Preventing GPA Misuse in NRI-Owned Property in India

Author: Advocate Harshit Sachar
Place of Practice: Ludhiana, Punjab
Jurisdiction: Punjab & Across India

NRIs can prevent misuse of Power of Attorney (GPA) in property matters by granting limited and specific authority, registering the POA properly, monitoring transactions, avoiding blanket powers, and periodically reviewing revenue records. A poorly drafted GPA is one of the most common causes of property fraud involving NRI-owned assets.

Why GPA Misuse Is Common in NRI Cases

NRIs often rely on relatives or associates to manage property due to geographical distance. This creates vulnerability when:

• Blanket authority is granted

• POA is used beyond intended purpose

• Property is sold without knowledge

• Mutation entries are altered

• Loan or mortgage is created without consent

In high-value properties, misuse can result in multi-crore losses.

Common Forms of GPA Misuse

1️⃣ Unauthorized Sale of Property

An agent may execute sale deed:

• Without informing the NRI

• At undervalued price

• In favour of related parties

Even if sale is registered, it can lead to prolonged litigation.

2️⃣ Creation of Mortgage or Charge

GPA holder may:

• Mortgage property

• Create loan liability

• Use property as security

Such acts complicate ownership and recovery.

3️⃣ Illegal Mutation Changes

Revenue records may be altered to:

• Add third-party names

• Transfer possession status

• Strengthen illegal claims

Revenue manipulation often precedes larger fraud.

4️⃣ Misuse After Revocation or Death

POA automatically ends upon:

• Revocation

• Death of principal

Transactions done after termination are legally invalid but require court action to challenge.

How NRIs Can Prevent GPA Misuse

1️⃣ Grant Specific, Limited Power

Instead of general authority:

✔ Define exact powers
✔ Restrict sale authority unless absolutely necessary
✔ Limit financial transactions

Avoid blanket rights over all assets.

2️⃣ Register the Power of Attorney

Proper registration ensures:

• Legal validity

• Traceability

• Authenticity

Unregistered POA increases risk.

3️⃣ Insert Safeguard Clauses

Include:

• Mandatory prior written consent for sale

• Obligation to share transaction copies

• Defined validity period

Clear drafting reduces ambiguity.

4️⃣ Conduct Periodic Legal Review

Regular checks of:

• Encumbrance certificate

• Revenue records

• Court filings

Early detection prevents escalation.

5️⃣ Revoke When No Longer Required

If purpose is fulfilled:

• Execute formal revocation deed

• Notify concerned authorities

• Inform Sub-Registrar

Passive continuation creates vulnerability.

Legal Position on GPA Transfers

The Supreme Court in Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana clarified that GPA alone does not transfer ownership. However, misuse of GPA to execute sale deeds still creates litigation and enforcement challenges.

Prevention is better than cancellation proceedings.

What If GPA Is Already Misused?

Possible remedies include:

• Civil suit for cancellation of sale deed

• Injunction against further transfer

• Criminal complaint for fraud or cheating

• Recovery proceedings

Speed is crucial in such cases.

FAQs

Is it safe to give GPA to relatives?
Yes, but only with limited and clearly defined powers.

Can GPA holder sell property without consent?
Only if such authority is explicitly granted.

Can I revoke POA from abroad?
Yes, through proper legal procedure.

How often should records be verified?
At least annually or upon suspicion.

Final Legal Insight

For NRIs, Power of Attorney is a practical necessity — but also a legal risk if improperly structured. Careful drafting, limited authority, and periodic monitoring are essential to protect high-value property from misuse and long-term litigation.

Disclaimer

This article is for general informational purposes only and does not constitute legal advice. GPA-related disputes depend on specific documentation and factual circumstances. Professional legal consultation is recommended before executing or revoking any Power of Attorney.