Only Gpa Sales and Such Transfers Are Banned by Supreme Court and Not Genuine and Legally Valid Gpa - An Article by Sridharababu.n

7/31/2019 Only Gpa Sales and Such Transfers Are Banned by Supreme Court and Not Genuine and Legally Valid Gpa - An Article by Sridharababu.n

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ONLYGPA SALES AND SUCH TRANSFERS ARE BANNED

AND NOT LEGALLY VALID GPA

SRIDHARA BABU. N

ADVOCATE

TUMKUR

http://www.sridharababu.weebly.com

[email protected]

PH:9880339764

SURAJ LAMP INDUSTRIES PVT. LTD. V. STATE OF HARYANA AND ANR. 2012

(1) SCC 656 By Justice R.V. Raveendran and Justice A.K. Patnaik, Justice H.L.

Gokhale.

FACTUAL BACK GROUND OF THE CASE:- By an earlier order dated

15.5.2009 [reported in Suraj Lamp Industries Pvt.Ltd. vs. State of Haryana

and Anr. - 2009 (7) SCC 363] the factual back ground of the case is being

elicited as follows:- In para 2 of the order, court says The petitioner, a company

incorporated under the Companies Act, claims that one Ramnath and his family members

sold two and half acres of land in Wazirabad village, Gurgoan to them by means of an

agreement of sale, General Power of Attorney (for short `GPA') and a will in the year 1991

for a consideration of Rs.716,695/-. It is further alleged that the petitioner verbally

agreed to sell a part of the said property measuring one acre to one Dharamvir

Yadav for Rs.60 lakhs in December 1996. It is stated that the said Dharamvir Yadav, and his

son Mohit Yadav (an ex MLA and Minister), instead of proceeding with the

transaction with the petitioner, directly got in touch with Ramanath and his family

members and in 1997 got a GPA in favour of Dharamvir Yadav in regard

to the entire two and half acres executed and registered and illegally cancelled the earlier

GPA in favour of petitioner. The petitioner claims that when its Director, S.K. Chandak,

confronted Dharamvir Yadav in the year 1999 this behalf, the said Yadav apologized and

issued a cheque for Rs.10 lakhs towards part payment and agreed to pay the balance of

Rs.50 lakhs shortly but that the said cheque was dishonoured necessitating a complaint

under section 138 of the Negotiable Instrument Act, being filed against

Dharamvir Yadav which is pending in a criminal court at Patiala House, New Delhi. It is

further alleged that in the year 2001, petitioner lodged a criminal

complaint against Ramanath and members of his family who executed the sale agreement/

GPA/will in favour of the petitioner and another complaint against Dharambir Yadav and

his son in the District Court, Gurgoan, for offences punishable under sections 406, 420, 467,
http://www.sridharababu.weebly.com/http://www.sridharababu.weebly.com/mailto:[email protected]:[email protected]:[email protected]://www.sridharababu.weebly.com/


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468, 471 and 120B of IPC. The petitioner claims that in December 2005 it lodged an FIR in

respect of offences under Sec. 406,467,468,471 and 120B of IPC against all of them.

In para 4 of the order, court says ..The issue to be addressed isavoidance of execution and registration of deeds of conveyance as the mode of

transfer of freehold immovable property by increasing tendency to adopt

`Power of Attorney Sales', that is execution of sale agreement/ general

power of attorney/will (for short `SA-GPA-Will transactions') instead of

execution and registration of regular deeds of conveyance, on

receiving full consideration. This method adopted has the

following variants:

(i)Execution of an agreement of sale, one or two powers of attorney, with or

without a will, all unregistered.

(ii)Execution of an agreement of sale, power/s of attorney and will, registering

either all ofthem, or any two of them, or any one of them.

In para 5 of the order, court says The `Power of Attorney Sales' as

a method of `transfer' was evolved by lawyers and document writers in

Delhi, to overcome certain restrictions on transfer of flats by the Delhi

Development Authority (for short `DDA'). DDA had undertaken

large scale development by constructing of flats. It is

stated that when DDA allotted a flat to an allottee, any

transfer of the assignment by the allottee required the permission of DDA

and such permission was granted only on payment to DDA of the `unearned

increase', that is the difference between the market value/sale price

and the original cost of allotment. To avoid the cumbersome procedure

in obtaining permission and to avoid payment of the huge part of the price to

the DDA as unearned increase, a hybrid system was evolved whereby the

allottee/holder of the flat, on receiving the agreed consideration

would deliver the possession of the flat to the purchaser and execute the

following documents :

(a) An Agreement of sale confirming the terms of the sale, delivery of

possession and payment of full consideration and undertaking to execute any

document when required in future.


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(b) An Irrevocable General Power of Attorney in favour of the purchaser or

his nominee authorizing him to manage, deal with and dispose of the

property without reference to the vendor.

(c) A will bequeathing the property to the purchaser as safeguard against the

consequences of death of the vendor before transfer.

In para 6 of the order, court says The `Power of Attorney Sales', as noticed

above was adopted to overcome the restrictions/prohibitions in

terms of allotment and the rules of allotment of DDA governing the allotment

of flats. Such transactions were obviously irregular and illegal beingcontrary to the rules and terms of allotment. Further, in the absence of a

registered deed of conveyance, no right, title or interest in an

immovable property could be transferred to the purchaser. However, the

Delhi High Court in a few cases accepted such `Power of Attorney Sales' as

creating an `interest' in the DDA flat which was so `transferred' and

consequently, protected such interest of the purchaser by

issuing injunctions or decrees preventing the vendor from further dealing

with the property. This led to a general impression the `Power of Attorney

Sales' were valid recognized modes of transfer and the very

purpose DDA prohibiting transfers and requiring permission on

payment of certain difference in price was defeated by this process.

In para 14 of the order, court says We therefore request the Solicitor

General to appear in the matter and give suggestions on behalf of Union of

India. We also direct notice to the States of Punjab, Haryana, Delhi, Uttar

Pradesh and Maharashtra (represented by their respective Chief Secretary/

Revenue Secretary) to consider the following issues:

(a)Whether `power of attorney sales' (that is transactions involving

execution of Sale Agreement/GPA/Will) instead of regular sales is

prevalent in their respective states?

(b)What are the views of the respective state government in respect of such

transactions?

(c)What steps have been taken and/or proposed to be taken by the respective

states to deal with the chaotic situation and confusion arising from such

transactions?


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MY PERSONAL OPINION:- It can be seen from the above facts that GPA

Sales in the form of execution of un-registered sale agreement coupled

with registered or un-registered GPA/Will is encouraging Black Money

transactions and creating so many litigations and land mafia. Such

transactions are prevalent in the states which were issued notice by the

supreme court. So the issue before the court is GPA Sales and not as such

execution of legally valid GPA.

Later Judgment pronounced by same bench in Suraj Lamp Industries

Pvt.Ltd. vs. State of Haryana and Anr. Reported in 2012 (1) SCC 656

stated in clear words,

In para 2 of the judgment, court says These transactions are not to be

confused or equated with genuine transactions where the owner of a

property grants a power of Attorney in favour of a family member or

friend to manage or sell his property, as he is not able to manage the

property or execute the sale, personally. These are transactions, where a

purchaser pays the full price, but instead of getting a deed of conveyance gets

a SA/GPA/WILL as a mode of transfer, either at the instance of the vendor or

at his own instance.

In para 19 of the judgment, court says We make it clear that our

observations are not intended to in any way affect the validity of sale

agreements and powers of attorney executed in genuine transactions.

For example, a person may give a power of attorney to his spouse, son,

daughter, brother, sister or a relative to manage his affairs or to execute a

deed of conveyance. A person may enter into a development agreement

with a land developer or builder for developing the land either by forming

plots or by constructing apartment buildings and in that behalf

execute an agreement of sale and grant a Power of Attorney empowering the

developer to execute agreements of sale or conveyances in regard

to individual plots of land or undivided shares in the land relating to

apartments in favour of prospective purchasers. In several States, the


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execution of such development agreements and powers of attorney are

already regulated by law and subjected to specific stamp duty. Our

observations regarding `SA/GPA/WILL transactions' are not intended

to apply to such bonafide/genuine transactions.

In para 2 and 5 of the judgment, court observes:- When parties resort to

`SA/GPA/Will transfers', the adverse effect is not only loss of revenue (stamp

duty and registration charges) but the greater danger of generation of `black'

money. These transactions are not to be confused or equated with genuine

transactions where the owner of a property grants a power of Attorney infavour of a family member or friend to manage or sell his property, as he is

not able to manage the property or execute the sale, personally. These are

transactions, where a purchaser pays the full price, but instead of getting a

deed of conveyance gets a SA/GPA/WILL as a mode of transfer, either at the

instance of the vendor or at his own instance.

In para 5 and 10 of the judgment, court observes:- A high rate of stamp

duty acts as a damper for execution of deeds of conveyance for full value and

encourages SA/GPA/Will transfers. Reducing the stamp duty on conveyance

to realistic levels will encourage public to disclose the maximum sale value

and have the sale deeds registered. Though the reduction of the stamp duty,

may result in an immediate reduction in the revenue by way of stamp duty, in

the long run it will be advantageous for two reasons: (i) parties will be

encouraged to execute registered deeds of conveyance/sale deeds without

any under valuation, instead of entering into SA/GPA/WILL transactions; and

(ii) more and more sale transactions will be done by way of duly registered

sale deeds, disclosing the entire sale consideration thereby reducing the

generation of black money to a large extent. Registration of documents also

makes the process of verification and certification of title easier and simpler.

Further, it reduces disputes and litigations to a large extent.

SCOPE OF AGREEMENT OF SALE:

In para 11 and 12 of the judgment, court observes:- Section 54 of TP Act

makes it clear that a contract of sale, that is, an agreement of sale, does not, of


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only after the death of the testator and is revocable at any time during the life

time of the testator. If the testator, who is not married, marries after making

the will, by operation of law, the will stands revoked. (ss.69 and 70 of

Succession Act, 1925). Registration of a will does not make it any more

effective.

In para 15 of the judgment, court observes:- Therefore, a SA/GPA/WILL

transaction does not convey any title nor create any interest in an immovable

property. The observations by the Delhi High Court, in Asha M. Jain's case*,

while dealing with transactions by way of SA/GPA/WILL, that the "concept ofpower of attorney sales have been recognized as a mode of transaction" are

unwarranted and not justified, unintendedly misleading the general public

into thinking that SA/GPA/Will transactions are some kind of a recognized or

accepted mode of transfer and that it can be a valid substitute for a sale deed.

Such decisions to the extent they recognize or accept SA/GPA/WILL

transactions as concluded transfers, as contrasted from an agreement to

transfer, are not good law.

*Asha M. Jain v. Canara Bank - 94 (2001) DLT 841 - disapproved.

In para 16 of the judgment, court observes:- Immovable property can be

legally and lawfully transferred/conveyed only by a registered deed of

conveyance. Transactions of the nature of `GPA sales' or `SA/GPA/WILL

transfers' do not convey title and do not amount to transfer, nor can they be

recognized as valid mode of transfer of immoveable property. The courts will

not treat such transactions as completed or concluded transfers or as

conveyances, as they neither convey title nor create any interest in an

immovable property. They cannot be recognized as deeds of title, except to

the limited extent of s. 53A of the TP Act. Such transactions cannot be relied

upon or made the basis for mutations in Municipal or Revenue Records. This

will apply not only to deeds of conveyance in regard to freehold property but

also to transfer of leasehold property. A lease can be validly transferred only

under a registered Assignment of Lease. It is time that an end is put to the

pernicious practice of SA/GPA/WILL transactions known as GPA sales.


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In para 18 of the judgment, court observes:- SA/GPA/WILL transactions

can continue to be treated as existing agreement of sale. Parties concerned

may get registered the deeds of conveyance to complete their title. The

`SA/GPA/WILL transactions' may also be used to obtain specific performance

or to defend possession u/s 53A of TP Act. If they are entered before this day,

they may be relied upon to apply for regularization of allotments/leases by

Development Authorities. It is made clear that if the documents relating to

`SA/GPA/WILL transactions' have been accepted and acted upon by DDA or

other developmental authorities or by the Municipal or revenue authorities to

effect mutation, they need not be disturbed, merely on account of thisdecision.

ON THE POINT OF RELEVANCY AND SCOPE OF GPA:-

THE ABOVE CASE RELIES ON THE JUDGEMENT OF SUPREME COURT IN

State of Rajasthan & Ors. VS Basant Nahata Reported in AIR 2005 SC 3401,

2005 (3) Suppl. SCR 1 , 2005(12) SCC 77By Justice Ashok Bhan & Justice

S.B. Sinha

FACTS OF THE CASE:- The Respondent herein is a resident of town of Bikaner. He was a Khatedar

tenant of agricultural lands situated at Chak No. 13 KYD, Square No. 110/24, Killa No. 1 to 25

Bighas, Tehsil Khajuwala, District Bikaner. He appointed one Sukhdeo Singh as his attorney

authorizing him to look after his lands, cultivate the same and to do all other acts, deeds and things

including mortgage or sell the same, get the requisite deeds and documents registered, by a deed of

Power Of Attorney dated 16.7.1999. The said deed was presented before the Sub-Registrar, Bikaner

on 30.7.1999 for the purpose of registration which was refused by making an endorsement on the

document that the same could not be registered in terms of the Government Notification dated

26.3.1999 published in the Rajasthan Gazette dated 1.4.1999 as amended on 22.4.1999 whereby

and where under registration of such documents have been prohibited as being 'opposed to public

policy'. The said notifications were said to have been issued by the State of Rajasthan in exercise of

its power conferred upon it under Section 22-A of the Act. The Respondent herein questioned the

constitutionality of Section 22- A of the Act as inserted by the legislature of Rajasthan as also the

aforementioned notifications by filing a writ petition before the Rajasthan High Court. By reason of

the impugned judgment the Rajasthan High Court declared Section 22-A of the Act as inserted by

the Rajasthan Amendment Act, 1976 being Act No. 16 of 1976 as unconstitutional and consequently

the notifications as contained in annexures 3, 4, 6 and 7 of the writ petition were also quashed. The

Sub-Registrar was also directed to register the power of attorney dated 16.7.1999 which was

presented on 30.7.1999 within two weeks from the date of presentation of the copy of the order.

The state of Rajasthan filed its appeal before Supreme court which was dismissed.


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the Power of Attorney Act has not been amended. Execution of a power of

attorney per se, therefore, is not illegal. Registration of power of attorney

except in cases falling under Section 17(1)(g) or 17(1)(h) is not compulsorily

registrable. Sections 32 and 33 of the India Registration Act also do not bar

any such registration. The Act only strikes at the documents and not at the

transactions. The whole aim of the Act is to govern documents and not the

transactions embodied therein. Thereby only the notice of the public is drawn.

[26-g-h; 27-a; 28-a-b-c-d]*

Referred to:- M.E. Moolla Sons, Ltd. (in Liquidation) v. Official Assignee, Rangoon and Ors., AIR (1936)

PC 230, K. Panchapagesa Ayyar and Anr. v. K. Kalyanasundaram Ayyar and Ors., AIR (1957) MADRAS

472 and Syed Abdullah Sahib v. Syed Rahmatulla Sahib alias Baji Sahib and Ors., AIR (1960) MADRAS

274,

IN KARNATAKA

Justice B Padmaraj, Justice V Jagannathan a Division bench of Karnataka

High Court in the case ofD. Pavanesh vs The State Of Karnataka Reported

in AIR 2006 Kant 97, ILR 2006 KAR 861, 2006 (2) KarLJ 396

FACTS OF THE CASE:- The petitioner is a practicing advocate in Bangalore. He also claims to be a

public spirited person having faith in the rule of law and rendering great social and legal service by

espousing causes of public nature. He has filed this writ petition under Articles 226 and 227 of theConstitution by way of public interest litigation with the prayer for issue of a writ of certiorari

quashing the impugned Notification dated 23-4-2005 bearing No. RD 174 MUNOMU 2005 issued by

the 4th Respondent vide Annexure-A and the consequent Circular dated 23-8-2005 bearing No. RD

174 MUNOMU 2005 issued by the 5th respondent as per Annexure-B. The Government of

Karnataka has issued a Notification classifying the registration of certain documents as opposed to

public policy dated 23-4-2005 which is as per Annexure-A. The Government of Karnataka has also

issued a Circular dated 23-8-2005 in pursuance of the earlier notification dated 23-4-2005 which is

at Annexure-B. The petitioner has presented this writ petition challenging the said notification andcircular issued by the Government of Karnataka in banning registration of certain documents. It is

stated that the registration of various deeds of conveyance were being carried out in the various

parts of the State of Karnataka as per the provisions of the Registration Act and the Rules made

thereunder. The Government of Karnataka has issued a notification dated 23.4.2005 classifying

registration of certain documents as opposed to public policy and it has also issued another circular

dated 23.8.2005 in pursuance of the earlier notification dated 23.4.2005, issuing certain

clarifications. It is the case of the petitioner that such action on the part of the State Government is

opposed to public policy and the interest of the public. The Government of Karnataka has issued a


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notification dated 23-4-2005 in exercise of its powers under Section 22-A of the Registration Act,

1908, as amended by the Karnataka Act 55 of 1976 which is at Annexure-A to the writ petition.

In Para 7 of the above Judgement of Karnataka High Court it is clearly quoted

the case law of Supreme court held in the case ofState of Rajasthan & Ors. VS

Basant Nahata Reported in AIR 2005 SC 3401, 2005 (3) Suppl. SCR 1 ,

2005(12) SCC 77

HIGH COURT QUOTES PARA 54, 55, 59, 60, 61, 63 TO 68 of the Supreme

court Judgment

54. We have noticed hereinbefore that the State of Rajasthan inserted Section 17(1)(f) and (g) in

the Act making the registration of agreement to sale and irrevocable power of attorney relating to

transfer of immovable property in any way of compulsorily registrable document. The State went

further to amend Article 23 of the Second Schedule of the Stamp Act, 1899 making an agreement to

sale of immovable property and irrevocable power of attorney or any other instrument executed in

the course of conveyance etc. with possession to be deemed to be a conveyance and stamp duty is

chargeable thereon accordingly. According to the State, despite such enactments, sales were being

made by seller on the basis of a power of attorney with a right to sell the property and such powers

of attorney were being executed for an unspecified period. A transaction between two persons

capable of entering in to a contract which does not contravene any statute would be valid in law.

The State of Rajasthan does not make such transactions illegal. The Indian Contract Act or the

Power of Attorney Act have not been amended. Execution of a power of attorney per se, therefore,

is not illegal. Registration of power of attorney except in cases falling under Section 17(1)(g) or

17(1)(h) is not compulsorily registrable. Sections 32 and 33 of the Indian Registration Act also do

not bar any such registration.

55. The Act only strikes at the documents and not at the transactions. The whole aim of the Act is to

govern documents and not the transactions embodied therein. Thereby only the notice of the public

is drawn.

59. Hence, Section 22-A of the Act through a subordinate legislation cannot control the transactions,

which fall out of the scope thereof.

60. We have noticed hereinbefore the effect of a power of attorney under the Indian Contract Act or

the Power of Attorney Act. A subordinate legislation which is not backed up by any statutory

guideline under the substantive law and opposed to the enforcement of a legal right, in our opinion,

thus, would not be valid.

61. The question can be considered from another angle. A person may not have any near relative or

is otherwise unable to attend the office of the Sub-Registrar or Registrar within whose jurisdictions

the property is situated. He may even be out of the country. In absence of any substantive


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MY PERSONAL OPINION:- In view of above decisions the GPA transactions

done in genuine cases are not banned either by Supreme court or through

amendment of law. The Supreme courts observations are not applicable

to Karnatakas genuine transactions of GPA, if it is so it might h ave issued

notice to Karnataka Government eliciting its reply as done in 2005 case.

The genuine transactions of GPA disclosing sale amount, with registered

sale agreements and paying appropriate stamp duty as per law prevailing

in Karnataka can be done provided it does not violate any statutory rule.

GENERAL POWER OF ATTORNEY AS DISCUSSED IN CRIMINAL CASE 2009 SC

ofJUSTICE Arijit Pasayat, JUSTICE Lokeshwar Singh Panta, JUSTICE P. Sathasivam

Supreme court of India in the case of CHAMAN LAL & ORS. VS STATE OF PUNJAB &ANR. Reported in AIR 2009 SC 2972 , 2009(11) SCC 721

FACTS OF THE CASE:- In February, 1987 the complainant and his five family members

executed General Power of Attorney (in short the `GPA') at Canada in favour of Manvinder

Singh and subsequently the said GPA was registered with the Commissioner of Ferozepur,

Punjab. The GPA stated that the GPA holder can do anything on behalf of the complainant

which he can lawfully do. The GPA does not contain any condition or restriction. In August,

1989 the GPA holder met the appellants with a proposal to sell a plot of land of the

complainant admeasuring 4840 square yards comprised in Khasra No. 1085 situated at

Village Barewal Awana, Ludhiana. The GPA holder demanded a price of Rs.5 lakhs for the

said property. On 4.10.1989 the appellants by an oral agreement-agreed to purchase the

said property and paid Rs.1 lakh by way of four demand drafts to the GPA holder.

On 4.10.1989 the appellants by an oral agreement-agreed to purchase the said property

and paid Rs.1 lakh by way of four demand drafts to the GPA holder.

On 7.11.1989 the aforesaid oral agreement was reduced into writing and the balance sum

of Rs.4 lakh was also paid (Rs.1 lakh in cash and Rs.3 lakhs by bank drafts). Upon receipt of

entire consideration, the GPA holder executed four SPAs in favour of appellant Nos.1

(Chaman Lal) 2 (Daljander Kaur) 3 (Narinder Kaur) and 7 (Balwant Singh).

On 5.12.1989 by virtue of the aforesaid 5 SPAs dated 7.11.1989 appellant Nos.1, 2, 3 &

7 executed and registered 5 sale deeds in favour of appellant Nos.2 to 6.

In the middle of December, 1989 the appellants suddenly came to know that the

complainant had filed a suit No.120/89 dated 28.11.1989 against Petitioner Nos.1, 2, 3 and

7 for declaration that the said GPA holder (Manvinder Singh) had no authority to sell the

said property and/or to permanently alienate and dispose of the said property. The

appellants also came to know that in the said suit for declaration, an ex-parte injunction

order/status quo was granted on 02.12.1989, though the appellants in the absence of

knowledge- of such ex-parte injunction order had already executed the sale-deeds and got

them registered on 05.12.1989.


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On 14.06.1990 the learned Senior Subordinate Judge passed an order in the aforesaid suit,

restraining the appellants from dispossessing the complainant from the said property and

to maintain status quo with regard to ownership of the said property pending disposal of

the suit, whereas in fact the appellants were already in possession of the said property

since 07.11.1989.

On 20.8.1990 and 21.11.1990 the appellants preferred an Appeal No. 274/67 in the Court

of the learned Additional District Judge, Ludhiana praying, inter alia, to maintain the status

quo with regard to the ownership and possession of the said property and vide order dated

21.11.1990, the parties were ordered, during pendency of the main suit, to maintain status

quo with regard to ownership and possession of the property. On 30.6.1995 the

complainant lodged a complaint with the Deputy Commissioner, Ludhiana - Shri S.S.

Channi, I.A.S., who summoned the appellants at his residence and asked them to cancel the

sale-deeds and concede to the claim of the complainant in the civil suit. The Commissioner

also threatened the appellants with dire consequences by implicating them in false criminal

cases. The said officer is related to the complainant.

On 31.08.1995 after a period of about 6 years, on a complaint lodged by the complainant,

an FIR No. 183, Police Station Division No.5 District Ludhiana was registered only against

Shri Sadhu Singh, Naib Tehsildar, Ludhiana and Shri Banta Singh, Patwari of Village

Barewal Awana under Sections 420, 468,, 471, 120 B IPC.

On 13.3.1996 on application of the complainant, an inquiry was initiated and marked to the

SP City, Ludhiana.

On 29.5.1996 the SP City, Ludhiana submitted his Report to the SSP, Ludhiana stating

therein that the FIR was the handiwork to pressurize the appellants and further that no

such offence had been committed by the appellants.

On 14.10.1996 despite the aforesaid report of the SP City, Ludhiana and in spite of the note

of the A.D.A. (Legal) that no criminal case was made out against the appellants, a charge

sheet under Section 173 Cr.P.C. was filed against the appellants for commission of alleged

offences under Sections 420, 468, 467, 471,120B IPC.

On 11.12.1999 the Ld. ACJM, Ludhiana framed charges under Sections 120B read with

Section 409 IPC and under Sections 120B/420 IPC against the appellants.

The appellants preferred a Criminal Revision No. 512 of 2000 in the Punjab & Haryana

High Court challenging the maintainability of the charges framed against them and the

learned Single Judge of the High Court dismissed the prayer of the appellants by theimpugned order holding that there was sufficient ground to presume that the unrebutted

evidence of the complainant constitute triable offences.

HIGH COURT OBSERVATIONS:-The High Court has found that the acts are not in dispute,

the power of attorney is the central document in the case. The High Court noted that

significantly, too many details of the property in respect of which it was executed were

missing. The High Court observed that the power of attorney was embossed with the stamp

of Commissioner, Firozepur on 19th March, 1987 prima facie on making it a valid

document. But nevertheless a plain reading of the power of attorney leaves one with the


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uncertain feeling as regards its true import. The High Court observed that it is possible that

the appellants were duped by the attorney who had known that his power has been

revoked but concealed the fact. Thereafter having coming to this conclusion the High Court

noted as follows:

Such an argument could have been validly advanced by the petitioners to establish their

bonafides if the power of attorney itself had mentioned the details of the property in

dispute and had also mentioned specifically that the attorney had the power to alienate the

property through sale, mortgage and lease etc. The petitioners must have examined the

document because it was from the document that the power to enter into the agreement to

sell had come to vest in Manvinder Singh. If even after examining the document the

petitioners went ahead with the transaction they did so at their own peril. They lacked

bonafides and were out to deprive the owner of his property by a series of transactions.

SUPREME COURT HELD THAT:- We are in agreement with the view expressed by the

High Court. However, we make it clear that the observations made by the High Court while

dismissing the petition before it shall not be considered to be conclusive and determined. It

has been rightly noted that Manvinder accepted the factum of cancellation but thereafter

executed the special power of attorney.

STAMP DUTY AMENDMENT TO TAX GPA DEED WITH STAMPO DUTY WHEN IT IS

MADE WITHOUT CONSIDERATION IS VALID 2012 SC

in the case ofState OfJustice R.M. Lodha, and Justice H.L. Gokhale

M.P. vs Rakesh Kohli & Anr. Decided on 11 May, 2012

FACTS OF THE CASE:- Two writ petitions came to be filed before the Madhya

Pradesh High Court. In both writ petitions initially it was prayed that Clauses (f)

and (f-1), Article 48, Schedule 1- A brought in the 1899 Act by Section 3 of the

Indian Stamp (Madhya Pradesh Amendment) Act, 1997 (for short, M.P. 1997

Act) be declared ultra vires. During the pendency of these petitions, the 1899 Act

as applicable to Madhya Pradesh was further amended by the M.P. 2002 Act. The

respondents, referred to as writ petitioners, amended their writ petitions and

prayed that Clause (d), Article 45 of Schedule 1-A of the 1899 Act as substituted

by M.P. 2002 Act be declared ultra vires. The writ petitioners set up the case that

original Article 48 of the 1899 Act, Schedule 1-A prescribed stamp duty payable at

Rs. 10/- if attorney was appointed for a single transaction. By M.P. 1997 Act,

Article 48 Clause (f) was substituted by Clauses (f) and (f-1). Clause (f-1) provided

that where power of attorney was executed without consideration in favour of

person who is not his or her spouse or children or mother or father and

authorizes him to sell or transfer any immovable property, the stamp duty would

be leviable as if the transaction is conveyance under Article 23. Explanation II


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provision is arbitrary, unreasonable and irrational is unsustainable.

Consequently, these appeals are allowed and the judgment of the Madhya

Pradesh High Court passed on September 15, 2003 is set aside.

OTHER IMPORANT CASE LAW ON THE MATTER

1. EVEN AFTER EXECUTING A POWER OF ATTORNEY THE PRINCIPAL CAN ACT ON HIS OWN 2011 SC

DEB RATAN BISWAS & ORS .Vs. MOST. ANAND MOYI DEVI & ORS JUDGEMENT, POWER OF ATTORNEY -EXECUTION -PRINCIPAL -POWER Citation(s) 2011 AIR 1653 = 2011 SCR 303 = 2011 (4 ) JT 244 = 2011 (4 ) SCALE 656

The trial court rightly held that `S' was only an attorney and he cannot claim any independent capacity

in the proceedings. The principal `P' and À' signed the compromise for partition of the property, which

in law amounts to implied revocation of power of attorney in favour of `S' vide Illustration to Section

207 of the Indian Contract Act. `P' and À' cannot be allowed to say that their own act of signing the

compromise petition was collusive and fraudulent. [Para 9]

The High Court observed that `P' and À' should have consulted the power of attorney `S' before

signing the compromise petition. This is a strange kind of reasoning. The principal is not bound to

consult his attorney before signing a compromise petition. The High Court also held that if `S' was not

willing to sign the compromise petition his unwillingness should have been mentioned in the

compromise petition. This also is a strange reasoning. It is well-settled that even after execution of a

power of attorney the principal can act independently and does not have to take the consent of the

attorney. The attorney is after all only an agent of the principal. Even after executing a power of

attorney the principal can act on his own. [Paras 11, 12]

2. REGISTERED POWER OF ATTORNEY CANNOT BE CANCELLED BY MERE FILING OF POLICE COMPLAINT 2010 SC

SHANTI BUDHIYA VESTA PATEL & ORS .Vs. NIRMALA JAYPRAKASH TIWARI & ORS JUDGEMENT, CIVIL LAW -CONSENT

DECREE -POWER OF ATTORNEY -FRAUD Citation(s) 2010 AIR 2132 = 2010 (4 ) SCR 958 = 2010 (5

) SCC 104 = 2010 (4 ) JT 196 = 2010 (4 ) SCALE 182

The allegation of appellants that they had revoked the Powers of Attorney executed by them in favour

of the respondent no. 9 by filing complaints with the police is devoid of merit. Although there is no

denying the fact that three complaints were filed on three different dates with the police against the

alleged harassment and threats by respondent nos. 8 and 9, it is difficult to understand how the

Powers of Attorney executed by the appellants or their predecessor-in-interest stood revoked. The

record of the case would reveal that each of the complaints was filed by a separate person - the first

complaint was filed by the appellants themselves, the second by an Advocate and the third by one

`NMP', who was himself a builder. All these complaints came to be filed when said `NMP' came into the

picture. Further, all the Powers of Attorney executed in favour of respondent no. 9 as also all the deeds

and documents entered into between the predecessor-in-interest of the appellants and respondent no.

9 were duly registered with the office of the Sub-Registrar. Neither any document nor any of the

Powers of Attorney was ever got cancelled by the appellants.

The stand taken by the appellants throughout that they had, by executing a Power of Attorney in

favour of `NMP', revoked the Powers of Attorney executed in favour of respondent no. 9 is found to be

baseless. In fact, a look at the terms of the Power of Attorney executed in favour of `NMP' would show

to the contrary.

3. GPA TO SELL PROPERTY TO BE EXECUTED BEFORE SUB-REGISTRAR AND GET IT DULY AUTHENTICATED 2009 SC

RAJNI TANDON .Vs. DULAL RANJAN GHOSH DASTIDAR & ANR DOJ : REGISTRATION -POWER OF ATTORNEY -ACTUAL

EXECUTANT -ENTITLEMENT Citation(s) 2009 (11 ) SCR 686 = 2009 (14 ) SCC 782 = 2009 (11 ) JT 666 = 2009 (10

) SCALE 402

Section 32 of the Registration Act deals with persons who are eligible to present documents for

registration before the proper registration office. Section 32 specifies three categories of persons who


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can present documents for registration. The use of the word "or" betweenthe clauses of Section 32

demonstrates that the legislature intended the said clauses to be read disjunctively and not

conjunctively. It is settled law that the use of the word `or' is used to signify the disjunctive nature of a

provision. [Para 20]

Clause (a) of Section 32 specifies that a document can be presented for registration

(i) by the person executing the document;

(ii) any person claiming under the document presented for registration and

(iii) in the case the said document is a copy of a decree or order, any person claiming under the decree

or order.

Clause (b) and (c) deal with cases where the document is presented not by any person mentioned in

(i), (ii) and (iii) of sub clause (a) but by their agent, representative or assign. This is so because the use

of the words "such person" in clause (b) and (c) can be understood to mean only persons as referred to

in (i), (ii) and (iii) above. In so far as clause (c) of Section 32 is concerned, the agents, representative or

assigns of the persons referred to in (i), (ii) and (iii) can present the said document for registration

only if they are duly authorized by power-of-attorney and executed and authenticated.

The words "executed and authenticated in Section 32 (c) would mean the procedure specified in

Section 33.

This is clear from the opening words of Section 33 which reads "for the purposes of Section 32, the

following power-of- attorney shall alone be recognised". Section 32 refers to documents presented for

registration by a holder of "power-of-attorney" in Clause (c) and it therefore follows that the

procedure specified under Section 33 would be attracted where a document is presented by a person

holding a "powers-of-attorney" of the persons mentioned in Clause (a) of Section 32. [Paras 21 and 22]

Section 32 of the Act requires the documents sought to be registered, to be presented by the person

executing it. The said expression requires presence of the actual person executing the document. The

basic principle underlying this provision of the Act is to get before the Sub-Registrar the actual

executant who, in fact, executes the document in question. The expression "person executing" used inSection 32 of the Act, can only refer to the person who actually signs or marks the document in token

of execution, whether for himself or on behalf of some other person.

Thus, "person executing" as used in Section 32 (a) of the Act signifies the person actually executing the

document and includes a principal who executes by means of an agent. Where a person hold a power

of attorney which authorises him to execute a document as agent for some one else, and he executes a

document under the terms of the power of attorney, he is, so far as the registration office is concerned,

the actual executant of the document and is entitled under Section 32 (a) to present it for registration

and get it registered. [Paras 23 and 24]

In the facts of the present case, it is quite clear that Indra Kumar Halani, was given the full authority by

Nandalal Tantia under the power of attorney to transfer the suit property and to execute the necessary

document. The said document was executed by Indra Kumar Halani in the name and on the behalf of

Nandalal Tantia thereof. Therefore, for the purposes of registration office under Section 32 (a) of the

Act Indra Kumar Halani is clearly the "person executing" the document. Therefore, it follows that the

said sale deed which was executed and authenticated by Indra Kumar Halani could be presented for

registration by him. Indra Kumar Halani acted in the manner mandated under Section 32 (a) of the Act.


19/24

[Para 26]

The object of registration is designed to guard against fraud by obtaining a contemporaneous

publication and an unimpeachable record of each document. The instant case is one where no

allegation of fraud was raised. In view thereof the duty cast on the Registering Officer under Section 32

of the Act was only to satisfy himself that the document was executed by the person by whom it

purports to have been signed. The Registrar upon being so satisfied and upon being presented with a

document to be registered had to proceed with the registration of the same. [Para 27]

Where a deed is executed by an agent for a principal and the same agent signs, appears and presents

the deed or admits execution before the Registering Officer, that is not a case of presentation under

Section 32 (c) of the Act. The provisions of Section 33 will come into play only in cases where

presentation is in terms of Section 32 (c) of the Act. In other words, only in cases where the person

signing the document cannot present the document before the registering officer and gives a power of

attorneyto another to present the document that the provisions of Section 33 get attracted. It is only in

such a case, that the said power of attorney has to be necessarily executed and authenticated in the

manner provided under Section 33 (1) (a) of the Act. [Para 29]

In the instant case, Indra Kumar Halani executed the document on behalf of Shri N. L. Tantia under the

terms of this power of attorney. He then presented it for registration at the Registration Office and it

was registered. The plea taken by the respondents that in order to enable him to present the document

it was necessary that he should hold a power of attorney authenticated before the Sub-Registrar under

the provisions of Section 33 is thus not supported by the language of Section 32. The provisions of

Section 33 therefore only apply where the person presenting a document is the general attorney of the

person executing it, and not where it is presented for registration by the actual executant, even though

he may have executed it as agent for some one else. In this case, the presentation is by the actual

executant himself and is hence is entitled under Section 32 (a) to present it for registration and to get

it registered. [Para 30]

4. BHATORI .Vs. RAM PIARI DOJ : DEEDS & DOCUMENTS -POWER OF ATTORNEY -FRAUD -SUIT

Citation(s) 1996 AIR 2754 = 1996 ( 4 ) Suppl. SCR 180 = 1996 (11 ) SCC 655 = 1996 ( 7 ) JT 210 = 1996 ( 5

) SCALE 752

FRAUD ON GPA UNRAVELS THE CONTRACT AND IT IS VOID 1996 SC

Respondent-2 having had power of attorney in his favour from appellant played fraud upon her and

got lands transferred in the name of his wife-Having been defrauded appellant is entitled to lay the suit

for declaration of title and other reliefs-Fraud unravels the contract and it is void-Suit decreed with

exemplary costs. Held, fraud unravels the contract and it is void.*

*Mithilesh Kumar & Anr. v. Prem Behari Khare, [1989] 2 SCC 95 and R. Rajagopala Reddy v. Padmini

Chandrashekharan, [1995] 2 SCC 630,

TOTAL CONCLUSION:- Only GPA SALES which is being treated SA(sale

agreement)/GPA/Will as completed sale transaction in several states is

banned and declared illegal by Supreme Court. The right of a party to execute

GPA as per law is still legal.


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PRECEDENTS OR CASE LAW AND ITS IMPORTANCE - COLLECTED

(2002)3 SCC 496, Haryana State Financial Corporation v. Jagdamba Oils Ltd . Courts

should not place reliance on decisions without discussing as to how the factual situation

fits in with the fact situation of the decision on which reliance is placed. Observations ofCourts are not to be read as Euclid's theorems nor as provisions of the statute. These

observations must be read in the context in which they appear. Judgments of courts are not

to be construed as statutes. To interpret words, phrases and provisions of a statute, it may

become necessary for judges to embark into lengthy discussions but the discussion is

meant to explain and not to define. Judges interpret statues, they do not interpret

judgments. They interpret words of statutes, their words are not to be interpreted as

statutes.

The rule of precedent is not without exceptions. It has its own limitations. Besides that, the

law changes with the changed circumstances and even good law may be renderedineffective or unconstitutional because of passage of time, as reflected in the principle

"cessante ratione cessat ipsa lex". Adopting this Maxim, the Supreme Court in the case

ofState of Punjab and Anr. v. Devans Modern Breweries Ltd. and Anr. ,AIR 1979 SC1158 stated that, with changes that are bound to occur in an evolving society, the judiciarymust also keep abreast of these changes in order that the law is considered to be good law.

This is extremely pertinent especially in the current era of globalisation where the entire

philosophy of society, on the economic front, is undergoing vast changes. Besides this well

accepted precept, there are exceptions to the rule of precedent. There are judiciously

accepted exceptions to the rule of precedent and they are decisions per incuriam,

subsilentio and stare decisis. These principles explain when and where a precedent, which

is otherwise a good law, necessarily need not be accepted in subsequent judgments if itfully satisfies essentials of these exceptions.

In the case of Commissioner of Customs (Fort) v. Toyota Kirloskar Motor (P) Ltd. ,(2007) 5 SCC 371 the Supreme Court stated the law relating to precedents and held that adecision, as is well known, is an authority for what it decides and not what can logically be

deduced therefrom. The ratio of a decision must be culled out from the facts involved in a

given case and need not be an authority in generality without reference to the reasons,discussions and facts of the case.

2002 (3) SCC 533 (Padma Sundara Rao (Dead) and others vs State of T.N andOthers), wherein, the Apex Court held thus: "There is always peril in treating the words ofa speech or judgment as though they are words in a legislative enactment, and it is to be

remembered that judicial utterances are made in the setting of the facts of a particular case,

.. Circumstantial flexibility, one additional or different fact may make a world

of difference between conclusions in two cases."

In General Electric Co. v. Renusagar Power Co., 1987 SCR (3) 858, 1987 SCC (4)137 . it was held: "As often enough pointed out by us, words and expressions used in ajudgment are not to be construed in the same manner as statutes or as words and

expressions defined in statutes. We do not have any doubt that when the words

"adjudication of the merits of the controversy in the suit" were used by this Court in State

of U.P. v. Janki Saran Kailash Chandra , the words were not used to take in every

adjudication which brought to an end the proceeding before the court in whatever manner

but were meant to cover only such adjudication as touched upon the real dispute between

the parties which gave rise to the action. Objections to adjudication of the disputes between

the parties, on whatever ground are in truth not aids to the progress of the suit but hurdles

to such progress. Adjudication of such objections cannot be termed as adjudication of the

merits of the controversy in the suit. As we said earlier, a broad view has to be taken of the

principles involved and narrow and technical interpretation which tends to defeat the

object of the legislation must be avoided."


21/24

In Rajeshwar Prasad Mishra v. The State of West, Bengal and Anr. reported in AIR1965 SC 1887, it was held: "Article 141 empowers the Supreme Court to declare the lawand enact it. Hence the observation of the Supreme Court should not be read as statutory

enactments. It is also well known that ratio of a decision is the reasons assigned therein."

Bhavnagar University vs- Palitana Sugar Mills Pvt. Ltd., 2003(2) SC 111 cautionsthat a little difference in facts or additional facts may make a lot of difference in theprecedential value of a decision.

In Director of Settlement, A.P. vs- M.R. Apparao, (2002) 4 Supreme Court Cases 638 , aThree Judge Bench has opined that Article 141 of the Constitution unequivocally indicates

that the law declared by the Supreme Court shall be binding on all courts within the

territory of India. The aforesaid Article empowers the Supreme Court to declare the law. It

is, therefore, an essential function of the Court to interpret a legislation. The statements of

the Court on matters other than law like facts may have no binding force as the facts of two

cases may not be similar. But what is binding is the ratio of the decision and not any finding

of facts. It is the principle found out upon a reading of a judgment as a whole, in the light ofthe questions before the Court that forms the ratio and not any particular word or

sentence. To determine whether a decision has declared law it cannot be said to be a law

when a point is disposed of on concession and what is binding is the principle underlying a

decision. A judgment of the Court has to be read in the context of questions which arose for

consideration in the case in which the judgment was delivered. An obiter dictum as

distinguished from a ratio decidendi is an observation by the Court on a legal question

suggested in a case before it but not arising in such manner as to require a decision. Such

an obiter may not have a binding precedent as the observation was unnecessary for the

decision pronounced, but even though an obiter may not have a binding effect as a

precedent, but it cannot be denied that it is of considerable weight. The law which will be

binding under Article 141 would, therefore, extend to all observations of points raised anddecided by the Court in a given case.

The Constitution Bench has also reiterated this view in Islamic Academy of Education vs-

State of Karnataka, (2003) 6 SCC 697 = 2003(6) Scale 325, viz . that the ratio decidendiof a judgment can be obtained only from a reading of its entirety.

The opinion of the Apex Court in Bharat Petroleum Corporation Ltd. vs- N.R.Vairamani, AIR 2004 SC 778 is in similar vein. Their Lordships observedthat Observations of Courts are neither to be read as Euclids theorems nor as provisions of

the statute and that too taken out of their context. These observations must be read in the

context in which they appear to have been stated. Judgments of Courts are not to beconstrued as statutes.

This is also the opinion of the Court in Punjab National Bank vs- R.L.Vaid, (2004) 7 SCC698. In State of Gujarat vs- Akhil Gujarat Pravasi, AIR 2004 SCC 3894 , the Hon'bleSupreme Court has observed that any observation made during the course of reasoning in ajudgment should not be read divorced from the context in which they were used.

In Zee Tele Films vs- Union of India, AIR SCW 2005 2985, the Apex Court has

unequivocally declared that a decision is not an authority for the proposition which did notfall for its consideration.

In M/s A-One Granites vs- State of U.P., AIR 2001 SC 1203: (2001) 3 SCC 537 it hadbeen contended that the controversy was covered on all fours by a previous decision of the

Court. The contention was rejected in these words- This question was considered by the

Court of Appeal in Lancaster Motor Co. (London) Ltd. v. Bremith Ltd., (1941) 1 KB 675, and

it was laid down that when no consideration was given to the question, the decision cannot

be said to be binding and precedents sub silentio and without arguments are of no

moment.


22/24

Following the said decision, this Court in the case of Municipal Corporation of Delhi v.Gurnam Kaur, (1989) 1 SCC 101: (AIR 1989 SC 38) observed thus (at p. 43 of AIR): InGerard v. Worth of Paris Ltd. (K), (1936) 2 All ER 905 (CA), the only point argued was on

the question of priority of the claimant's debt, and on this argument being heard, the Court

granted the order. No consideration was given to the question whether a garnishee order

could properly be made on an account standing in the name of the liquidator. When,therefore, this very point was argued in a subsequent case before the Court of Appeal in

Lancester Motor Co. (London) Ltd. v. Bremith Ltd., (1941) 1 KB 675, the Court held itself

not bound by its previous decisions. Sir Wilfrid Greene, M.R., said that he could not help

thinking that the point now raised had been deliberately passed sub silentio by counsel in

order that the point of substance might be decided. He went on to say that the point had to

be decided by the earlier Court before it could make the order which it did; nevertheless,

since it was decided without argument, without reference to the crucial words of the rule,

and without any citation of authority, it was not binding and would not be followed.

Precedents sub silentio and without argument are of no moment. This rule has ever since

been followed.

In State of U.P. v. Synthetics and Chemicals Ltd., (1991) 4 SCC 139, reiterating the sameview, this Court laid down that such a decision cannot be deemed to be a law declared to

have binding effect as is contemplated by Article 141 of the Constitution of India and

observed thus: A decision which is not express and is not founded on reasons nor it

proceeds on consideration of issue cannot be deemed to be a law declared to have a

binding effect as is contemplated by Article 141.

In the case of Arnit Das v. State of Bihar, 2000 (5) SCC 488 : (2000 AIR SCW 2037 : AIR2000 SC 2264 : 2000 Cri LJ 2971), while examining the binding effect of such a decision,this Court observed thus (Para20): A decision not expressed, not accompanied by reasons

and not proceeding on a conscious consideration of an issue cannot be deemed to be a lawdeclared to have a binding effect as is contemplated by Article 141. That which has escaped

in the judgment is not the ratio decidendi. This is the rule of sub silentio, in the technical

sense when a particular point of law was not consciously determined.

The frequently quoted opinion of the House of Lords in Quinn vs- Leathem, 1901 AC 495 :

(1900-3) All ER Rep 1 is to the effect that every judgment must be read as applicable to the

particular facts proved or assumed to be proved .... The other is that a case is only an

authority for what is actually decides. These quotations have been reiterated in GoodyearIndia Ltd. -vs- State of Haryana, (1990) 2 SCC 71 and State of Orissa -vs- SudhansuSekhar Misra, AIR 1968 SC 647.

In the latter case, the Court explicitly opined that a decision on a question which has not

been argued cannot be treated as a precedent. Their Lordships, in turn, referred back to the

previous opinion in Rajput Ruda Meha -vs- State of Gujarat, 1980 SC 1707 in which ithad similarly been stated that where an issue has neither been raised nor argued any

decision by the Court, even after 'pondering over the issue in depth', would not be abinding precedent.

Similar observations have been made by the Constitution Bench in Padma SundaraRao -vs- State of T.N., 2002(3) SCC 533, as is evident from the following extract: Courtsshould not place reliance on decisions without discussing as to how the factual situation

fits in with the fact situation of the decision on which reliance is placed. There is always

peril in treating the words of a speech or judgment as though they are words in a legislative

enactment, and it is to be remembered that judicial utterances are made in the setting of

the facts of a particular case, said Lord Morris in Herrington v. British Railways Board,

(1972) 2 WLR 537. Circumstantial flexibility, one additional or different fact may make a

world of difference between conclusions in two cases.

A profound and perspicuous analysis of the principle of stare decisis is to be found inState of Gujarat vs- Mirzapur Moti Kureshi Kassab Jamat, AIR 2006 SC 212. We cannotdo better than to extract the relevant portions thereof in order to buttress and justify the

approach we propose to adopt: Stare decisis is a Latin phrase which means ``to stand by

decided cases; to uphold precedents; to maintain former adjudication'`. This principle is


23/24

expressed in the maxim ``stare decisis et non quieta movers'` which means to stand by

decisions and not to disturb what is settled. This was aptly put by Lord Coke in his classic

English version as ``Those things which have been so often adjudged ought to rest in

peace'`. However, according to Justice Frankfurter, the doctrine of stare decisis is not ``an

imprisonment of reason'` (Advanced Law Lexicon, P. Ramanatha Aiyer, 3rd Edition 2005,

Volume 4, p. 4456). The underlying logic of the doctrine is to maintain consistency andavoid uncertainty. The guiding philosophy is that a view which has held the field for a long

time should not be disturbed only because another view is possible. The trend of judicial

opinion, in our view, is that stare decisis is not a dogmatic rule allergic to logic and reason;

it is a flexible principle of law operating in the province of precedents providing room to

collaborate with the demands of changing times dictated by social needs, State policy and

judicial conscience.

According to Professor Lloyd concepts are good servants but bad masters. Rules, which are

originally designed to fit social needs, develop into concepts, which then proceed to take on

a life of their own to the detriment of legal development. The resulting ``jurisprudence of

concepts'` produces a slot- machine approach to law whereby new points posing questionsof social policy are decided, not by reference to the underlying social situation, but by

reference to the meaning and definition of the legal concepts involved. This formalistic a

priori approach confines the law in a strait-jacket instead of permitting it to expand to meet

the new needs and requirements of changing society (Salmond on Jurisprudence, Twelfth

Edition, at p. 187). In such cases Courts should examine not only the existing laws and legal

concepts, but also the broader underlying issues of policy. In fact presently, judges are seen

to be paying increasing attention to the possible effects of their decision one way or the

other. Such an approach is to be welcomed, but it also warrants two comments. First,

judicial inquiry into the general effects of a proposed decision tends itself to be of a fairly

speculative nature. Secondly, too much regard for policy and too little for legal consistency

may result in a confusing and illogical complex of contrary decisions. In such a situation itwould be difficult to identify and respond to generalized and determinable social needs.

While it is true that ``the life of the law has not been logic, it has been experience'` and that

we should not wish it otherwise, nevertheless we should remember that ``no system of law

can be workable if it has not got logic at the root of it'`

Consequently, cases involving novel points of law, have to be decided by reference to

several factors. The judge must look at existing laws, the practical social results of any

decision he makes, and the requirements of fairness and justice. Sometimes these will all

point to the same conclusion. At other times each will pull in a different direction; and here

the judge is required to weigh one factor against another and decide between them. The

rationality of the judicial process in such cases consists of explicitly and consciouslyweighing the pros and cons in order to arrive at a conclusion.

In case of modern economic issues which are posed for resolution in advancing society or

developing country, the court cannot afford to be static by simplistically taking shelter

behind principles such as stare decisis, and refuse to examine the issues in the light of

present facts and circumstances and thereby adopt the course of judicial ``hands off'`.

Novelty unsettles existing attitudes and arrangements leading to conflict situations which

require judicial resolution. If necessary adjustments in social controls are not put in place

then it could result in the collapse of social systems. Such novelty and consequent conflict

resolution and ``patterning'` is necessary for full human development.

Stare decisis is not an inexorable command of the Constitution or jurisprudence. A careful

study of our legal system will discern that any deviation from the straight path of stare

decisis in our past history has occurred for articulable reasons, and only when the Supreme

Court has felt obliged to bring its opinions in line with new ascertained fact, circumstances

and experiences.

Given the progressive orientation of the Supreme Court, its creative role under Article 141

and the creative elements implicit in the very process of determining ratio decidendi, it is

not surprising that judicial process has not been crippled in the discharge of its duty to

keep the law abreast of the times, by the traditionalist theory of stare decisis. Times and

conditions change with changing society, and, ``every age should be mistress of its own


24/24

law'` - and era should not be hampered by outdated law. ``It is revolting'`, wrote Mr. Justice

Holmes in characteristically forthright language, ``to have no better reason for a rule of law

than it was so laid down in the time of Henry IV. It is still more revolting if the grounds

upon which it was laid down have vanished long since, and the rule simply persists from

blind imitation of the past'`. It is the readiness of the judges to discard that which does not

serve the public, which has contributed to the growth and development of law.

The doctrine of stare decisis is generally to be adhered to, because well settled principles of

law founded on a series of authoritative pronouncements ought to be followed. Yet, the

demands of the changed facts and circumstances dictated by forceful factors supported bylogic, amply justify the need for a fresh look.

In Municipal Corporation of Delhi vs- Gurnam Kaur, AIR 1989 SC 38 the Three-JudgeBench had to decide the legal propriety of a High Court order which applied Supreme Court

direction, with the consent of parties, for grant of alternate site to persons who had

encroached on pavements. Their Lordships observed that the High Court could not have

passed similar orders as it would have been contrary to the provisions contained inSections 320 and 322 of the Delhi Municipal Corporation Act, 1957. In that context it was

observed thus- Quotably as law applies to the principle of a case, its ratio decideni. The only

thing in a Judges decision binding as an authority upon a subsequent Judge is the principle

upon which the case was decided. Statements which are not part of the ratio decidendi are

distinguished as obiter dicta and are not authoritative. The Seven-Judge Bench in A.R.

Antulay vs- R.S. Nayak, AIR 1988 SC 1531 defines per incuriam as those decisions given in

ignorance or forgetfulness of some inconsistent statutory provision or of some authority

binding on the Court concerned, so that in such cases some part of the decision or some

step in the reasoning on which it is based, is found, on that account to be demonstrably

wrong.

In Bharat Sanchar Nigam Ltd. vs- UOI, (2006) 3 SCC 1 the Supreme Court has clarifiedthat a Bench can take a different view by distinguishing it or where the earlier view is per

incuriam. These fetters apply only to Coordinate Benches which, if either of the gateways

cannot be traversed, must refer the point of controversy to a Bench of superior strength or

of superior jurisdiction.

Documents

Only Gpa Sales and Such Transfers Are Banned by Supreme Court and Not Genuine and Legally Valid Gpa - An Article by Sridharababu.n