Supreme Court Questions Flaw in Registered Sale Deeds Executed via Power of Attorney, Refers Matter to Larger Bench [Read Judgement]

The Supreme Court of India has referred a legal issue involving the registration of sale deeds executed through a power of attorney (PoA) to a larger bench. The issue revolves around whether a PoA holder who executes a sale deed is legally regarded as the executant for the purposes of registration under Section 32(a) of the Registration Act, 1908.

The case arose from a dispute over the validity of three registered sale deeds executed in the early 1990s by a tenant, G. Rajender Kumar, who claimed to act as PoA holder for the original property owners, Ranveer Singh and his wife, Gyanu Bai. The couple, however, later denied executing any such power of attorney in his favor.

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The Trial Court and the High Court examined whether the sale deeds executed by Rajender Kumar in favor of his wife, G. Shashikala, were legally valid. The case made its way to the Supreme Court due to differences in interpretations of Sections 32 and 33 of the Registration Act and the precedent set by an earlier Supreme Court decision in Rajni Tandon v. Dulal Ranjan Ghosh Dastidar.

In the precedent cited, the Court had held that if a PoA holder is authorized to execute a sale deed and also presents it for registration, they become the "executant" of the document, thereby falling under Section 32(a) and not Section 32(c) of the Act. That interpretation essentially allows the registration of sale deeds even when the underlying power of attorney is not authenticated as per Section 33, if the same person executes and presents the deed.

The bench, comprising Justices Sanjay Kumar and K.V. Viswanathan, disagreed with this approach. They noted that a PoA holder, when executing a sale deed on behalf of the principal, does so not in his or her own name but expressly in the name of the principal.

“By merely signing a document on behalf of the principal, a power-of-attorney holder does not lose his status as an agent and become the ‘executant’ in his own right,” the Court observed.

The bench said that under the Registration Act, a person who presents a document as an agent must meet specific authentication requirements under Sections 32(c), 33, 34, and 35 of the Act. Rule 53 of the Andhra Pradesh Registration Rules was also cited, which mandates that even a registered PoA must be properly authenticated for purposes of registration.

The judges also pointed out that the mechanical act of presentation of a document, as held in the case of Rajni Tandon, would be subjected to rigorous scrutiny, while the act of executing a document transferring title in immovable property could go through without much scrutiny, even if based on a mere notarized PoA.

The Court decided that using contradictory precedents to decide the case would be inappropriate. As a result, the case has been forwarded to a larger bench for decision-making authority.

The Registry has been instructed to ask the Chief Justice for the necessary guidance in order to put the case before a larger bench as soon as possible.

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