POWER OF ATTORNEY

[Mr. M. GOVINDARAJAN]

Power of Attorney

Power of Attorney (‘PoA’ for short) is a legal document giving an attorney-in-charge or legal agent the authority to act on behalf of the principal. The attorney in charge possesses broad or limited authority to act on behalf of the principal.

Section 1A of Power of Attorney Act defines the expression ‘Power of Attorney’ as including any instrument empowering a specified person to act for and in the name of the person executing it.

Execution

Section 2 of the Act provides that the donee of a power-of-attorney may, if he thinks fit, execute or do any instrument or thing in and with his own name and signature, and his own seal, where sealing is required, by the authority of the donor of the power; and every instrument and thing so executed and done, shall be as effectual in law as if it had been executed or done by the donee of the power in the name, and with the signature and seal, of the donor thereof. This section applies to powers-of-attorney created by instruments executed either before or after this Act comes into force.

Payment by attorney

Section 3 of the Act provides that any person making or doing any payment or act in good faith, in pursuance of a power-of-attorney, shall not be liable in respect of the payment or act by reason that, before the payment or act, the donor of the power had died or become of unsound mind, or insolvent, or had revoked the power, if the fact of death, unsoundness of mind, insolvency or revocation was not, at the time of the payment or act, known to the person making or doing the same.

This section shall not affect any right against the payee of any person interested in any money so paid; and that person shall have the like remedy against the payee as he would have had against the payer, if the payment had not been made by him.

Deposits of PoA

Section 4 of the Act provides that an instrument creating a power-of-attorney, its execution being verified by affidavit, statutory declaration or other sufficient evidence, may, with the affidavit or declaration, if any, be deposited in the High Court or District Court within the local limits of whose jurisdiction the instrument may be. A separate file of instruments so deposited shall be kept; and any person may search that file, and inspect every instrument so deposited; and a certified copy thereof shall be delivered out to him on request.

A copy of an instrument so deposited may be presented at the office and may be stamped or marked as a certified copy, and, when so stamped or marked, shall become and be a certified copy. A certified copy of an instrument so deposited shall, without further proof, be sufficient evidence of the contents of the instrument and of the deposit thereof in the High Court District Court. The High Court may, from time to time, make rules for the purposes of this section, and prescribing, with the concurrence of the State Government.

PoA of married woman

Section 5 of the Act provides that a married woman of full age shall, by virtue of this Act, have power, as if she were unmarried, by a non-testamentary instrument, to appoint an attorney on her behalf, for the purpose of executing any non-testamentary instrument or doing any other act which she might herself execute or do; and the provisions of this Act, relating to instruments creating powers-of attorney, shall apply thereto.

Types of PoA

There are four types of PoA. They are-

• General Power of Attorney – in this case the Principal gives the agent power to act fully on behalf of the Principal.
• Limited or Special Power of Attorney – in this case the Principal gives the agent power to act only on a specified purpose area on a specific transaction.
• Durable Power of Attorney – in this case the duration of PoA in which the agent can act on behalf of the Principal. This PoA comes to an end when its purposes have been fulfilled.
• Medical or Health Care Power of Attorney – in this case the PoA does not immediately come into effect but rather only becomes valid after the principal is no longer of sound or conscious mind. 

Contents of PoA

The PoA shall contain the following details-

• Name of the Principal;
• Name of the Agent;
• Name of two witnesses;
• Age and address of the principal and the agent along with valid proof;
• Duration of PoA (if applicable);
• Specifications about the extent of authority given to the agent.

Registration of PoA

It is not compulsory to register a PoA. However in respect of immovable property having a value of more than ₹ 100/- it must be registered. In order for it to be legally valid, a POA must be authenticated by a sub-registrar or it must be notarized by the notary especially wherein case power to sell land is granted to the agent. Under section 48 of schedule 1 of the Indian Stamp Act, 1899, stamp duty must be paid on the power of attorney. These may be paid either by the Principal or agent.

Validity of PoA

A durable POA remains effective for a lifetime, unless it is explicitly canceled. A specific clause can be inserted in the document, stating that the representative's power would remain valid even if the principal becomes incapacitated. The original PoA or Xerox copy of PoA may be used for registration.

In AMAR NATH VERSUS GIAN CHAND AND ANR. [2022 (2) TMI 935 - SUPREME COURT], the owner of the property entered into an agreement with a person for a sale of his land in 1987. Since he was transferred out of his own place he executed a Power of Attorney for the sale which was not materialized. Therefore the original owner of the property took back the original Power of Attorney and informed that the Power of Attorney stood terminated. The Power of Attorney holder later on got the copy of Power of Attorney and sold the land to the original buyer for the lesser rate. The Himachal High Court cancelled the registration of the sale on the ground that the original power of Attorney has not been produced. The High Court restored the property to the original land owner. Against the order appeal was filed before the Supreme Court. The Supreme Court held that the Power of Attorney can sell the property and sell the same merely by producing the copy of the power of Attorney. The Supreme Court further held that the original Power of Attorney is not mandatory for registration of the sale. If the land owner did not cancel the Power of Attorney without entering into a written agreement for the cancellation of Power of Attorney, it will allow the Power of Attorney holder to sell the property or land.