can there be a transfer by execution of an agreement of sale and a power of attorney and Will. As noticed in the earlier order, these kinds of transactions were evolved to avoid prohibitions/conditions regarding certain transfers, to avoid payment of stamp duty and registration charges on deeds of conveyance, to avoid payment of capital gains on transfers, to invest unaccounted money (`black money') and to avoid payment of `unearned increases' due to Development Authorities on transfer.
2. The modus operandi in such SA/GPA/WILL transactions is for the vendor or person claiming to be the owner to receive the agreed consideration, deliver possession of the property to the purchaser and execute the following documents or variations thereof:
(a) An Agreement of sale by the vendor in favour of the purchaser confirming the terms of sale, delivery of possession and payment of full consideration and undertaking to execute any document as and when required in future.
Or An agreement of sale agreeing to sell the property, with a separate affidavit confirming receipt of full price and Page 12 of 23 Downloaded on : Wed Jan 12 09:32:17 IST 2022 C/LPA/1416/2014 JUDGMENT DT. 15/02/2021 MANUBHAI BHANUBHAI GAJERA AND OTHERS V. GUJARAT REVENUE REVENUE TRIBUNAL AND OTHERS delivery of possession and undertaking to execute sale deed whenever required.
(b) An Irrevocable General Power of Attorney by the vendor in favour of the purchaser or his nominee authorizing him to manage, deal with and dispose of the property without reference to the vendor.
Or A General Power of Attorney by the vendor in favour of the purchaser or his nominee authorizing the attorney holder to sell or transfer the property and a Special Power of Attorney to manage the property.
(c) A Will bequeathing the property to the purchaser (as a safeguard against the consequences of death of the vendor before transfer is effected).
These 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 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.
Ill - effects of SA/GPA/WILL transactions:
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3. The earlier order dated 15.5.2009, noted the ill-effects of such SA/GPA/WILL transactions (that is generation of black money, growth of land mafia and criminalization of civil disputes) as under:
"Recourse to `SA/GPA/WILL' transactions is taken in regard to freehold properties,even when there is no bar or prohibition regarding transfer or conveyance of such property, by the following categories of persons:
(a) Vendors with imperfect title who cannot or do not want to execute registered deeds of conveyance.
(b) Purchasers who want to invest undisclosed wealth/income in immovable properties without any public record of the transactions. The process enables them to hold any number of properties without disclosing them as assets held.
(c) Purchasers who want to avoid the payment of stamp duty and registration charges either deliberately or on wrong advice. Persons who deal in real estate resort to these methods to avoid multiple stamp duties/registration fees so as to increase their profit.
Whatever be the intention, the consequences are disturbing and far reaching, adversely affecting the economy, civil society and Page 14 of 23 Downloaded on : Wed Jan 12 09:32:17 IST 2022 C/LPA/1416/2014 JUDGMENT DT. 15/02/2021 MANUBHAI BHANUBHAI GAJERA AND OTHERS V. GUJARAT REVENUE REVENUE TRIBUNAL AND OTHERS law and order. Firstly, it enables large scale evasion of income tax, wealth tax, stamp duty and registration fees thereby denying the benefit of such revenue to the government and the public. Secondly, such transactions enable persons with undisclosed wealth/income to invest their black money and also earn profit/income, thereby encouraging circulation of black money and corruption. This kind of transactions have disastrous collateral effects also. For example, when the market value increases, many vendors (who effected power of attorney sales without registration) are tempted to resell the property taking advantage of the fact that there is no registered instrument or record in any public office thereby cheating the purchaser. When the purchaser under such `power of attorney sales' comes to know about the vendors action, he invariably tries to take the help of musclemen to `sort out' the issue and protect his rights. On the other hand, real estate mafia many a time purchase properties which are already subject to power of attorney sale and then threaten the previous `Power of Attorney Sale' purchasers from asserting their rights. Either way, such power of attorney sales indirectly lead to growth of real estate mafia and criminalization of real estate transactions."
It also makes title, verification and certification of title, which is an integral part of orderly conduct of transactions relating to immovable property, difficult, if not impossible, giving nightmares to bonafide purchasers wanting to own a property with an assurance of good and marketable title.
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4. This Court had, therefore, requested the learned Solicitor General to give suggestions on behalf of Union of India. This Court also directed notice to States of Delhi, Haryana, Punjab, Uttar Pradesh to give their views on the matter. The four states have responded and confirmed that SA/GPA/WILL transfers required to be discouraged as they lead to loss of revenue (stamp duty) and increase in litigations due to defective title. They also referred to some measures taken in that behalf. The measures differ from State to State.
In general, the measures are:
(i) to amend Registration Act, 1908 by Amendment Act 48 of 2001 with effect from 24.9.2001 requiring documents containing contract to transfer for consideration (agreements of sale etc.) relating to any immoveable property for the purpose of section 53A of the Act, shall be registered; and
(ii) to amend the stamp laws subjecting agreements of sale with delivery of possession and/or irrevocable powers of attorney in favour of non-family members authorizing sale, to the same stamp duty as deed of conveyance. These measures, no doubt, to some extent plugged the loss of revenue by way of stamp duty on account of parties having recourse to SA/GPA/WILL transactions, instead of executing deeds of conveyance. But the other ill-effects continued. Further such transaction which was only prevalent in Delhi and the surrounding areas have started spreading to other States also. Those with ulterior motives either to indulge in black Page 16 of 23 Downloaded on : Wed Jan 12 09:32:17 IST 2022 C/LPA/1416/2014 JUDGMENT DT. 15/02/2021 MANUBHAI BHANUBHAI GAJERA AND OTHERS V. GUJARAT REVENUE REVENUE TRIBUNAL AND OTHERS money transactions or land mafia continue to favour such transactions. There are also efforts to thwart the amended provisions by not referring to delivery of possession in the agreement of sale and giving a separate possession receipt or an affidavit confirming delivery of possession and thereby avoiding the registration and stamp duty. The amendments to stamp and registration laws do not address the larger issue of generation of black money and operation of land mafia. The four States and the Union of India are however unanimous that SA/GPA/WILL transactions should be curbed and expressed their willingness to take remedial steps."
13.1 The Hon'ble Supreme Court then proceeded to give detailed reasoning for laying down the law in this regard in the following epoch- making words :-
"16. Section 54 of TP Act makes it clear that a contract of sale, that is, an agreement of sale does not, of itself, create any interest in or charge on such property. This Court in Narandas Karsondas v. S.A.Kamtam and Anr., (1977) 3 SCC 247, observed:
A contract of sale does not of itself create any interest in,or charge on, the property. This is expressly declared in Section 54 of the Transfer of Property Act. (See Rambaran Prosad v. Ram Mohit Hazra [1967]1 SCR 293). The fiduciary character of the personal obligation created by a contract for sale is recognised in Section 3 of the Specific Page 17 of 23 Downloaded on : Wed Jan 12 09:32:17 IST 2022 C/LPA/1416/2014 JUDGMENT DT. 15/02/2021 MANUBHAI BHANUBHAI GAJERA AND OTHERS V. GUJARAT REVENUE REVENUE TRIBUNAL AND OTHERS Relief Act, 1963, and in Section 91 of the Trusts Act. The personal obligation created by a contract of sale is described in Section 40 of the Transfer of Property Act as an obligation arising out of contract and annexed to the ownership of property, but not amounting to an interest or easement therein." In India, the word `transfer' is defined with reference to the word `convey'. The word `conveys' in section 5 of Transfer of Property Act is used in the wider sense of conveying ownership... ...that only on execution of conveyance ownership passes from one party to another....".
17. In Rambhau Namdeo Gajre v. Narayan Bapuji Dhotra [2004 (8) SCC 614] this Court held:
"Protection provided under Section 53A of the Act to the proposed transferee is a shield only against the transferor. It disentitles the transferor from disturbing the possession of the proposed transferee who is put in possession in pursuance to such an agreement. It has nothing to do with the ownership of the proposed transferor who remains full owner of the property till it is legally conveyed by executing a registered sale deed in favour of the transferee. Such a right to protect possession against the proposed vendor cannot be pressed in service against a third party." [This clinches the issue involved before us].
18. It is thus clear that a transfer of immoveable property by Page 18 of 23 Downloaded on : Wed Jan 12 09:32:17 IST 2022 C/LPA/1416/2014 JUDGMENT DT. 15/02/2021 MANUBHAI BHANUBHAI GAJERA AND OTHERS V. GUJARAT REVENUE REVENUE TRIBUNAL AND OTHERS way of sale can only be by a deed of conveyance (sale deed). In the absence of a deed of conveyance (duly stamped and registered as required by law), no right, title or interest in an immoveable property can be transferred. It is thus clear that a transfer of immoveable property by way of sale can only be by a deed of conveyance (sale deed). In the absence of a deed of conveyance (duly stamped and registered as required by law), no right, title or interest in an immoveable property can be transferred.
19. Any contract of sale (agreement to sell) which is not a registered deed of conveyance (deed of sale) would fall short of the requirements of sections 54 and 55 of TP Act and will not confer any title nor transfer any interest in an immovable property (except to the limited right granted under section 53A of TP Act). According to TP Act, an agreement of sale, whether with possession or without possession, is not a conveyance. Section 54 of TP Act enacts that sale of immoveable property can be made only by a registered instrument and an agreement of sale does not create any interest or charge on its subject matter.
Scope of Power of Attorney
20. 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 Page 19 of 23 Downloaded on : Wed Jan 12 09:32:17 IST 2022 C/LPA/1416/2014 JUDGMENT DT. 15/02/2021 MANUBHAI BHANUBHAI GAJERA AND OTHERS V. GUJARAT REVENUE REVENUE TRIBUNAL AND OTHERS Powers of Attorney Act, 1882). It is revocable or terminable at any time unless it is made irrevocable in a manner known to law. Even an irrevocable attorney does not have the effect of transferring title to the grantee.
21. In State of Rajasthan vs. Basant Nahata - 2005 (12) SCC 77, this Court held :
"A grant of power of attorney is essentially governed by Chapter X of the Contract Act. By reason of a deed of power of attorney, an agent is formally appointed to act for the principal in one transaction or a series of transactions or to manage the affairs of the principal generally conferring necessary authority upon another person. A deed of power of attorney is executed by the principal in favour of the agent. The agent derives a right to use his name and all acts, deeds and things done by him and subject to the limitations contained in the said deed, the same shall be read as if done by the donor. A power of attorney is, as is well known, a document of convenience.
Execution of a power of attorney in terms of the provisions of the Contract Act as also the Powers-of-Attorney Act is valid. A power of attorney, we have noticed hereinbefore, is executed by the donor so as to enable the donee to act on his behalf. Except in cases where power of attorney is coupled with interest, it is revocable. The donee in exercise of his Page 20 of 23 Downloaded on : Wed Jan 12 09:32:17 IST 2022 C/LPA/1416/2014 JUDGMENT DT. 15/02/2021 MANUBHAI BHANUBHAI GAJERA AND OTHERS V. GUJARAT REVENUE REVENUE TRIBUNAL AND OTHERS power under such power of attorney only acts in place of the donor subject of course to the powers granted to him by reason thereof. He cannot use the power of attorney for his own benefit. He acts in a fiduciary capacity. Any act of infidelity or breach of trust is a matter between the donor and the donee."
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.
Scope of Will
22. A Will is the testament of the testator. It is a posthumous disposition of the estate of the testator directing distribution of his estate upon his death. It is not a transfer inter vivos. The two essential characteristics of a Will are that it is intended to come into effect only after the death of the testator and is revocable at any time during the life time of the testator. It is said that so long as the testator is alive, a Will is not be worth the paper on which it is written, as the testator can at any time revoke it. If the testator, who is not married, marries after making the Will, by operation of law, the Will stands revoked. (see sections 69 and 70 of Indian Succession Act, 1925). Registration of a Will does not make it any more effective.
Conclusion
23. Therefore, a SA/GPA/WILL transaction does not convey any Page 21 of 23 Downloaded on : Wed Jan 12 09:32:17 IST 2022 C/LPA/1416/2014 JUDGMENT DT. 15/02/2021 MANUBHAI BHANUBHAI GAJERA AND OTHERS V. GUJARAT REVENUE REVENUE TRIBUNAL AND OTHERS title nor create any interest in an immovable property. 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.
24. We therefore reiterate that immovable property can be legally and lawfully transferred/conveyed only by a registered deed of conveyance. Transactions of the nature of `GPA sales' or `SA/GPA/WILL transfers' do not convey title and do not amount to transfer, nor can they be recognized or valid mode of transfer of immoveable property. The courts will not treat such transactions as completed or concluded transfers or as conveyances as they neither convey title nor create any interest in an immovable property. They cannot be recognized as deeds of title, except to the limited extent of section 53A of the TP Act. Such transactions cannot be relied upon or made the basis for mutations in Municipal or Revenue Records. What is stated above will apply not only to deeds of conveyance in regard to freehold property but also to transfer of leasehold property. A Page 22 of 23 Downloaded on : Wed Jan 12 09:32:17 IST 2022 C/LPA/1416/2014 JUDGMENT DT. 15/02/2021 MANUBHAI BHANUBHAI GAJERA AND OTHERS V. GUJARAT REVENUE REVENUE TRIBUNAL AND OTHERS lease can be validly transferred only under a registered Assignment of Lease. It is time that an end is put to the pernicious practice of SA/GPA/WILL transactions known as GPA sales.
14. Therefore, we feel upset by these kinds of protracted litigation as one lands on our Board, where a bona fide public sale of Trust Property, having been concluded in the interest of the Trust at the relevant point of time in 2005 duly permitted by the competent authority, is kept on the frying pan of litigation by such cantankerous litigants. Therefore, we dismiss this Letters Patent Appeal and the writ petition with exemplary costs of Rs.5,00,000/- (Rupees Five Lacs) to be paid by the Appellants- Petitioners to the extent of Rs.2.50 Lacs to the purchaser - Respondent No.4, Mr. R.D. Chaudhary and another half to the extent of Rs.2.50 Lacs in the Cost Fund of Gujarat High Court Legal Services Authority for providing free Legal Aid to the poor sections of the society, both to be paid within Two Months from today.
( DR. VINEET KOTHARI, J ) ( GITA GOPI,J ) PRAVIN KARUNAN Page 23 of 23 Downloaded on : Wed Jan 12 09:32:17 IST 2022