There were two aspects of the issue for which the Supreme Court set the law. The first point concerned whether the granting of ownership for development purposes could be considered a capital gain under an unregord joint development agreement. The Supreme Court, after referring to the amendment to the Registration Act of 1908, categorically stated that an unregant agreement did not fall under Section 53A of the Transfer of Property Act of 1908. It should be noted that the power of attorney issued without consideration may be revoked at any time by the person granting it. However, a power of attorney issued under a contract to carry out contractual obligations would constitute a breach of that contract in the event of revocation. In such cases, the developer could request a specific performance of the landowner`s obligation to transfer the land, either by filing the sale himself for the benefit of the developer or his candidate (as stipulated in the development agreement), or by giving the developer the power to do so on his behalf, as stipulated in the development contract. It is also important to note that if the developer violates the terms of the development contract, the owner of the land would have the right to revoke the power of attorney. With respect to development agreements, the landowner receives the land that is developed by a real estate developer for a fixed consideration. In these agreements, the only obligation for the developer is to open up the land and return the land to the landowner. In other words, the developer, which is similar to a contractor, is only paid for the services provided.
The partial execution of an agreement not registered by the owner by granting the property for limited purposes to the operation would not amount to a transfer and would therefore not constitute a capital gain. This means that if the owner still owns the property throughout the development of the property and does not seek to transfer similar rights to the developer`s property, there has been no transfer that has led to capital gains. In the scenarios of joint development rights agreements, the landowner, along with the operating rights, grants the developer a licence to enter the land for development. Permission/authority to enter the land is generally granted by a mandate provided by the developer, which authorizes the developer to develop the land, apply for permissions for the development of the land, carry out construction work on the land, negotiate with the local authorities for all necessary permits and authorizations, obtain debts for the project by ensebirthing the land, stripping third parties for the construction activity and stripping off the project. Real estate in India has been in the headlines for years and has gone through a period of vigorous activity that has led to a “boom” that is only now beginning to be invented in a more rational growth pattern.