Can your power of attorney sell your land? Know the legal boundaries

I have a small patch of land in a village. I’ve given power of attorney of the land to a childhood friend residing in that village as I’m rarely there. I wanted to know if he can sell off the land in my absence. What are some measures that can be implemented or legal aspects that need to be kept in mind pertaining to power of attorney with respect to property matters?

– Name withheld on request

As a fundamental principle of law, no one can transfer a better title than they themselves possess. In this case, your friend, acting under a power of attorney, is merely an agent and not the actual owner. 

This means that if the property is sold, the transaction would legally be considered as a sale by you (the owner), through your agent, to the buyer—not a sale by your friend directly. As the rightful owner, you would be entitled to all benefits and consideration arising from the sale.

Additionally, it is crucial to consider the rulings of the Supreme Court, which has consistently emphasised the legal requirements for the sale and transfer of immovable property, including mandatory registration as prescribed by law.

Supreme Court rulings

The Supreme Court in Shakeel Ahmed v. Syed Akhlaq Hussain, Civil Appeal No. 1598 of 2023, clarified that the title to immovable property cannot be transferred through unregistered documents, including agreements to sell or powers of attorney. 

This ruling was based on Sections 17 and 49 of the Registration Act, 1908, and Section 54 of the Transfer of Property Act, 1882. The Court categorically stated that without proper registration, no right, title, or interest in immovable property can be conferred.

In the case of Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana & Anr. (Special Leave Petition (C) No. 13917 of 2009), the Supreme Court specified the scope of power of attorney and laid down that “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 authorises 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.” 

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The court also clarified in this case that – “Even an irrevocable attorney does not have the effect of transferring title to the grantee.”

In this case, since the property had never been registered in favour of your friend who you’ve given the POA, he is not entitled to sell it and to enjoy the benefits thereof.

From the buyer’s perspective, certain precautionary measures can help safeguard their interests, such as revoking the power of attorney, imposing specific restrictions within it regarding the transfer, sale, or any other transactions related to the property.

For the seller, due diligence is essential to ensure a legally sound transaction. This includes thoroughly reviewing past sale deeds, examining the chain of title documents, and obtaining mutation records to verify the legitimacy of ownership and ensure the transaction’s legal validity.

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Aditya Chopra, managing partner and Amay Jain, senior associate, The Victoriam Legalis (TVL)