Recently, the Supreme Court bench ruled that the Power of Attorney (PoA) holder can sell the property and register the sale by merely producing a copy of the Power of Attorney and that the original document was not mandatory for registration of the sale.
So, those property owners who cancel a Power of Attorney orally and take back the original document without entering into a written agreement on cancellation of the Power of Attorney will have to face a threat since it would still allow the PoA holder to sell the property with the help of an original document.
The facts of the case were that in 1987, Plaintiff i.e., the original owner of the property had entered into an agreement with a person to sell his land. As he was transferred out of the place, he executed a Power of Attorney in favor of the person for concluding the sale. The sale, however, did not take place. So, he revoked the original PoA and orally told the person that it stood terminated. Interestingly, the erstwhile PoA holder got a copy of the registered PoA and went ahead with executing the sale of the property to the same defendant at a much lower price than the one agreed on before. Later, the sale got successfully registered with a copy of the PoA.
The HP High Court bench canceled the registration and restored the property to the original owner on the grounds that non-production of the original PoA document is fatal to the sale.
A SC bench of Justices K M Joseph and P S Narasima hearing the matter set aside the High Court’s Order and declared that the registration was valid since the oral cancellation of PoA has no validity in front of the Law. Moreover, for successful registration of the sale of land, the PoA holder is only required to produce a copy of the original document.
In the judgment, Justice Joseph held, ‘The inquiry contemplated under the Registration Act, cannot extend to question as to whether the person who executed the document in his capacity of the Power of Attorney holder of the principal, was indeed having a valid PoA or not to execute the document or not”.
Justice Joseph further added that although Section 35 of the Registration Act gives authority to the registration authority to satisfy itself that the persons appearing before it are the persons they represent to be, the provision deals with situations under which the registering authority refuses the registration. If the registering authority is satisfied with the person’s identity, the Registrar can choose to not carry the inquiry any further.
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