"If GPA transactions were allowed to go on, it would lead to criminalisation of real estate transactions, besides allowing people to stash away their undisclosed income and assets," a bench headed by Justice R.V. Raveendran said.

The apex court requested Solicitor General Gopal Subramanium to appear before it on the next date (in August) to give suggestions on behalf of the Centre.

The direction came on a petition filed by Suraj Lamp and Industries (P) Ltd  that was allegedly cheated by some persons of a two-acre land in Haryana's Gurgaon district. One of those allegedly involved in the case was a former state minister and his father.

In a GPA transaction, a person surrenders all his rights to another person (under the General Power of Attorney) who, in turn, executes sale of the property without paying any stamp duty/registration fees to the government.

Such transactions are only by way of mutual agreements without getting the sale deeds registered as required under the law, often to avoid payment of registration fees to the government. Many of these transactions end up in litigation as those claiming GPA rights cheat purchasers.

But the SC said: "Whatever be the intention, the consequences are disturbing and far-reaching, adversely affecting the economy, civil society and law and order."

Source: Hindustan Times`General power of attorney bad for economy'