Can you buy a property through a Power of Attorney? What the law says

Property transactions involving a Power of Attorney (PoA) have long been used in India, particularly when the owner is unable to be physically present to complete a transaction. However, courts have repeatedly clarified that a PoA is not, by itself, a substitute for a registered sale deed. As a result, questions often arise about the legal status of such transactions and the risks they may involve.A Power of Attorney (PoA) is a legal document through which a person authorises another individual to act on their behalf in specified matters. It is commonly used when a person is living abroad, is unable to manage affairs due to illness, age-related health issues or physical incapacity, or cannot be present to complete important transactions. The person granting the authority is known as the principal, while the person authorised to act on their behalf is referred to as the attorney or agent. A PoA can be used for a range of purposes, including property transactions, banking operations, tax filings and other financial or legal matters.Governed under the Contract Act of 1872 and read with the Power of Attorney Act,1882, a Power of Attorney (PoA) is a legal document through which a person, the principal, nominates another person, the agent, to act on his behalf.In India, buying a property through a PoA, especially a General Power of Attorney, exposes you to fraud and criminal liabilities that may turn into prolonged court battles. The Supreme Court does not identify property transactions through a GPA as a valid transfer of property. If you buy a property through a PoA, there are very high chances of fraud, as the property can be easily reclaimed by the owner, and you have no legal proof of your ownership.PoAs can also be used to hide the real ownership of an individual, which may invite illegal or criminal burdens in terms of ownership and use of premises. For sellers, there could also be a case where power of attorney has been revoked, but not properly recorded; the agent could potentially exploit this.The Supreme Court has repeatedly clarified that a Power of Attorney (PoA) is an authority document and not, by itself, a document that transfers ownership of immovable property.In Ghanshyam v. Yogendra Rathi (2023), the court observed that an agreement to sell "is not a document of title or a deed of transfer of property by sale" and therefore "may not confer absolute title" over a property. The court further noted that "an agreement to sell or the power of attorney are not documents of transfer" and that ownership rights in immovable property do not pass merely through their execution.The judgment reiterated that legal title ordinarily passes through a duly executed and registered conveyance deed. Referring to its earlier ruling in Suraj Lamp & Industries v. State of Haryana, the court reaffirmed that a sale agreement, General Power of Attorney and will cannot substitute a registered sale deed for transferring ownership.At the same time, the court drew a distinction between ownership and possession. It noted that a prospective purchaser who has performed their part of the contract and has been lawfully placed in possession may acquire certain possessory rights protected under Section 53A of the Transfer of Property Act. The court observed that such "possessory rights of the prospective purchaser cannot be invaded by the transferer or any person claiming under him".