The continuation of the Delhi High Court`s finding at Asha M. Jain v. Canara Bank – 94 (2001) DLT 841 that the “concept of proxy selling has been recognized as transactional” for transactions carried out by SA/GPA/WILL is unjustified and unintended to mislead the fact that SA/GPA/WILL transactions are some kind of recognized or accepted mode of transmission and that they may be a valid substitute for an instrument of sale. These decisions, insofar as they recognize or accept SA/GPA/WILL transactions as concluded transfers, unlike a delegation agreement, are not a legitimate right. The Supreme Court sent a communication to the states of Delhi, Haryana, Punjab, Uttar Pradesh to express their views on this issue. The four States responded by confirming that transfers of SA/GPA/WILL should be discouraged, as they lead to a loss of revenue (stamp duty) and an increase in disputes due to defective securities. You also referred to some of the measures taken in that name. The measures differ from one State to another. Remember here that both parties must comply with the conditions set out in the sales contract. Any party that fails to comply with any of the conditions set out in the agreement may be brought before the courts if the other party so wishes. All parties concerned should also ensure that this document can be invoked as legal evidence before the courts of the law and that all those who have agreed to comply with the conditions are legally bound by it.
In that judgment, the importance of the documents forming part of the right of sale transaction for legal sanctity was discussed, such as: (i) that the date of the agreement fixing the amount of consideration and the date of registration for the transfer of the property are not identical; and even if the signing of the sales contract does not mean that the sale is over, it is a decisive step in this direction. For this reason, buyers need to know precisely the conditions set out in the agreement. Last but not least, it is important to mention that in the above-mentioned judgment Hon`ble Bench simply drew attention to the legal situation, that SA/GPA/WILL transactions are not transfers or sales and that such transactions cannot be treated as transfers or transfers concluded. . . .