#Loan Security

The Supreme Court ruled that General Powers of Attorney (GPAs) executed as loan security do not transfer property title unless the lender proves the transaction was not a sham. The appellant’s failure to establish repayment or fraudulent intent led to dismissal, reinforcing strict evidentiary standards in fiduciary disputes.

The Andhra Pradesh High Court has ruled that a document labeled as a sale agreement, but executed solely as security for a loan, does not create an enforceable contract of sale under Section 53-A of the Transfer of Property Act. Plaintiffs are restricted to a money decree with interest, not specific performance - a critical clarification for lenders and borrowers using conditional sale deeds as collateral.