In a big warning to property owners who intend to sell their assets through a power of attorney (PoA) holder, the Supreme Court has ruled that the PoA holder can sell the property and register the sale by merely producing a copy of the PoA and that the original was not mandatory for registration of the sale.
This means, if the property owner orally cancels the PoA and takes back the original document without entering into a written agreement on cancellation, it would still allow the PoA holder to sell the property with the help of a copy of the original PoA. A bench of Justices K M Joseph and P S Narasima said, “On an analysis of provisions (of the Registration Act), we have no hesitation in rejecting the argument of plaintiff that non-production of original PoA by second defendant was fatal to a valid registration being effected. ” In the case , the property owner (plaintiff) had entered into an agreement with a person for sale of his land for Rs 55,000 in 1987. As he was transferred out of the place, he executed a PoA for concluding the sale. The sale didn’t happen. He took back the original PoA and told the person that it stood terminated. But the PoA holder applied for a copy of the registered PoA and went ahead with the sale for Rs 30,000 to the same defendant, who had earlier agreed to buy it for Rs 55,000. He went to the Registrar’s office and got sale registered with a copy of PoA. The Himachal Pradesh HC cancelled the registration of sale saying non-production of original PoA was fatal to sale. The SC set aside the order saying registration was valid as oral cancellation of PoA wasn’t valid.
