Buying Property on a GPA in Bangalore: Why It Does Not Give Title

Some sellers in and around Bangalore still offer a plot or a house on a general power of attorney (GPA) instead of a registered sale deed. The deal is usually pitched as a way to save stamp duty, often with a lower price attached. This guide explains why a GPA does not make the buyer the owner, what the Supreme Court has ruled and how to handle a property that has a GPA somewhere in its history.

What a Power of Attorney Does

Under a power of attorney, one person, the principal, authorises another, the agent, to act on his or her behalf. A general power of attorney covers a broad range of acts, which may include signing documents for a property. The principal remains the owner throughout, and the agent acts only in the principal's name.

That is the point many buyers miss. A GPA hands over the authority to act; ownership stays exactly where it was. It can let the agent sign a sale deed for the owner, but the GPA itself conveys nothing to the agent or to anyone else.

How the GPA Sale Arose

For decades, property in many Indian cities changed hands through a bundle of documents instead of a registered deed. The usual set was an agreement to sell, a GPA in the buyer's favour, an affidavit, a receipt for the money and often a will naming the buyer. The parties treated this bundle as a sale while avoiding the stamp duty and registration fee a conveyance would attract.

The practice was common for sites in unapproved layouts and for revenue land on the edges of cities. It also suited sellers whose title had gaps that a proper sale deed would expose.

What the Supreme Court Ruled

The leading case is Suraj Lamp and Industries v. State of Haryana, decided in October 2011. It ruled that land and buildings change owners only through a registered conveyance deed. Sales put together from an agreement to sell, a GPA and a will were held to pass neither title nor any interest, being a device to evade stamp duty and registration.

The court returned to the subject in Ramesh Chand v. Suresh Chand on 1 September 2025. It held that an agreement to sell, a GPA, an affidavit and a receipt cannot pass ownership, and that even a registered will gives no title unless it is proved in law. Taken together, the two rulings leave little room for doubt.

What the rulings leave intact

The 2011 judgment made clear that a genuine power of attorney remains valid for its proper use. An owner may still authorise a spouse, child, relative or manager to carry out a sale on his or her behalf. The agent then signs a registered sale deed in the owner's name, and that deed carries the title.

Why a GPA Purchase Is Risky

Anyone paying for a property on a GPA ends up with a document that can fail in several ways. The main risks are these:

• The buyer never becomes the legal owner, so the seller or the seller's heirs keep their claim.
• A power of attorney can be revoked by the principal, and it ends when the principal dies.
• A will in the buyer's favour can be changed at any time and takes effect only on death, if it is proved.
• Banks generally refuse a loan on a property that comes without a registered sale deed.
• A later buyer runs into the same problem, so the property is hard to sell at a fair price.
• The khata and other records cannot be cleanly moved into the buyer's name.

An unregistered agreement to sell also gives weak protection on possession. Since 2001, Section 53A of the Transfer of Property Act protects a buyer in possession only when the agreement is registered. A buyer in occupation on an unregistered bundle of papers is therefore exposed if the owner sues.

Why Sellers Push GPA Deals

The stated reason is usually the stamp duty and registration saving. In Karnataka, that saving is real, since stamp duty runs up to 5% plus surcharges and the registration fee is 2%. Even so, the saving belongs mostly to the seller's pitch, while the risk belongs entirely to the buyer.

The less obvious reason is that the seller may be unable to give a registered deed. The land may be agricultural and not converted, the layout may lack approval, or the seller may hold only a GPA from someone else. In each case the discount reflects a defect the buyer will inherit.

Warning signs in an offer

Several features of an offer point to a GPA trap. Watch for these:

• A price well below similar properties in the same area, offered only on GPA terms.
• A seller acting as agent for an owner who never comes to a meeting or answers a call.
• Earlier transfers in the chain that also ran on GPAs and agreements instead of sale deeds.
• Pressure to pay an advance before a lawyer has seen the original documents.

Buying From a GPA Holder the Right Way

A power of attorney is legitimate when it is used to sign a registered sale deed for an owner who cannot be present. A common case is an owner living abroad who authorises a relative in Bangalore to complete the sale. The buyer still gets a registered conveyance; the GPA merely lets the relative sign on the owner's behalf.

In such a sale, the buyer's lawyer should run these checks on the power of attorney:

1. Confirm that the person who gave the GPA is the recorded owner, with a clean title chain.
2. Read the GPA to see that it covers selling this property and signing the sale deed.
3. Check that the GPA is registered or properly stamped, including the stamping of one signed abroad.
4. Get proof that the principal is alive and has not revoked the GPA, ideally by speaking to the owner.
5. Pay the price into the owner's own bank account, not the agent's.

Where the seller holds the property only through an old GPA bundle, the remedy is a fresh conveyance, registered and signed by the true owner or by that owner's legal heirs. Some owners agree to execute one for a fee. Until that deed exists, the buyer should treat the property as one the seller does not own.

Before Paying for Any Property

The safe rule for a site or home anywhere in Bangalore is simple: pay only when the owner of record signs and registers the conveyance. Support it with an encumbrance certificate, the khata, tax receipts and a lawyer's title opinion. Buyers who would like our team to look over the papers for a resale property can write to us through the contact page.