‘Qui facit per alium, facit per se’
A Power of Attorney is a legal document that allows a person to act as the legal agent of another and perform certain tasks on behalf of the person. The agent acquires all or limited authority to make legal decisions for property, finances or medical care of person. Generally, a family member, spouse or friend is appointed as an agent through a Power of Attorney to make decisions in case of disability or illness. According to Section 1 A of the Powers of Attorney Act, 1882, a power of attorney includes any instrument empowering a specified person to act for and in the name of the person executing it.
In Tmt. Kasthuri Radhakrishnan & ors. V/s M. Chinniyan & anr. (Civil Appeal No. 5158 of 2009), wherein the Apex Court observed that “the law relating to power of attorney is governed by the provisions of the Power of Attorney Act, 1982. It is well settled therein that an agent under a power of attorney always acts, as a general rule, in the name of his principal. Any document executed or thing done by an agent on the strength of power of attorney is as effective as if executed or done in the name of principal, i.e., by the principal himself. An agent, therefore, always acts on behalf of the principal and exercises only those powers, which are given to him in the power of attorney by the principal. Any act or thing done by the agent on the strength of power of attorney is, therefore, never construed or/and treated to have been done by the agent in his personal capacity so as to create any right in his favour but is always construed as having done by the principal himself. An agent, therefore, never gets any personal benefit of any nature.”
In Suraj Lamp and Industries Private Limited V/s State of Haryana & Anr. (2012) 1 SCC 656 held that, “A power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property. The power of attorney is creation of an agency whereby the grantor authorises the grantee to do the acts specified therein, on behalf of grantor, which when executed will be binding on the grantor as if done by him (see Section 1-A and Section 2 of the Powers of Attorney Act, 1882). It is revocable or terminable at any time unless it is made irrevocable in a manner known to law. Even an irrevocable attorney does not have the effect of transferring title to the grantee.”
Types of Power of Attorney:
A Power of Attorney is either a General Power of Attorney or Special Power of Attorney.
General Power of Attorney: It gives broad legal powers to the agent and there is no specific or limited purpose mentioned in the document. The agent can act on behalf of the person for numerous purposes and represent the principal in legal matters. However, the principal has the power to put certain restrictions on the power of agent by including a clause in General Power of Attorney.
Special Power of Attorney: It enables the agent to act on only specific tasks on behalf of the principal. The powers of an agent are limited and no act can be performed beyond the prescribed limits in the document. The Special Power of Attorney is commonly used to perform certain business operations, banking operations, sale or purchase, taxation and court matters. If an agent performs any act beyond the limits of Special Power of Attorney, the principal cannot be made legally bound by it.
Registration of Power of Attorney:
Under the Indian Registration Act, registration of a General Power of Attorney is not mandatory but it is highly recommended to get the Power of Attorney notarised in the presence of 2 witnesses. However, if the purpose of creating the Power of Attorney involves an immovable property, it is compulsory to get the Power of Attorney registered with the office of Sub-Registrar which has the jurisdiction over the area where the principal resides. Stamp duty needs to be paid for registration of the Power of Attorney and for it legally acceptable as evidence before the court.
In case of non-payment of stamp duty, Power of Attorney cannot be used as evidence in case of legal conflict and the person executing the document can be fined up to 10 times of the original stamp duty.
The registration of the Power of Attorney includes the following formalities:
- Drafting of the Power of Attorney.
- Submitting the Power of Attorney with the Sub-Registrar.
- Attaching the supporting documents with the Power of Attorney.
- Attesting the Power of Attorney before the Registrar.
- Attesting of the Power of Attorney by 2 witnesses.
Documents required for registration:
- Identification proof such as Adhaar Card, Votor ID card, Driving licence etc.
- Residence proof of parties.
- Passport size photographs of parties.
- Electricity bill or tax receipt of the property if Power of Attorney is related to some property.
Power of Attorney by NRIs in India:
It has been made mandatory for NRIs to get their Power of Attorney registered, especially for property matters. For NRIs residing in abroad, it is requisite to get the Power of Attorney attested by Indian consulate in the country and use the Power of Attorney within 3 months from the date of its execution. NRI Power of Attorney can be executed abroad for sale-purchase of property in India, banking purposes, investment and rent requirements etc.
NRI Power of Attorney must be executed on a stamp paper as applicable in the country in which it is executed and the signature of the person making the Power of Attorney must be authenticated by the Indian Embassy in the country.
Revocation of Power of Attorney:
A Power of Attorney may be revoked or cancelled if the purpose of executing the Power of Attorney has been completed. If the principal thinks that the agent is misusing the power granted to him or is unable to properly discharge the duties assigned to him, or if the principal thinks that now he is in a position to take care of his assets in these circumstances he has the right to revoke the Power of Attorney.
A Power of Attorney is cancelled by executing a legal document called the Revocation of Power of Attorney Deed. It is a legal document which lays down the facts that the Power of Attorney must be cancelled and the powers of the principal must now be restored. If the Power of Attorney was registered or notarised, the revocation deed must also be registered with the Sub-Registrar. Also, the representative and the parties concerned need to be duly informed about the cancellation of the Power of Attorney. If interests of a reasonably large number of people are involved, it is recommended that a notice to be published in a newspaper.
A notice about the revocation of the Power of Attorney could also be posted on the property where it can be visible to the general public. In Seth Loon Karan Sethiya V/s Ivan E. John And Ors. (AIR 1969 SC 73), the Hon’ble Supreme Court has held that where agency is for valuable consideration, the authority cannot be revoked. Such power of attorney operates even after the death of executant.
Establishing Power of Attorney is very cheap a small paperwork is required which contains the specific work provided by the principal to the agent in a very easy language which can be understood by both the principal as well as the agent. As per Section 14 of Notaries Act, 1952 the Power of Attorney be executed abroad can be effective in India but it is advisable to everyone whoever is executing it abroad shall take proper care while executing Power of Attorney because it is an important legal document which transfers the decision making power of principal to the agent.
Associate at Aggarwals & Associates, S.A.S. Nagar, Mohali.