Court Rules General Power of Attorney Does Not Transfer Ownership, Confirms Binding Nature of Admissions in Registered Sale Deed; Appellant’s Loan Defence Rejected
In a significant judgment delivered on August 31, 2026, the Delhi High Court, presided over by Justice Neena Bansal Krishna, dismissed the appeal filed by Bhisham Mehta challenging a decree for recovery of over Rs. 1 crore as balance sale consideration relating to a property sale executed under a General Power of Attorney (GPA). The suit was originally decreed by the Additional District Judge, New Delhi, in favor of the plaintiffs—daughters and legal heirs of the late Smt. Kusum Mehta-who sought recovery of the unpaid portion of the sale proceeds of a 26-bigha agricultural land in Village Paprawat, Najafgarh, Delhi.
The Court meticulously analyzed the nature and scope of a General Power of Attorney, clarifying that such an instrument is a document of agency and not a transfer of right, title, or interest in immovable property. The appellant had acted as the registered General Attorney for Smt. Kusum Mehta and her co-owners, executing a sale deed dated April 11, 2011, selling the entire property to M/s Agile Properties Limited for Rs. 6.95 crore. The sale deed clearly stated that all four co-owners, including Smt. Kusum Mehta, were vendors of the property and that the appellant executed the sale on their behalf.
Despite receiving the full sale consideration, Bhisham Mehta had transferred only Rs. 71.99 lakh to Smt. Kusum Mehta’s bank account, retaining the balance amount of Rs. 1.01 crore. The plaintiffs filed suit seeking the recovery of this balance with interest. The appellant contended that the GPA conferred irrevocable ownership rights and denied liability to pay the balance, further arguing that the amount credited to Smt. Kusum Mehta was an interest-free friendly loan, not part of the sale consideration.
Rejecting these contentions, the Court held that:
- - The recitals in the registered sale deed constitute clear, unambiguous, and unequivocal admissions binding on the appellant under Order XII Rule 6 of the Code of Civil Procedure, 1908.
- - A GPA, even if irrevocable and conferring powers such as gifting, does not amount to a transfer of ownership or interest in immovable property.
- - The appellant’s attempt to dispute the ownership by claiming the property was acquired from his own funds was unsupported by any documentary evidence and contradicted by his income tax returns.
- - The plea that the credited amount was a loan was demolished by the appellant’s own reply to police authorities admitting identical sums were deposited in the accounts of all co-owners as a result of the sale transaction, and the deceased’s tax returns showing the credited sum as capital gains income.
- - The suit was not barred by limitation as the cause of action arose when the plaintiffs became aware of the sale and the retention of the balance amount in 2012, and the suit was filed within three years thereafter.
- - The pendency of a counter-claim filed by the appellant did not bar the passing of the decree on admissions in the original suit since the claims arose from distinct causes of action.
The Court dismissed the appeal, affirming the decree for Rs. 1,01,78,074 with interest at 8% per annum from April 11, 2011, until realization. The ruling reinforces the legal principle that a General Power of Attorney is an agency instrument and cannot substitute for a registered transfer of ownership, and it underscores the binding effect of admissions in registered documents under the law.
Bottom Line:
A General Power of Attorney is not an instrument of transfer of right, title, or interest in immovable property. Admissions in registered instruments are binding, and a decree on admissions can be passed under Order XII Rule 6 of the Code of Civil Procedure, 1908, when such admissions are clear, unambiguous, and unequivocal.
Statutory provision(s):
Code of Civil Procedure, 1908 - Order XII Rule 6, Order VIII Rule 6-A(2), Indian Evidence Act, 1872 - Sections 91 and 92, Indian Contract Act, 1872 - Section 218, Limitation Act, 1963
Bhisham Mehta v. Gita Vig, (Delhi) : Law Finder Doc Id # 2970428
