Three sources of risk account for a disproportionate share of property disputes across India.
None of them are obscure. All three are entirely preventable through structured legal verification conducted before the transaction is completed. And all three are documented in detail in Dr. Sravan Kumar’s The Indian Law of Property Due Diligence and Title Examination because they represent the areas where buyers most commonly rely on assumptions that Indian property law does not support.
Source One: The GPA sale that transfers no title:
The use of a General Power of Attorney as a substitute for a registered conveyance has produced sustained and serious title risk in Indian property markets for decades.
A seller does not want to register a proper sale deed. Instead the transaction is structured as a GPA sale, with an agreement to sell, a general power of attorney authorizing the buyer to deal with the property, and sometimes a will. Possession is transferred. The buyer believes they own the property.
The Supreme Court in Suraj Lamp and Industries Private Limited versus State of Haryana resolved the legal question with complete clarity. Transactions styled as GPA sales do not create or transfer title to immovable property under Indian law. Section 54 of the Transfer of Property Act, 1882 requires that a sale of immovable property of value one hundred rupees and above be made by a registered instrument. A general power of attorney is not a registered conveyance. A will is not a conveyance. An agreement to sell is not a conveyance.
The buyer who acquired property through a GPA chain may be in possession and may have paid full value. In law, they hold no title. The legitimate owner can assert their rights. The buyer has no legal defense.
Source Two: Revenue records that do not prove ownership:
Across India, buyers and sellers regularly cite revenue records as proof of ownership. The khata in Karnataka. The patta in Tamil Nadu. The pahani or Record of Rights in other states. The mutation entry.
Not one of these is a title document. Revenue records reflect possession and revenue liability. They are maintained for administrative and fiscal purposes. A mutation entry recording a change in the revenue register following a transfer is an administrative act that updates the revenue register. It is not an instrument of transfer.
The Supreme Court has confirmed this position in Jitendra Singh versus State of Madhya Pradesh, Balwant Singh versus Daulat Singh, and Sawarni versus Inder Kaur across different factual contexts. Mutation entries do not create or confirm ownership rights.
A buyer who relies on the khata or patta as evidence of the seller’s ownership has relied on the wrong document. The revenue record is a useful part of the investigation into possession and fiscal status. It is not a substitute for title verification.
Source Three: The undisclosed encumbrance that the buyer inherits:
A mortgage, charge, or lien that the seller knows about but does not mention, or that the buyer fails to discover because they did not conduct the searches that the law requires, can transfer from seller to buyer through a registered sale deed and bind the buyer completely.
Under Section 3 of the Transfer of Property Act, 1882, a buyer is deemed to have constructive notice of every registered encumbrance affecting the property. This means that if a mortgage is registered at the Sub-Registrar’s office and the buyer did not examine the Encumbrance Certificate, the buyer takes the property subject to that mortgage. The law does not excuse the buyer on the ground that the seller did not disclose it. The public record existed. The buyer is presumed to have read it.
An Encumbrance Certificate from the Sub-Registrar’s office discloses registered transactions affecting the property. But it does not capture equitable mortgages created by deposit of title deeds, which are recorded in the CERSAI system. A buyer who conducts one search but not the other has a gap that a secured creditor can step through.
The Indian Law of Property Due Diligence and Title Examination by Dr. Sravan Kumar is available on Amazon, Flipkart, Kindle, and Google Books. Buy now and understand the three sources of hidden risk that no registered sale deed automatically protects you against.
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