The Supreme Court of India, in M. S. Ananthamurthy & Anr. v. J. Manjula & Ors. (Civil Appeal Nos. 3266–3267 of 2025), examined the legal effect of a General Power of Attorney (GPA) and an unregistered agreement to sell executed in respect of immovable property, and whether such instruments confer any right, title or interest or survive the death of the executant by virtue of Section 202 of the Indian Contract Act, 1872.

The dispute concerned a site originally owned by one Muniyappa, who, in 1986, executed a GPA and an agreement to sell in favour of A. Saraswathi after receiving full consideration and delivering possession. The GPA was described as irrevocable. After the death of the original owner in 1997, the GPA holder executed a registered sale deed in 1998 in favour of her son. Subsequently, the legal heirs of the original owner executed registered sale deeds in favour of third parties, culminating in a registered gift deed in favour of the respondent, who claimed lawful ownership and possession.

The appellants contended that the GPA was coupled with interest and therefore irrevocable under Section 202 of the Contract Act, and that the authority of the GPA holder did not come to an end on the death of the principal. The respondents argued that neither a GPA nor an agreement to sell conveys title, that the agency stood terminated upon the death of the principal under Section 201 of the Contract Act, and that the subsequent registered conveyances in their favour were valid.

The Supreme Court undertook an extensive analysis of the law of agency under the Contract Act, the nature of powers of attorney, and the concept of “agency coupled with interest.” The Court reiterated that a power of attorney creates only a principal–agent relationship and is a document of convenience authorising the agent to act on behalf of the principal. It does not, by itself, transfer any right, title or interest in immovable property.

The Court held that mere execution of a GPA and an agreement to sell, even if contemporaneous and even if full consideration is paid or possession is delivered, does not create an interest in the property in favour of the agent so as to attract Section 202 of the Contract Act. For an agency to be irrevocable under Section 202, the authority must be given for the purpose of effectuating a security or protecting or securing an existing proprietary interest of the agent in the subject-matter of the agency. Mere remuneration, prospective benefit, or expectation of ownership does not constitute such interest.

The Court further held that the use of the expression “irrevocable” in a GPA is not determinative. Unless the power is genuinely coupled with interest, the agency stands terminated by operation of law upon the death of the principal under Section 201 of the Contract Act. Consequently, any sale deed executed by the GPA holder after the death of the principal is void and conveys no title.

Reaffirming the principles laid down in Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana (2012) 1 SCC 656, the Supreme Court held that GPA sales or transfers based on agreement to sell do not convey ownership in immovable property and cannot prevail over valid registered conveyances executed by the lawful owners or their legal heirs.

Accordingly, the Supreme Court dismissed the appeals, upheld the findings of the Trial Court and the High Court, and confirmed the respondent’s lawful ownership and possession of the suit property.

Source- https://api.sci.gov.in/supremecourt/2020/13961/13961_2020_13_1501_59775_Judgement_27-Feb-2025.pdf

 Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.