Supreme Court Clarifies Limits On Title Transfer Through Informal Documents

In October 2025, a significant legal issue impacting the Indian real estate sector has emerged from a recent Supreme Court judgment that redefines how ownership in immovable property is recognized. The Court, in Ramesh Chand v. Suresh Chand (decided on September 1, 2025), reaffirmed that informal instruments such as an Agreement to Sell, General Power of Attorney (GPA), or Will cannot, by themselves, convey ownership of property. This clarification has far-reaching consequences for property buyers, developers, and investors, especially in regions like Karnataka where informal transfers are still common practice.

The Court observed that under Section 54 of the Transfer of Property Act, 1882, an Agreement to Sell merely creates a contractual right to obtain a sale deed in the future, it does not by itself pass ownership or confer title. Similarly, a GPA is only an instrument of agency that authorizes another person to act on behalf of the owner; it cannot be treated as a conveyance deed unless it specifically and lawfully transfers ownership. Further, even a registered Will, though it may indicate testamentary intent, does not automatically transfer title unless it is duly proved under the Indian Succession Act, 1925, and the Indian Evidence Act, 1872, when its validity is contested.

This ruling re-emphasizes the Court’s consistent stand against the widespread misuse of GPA and similar documents to effect property transfers an issue earlier addressed in the landmark Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana (2011). The judgment serves as a warning to individuals who rely on such informal mechanisms to buy or sell property without executing a proper registered sale deed.

The implications of this ruling are substantial. Buyers holding only agreements or GPAs cannot claim legal ownership unless a registered conveyance deed exists. Developers and financial institutions must exercise heightened due diligence to verify the authenticity and completeness of title documents. For those engaged in property due diligence, this judgment highlights the necessity of reviewing the chain of title and ensuring that ownership has been lawfully transferred through registered instruments.

In conclusion, the October 2025 legal update highlights the judiciary’s firm stance on reinforcing transparency and formalization in property transactions. It strengthens the regulatory framework against benami and fraudulent transactions and promotes a more accountable real estate market, aligned with the government’s push toward digital and legally compliant land and registration systems.