Introduction:
In layman’s terms, a power of attorney can be defined as a legal document that enables another person to act on the behalf of another as a legal representative.
In this modern-day, with the quick-paced and hectic ways of this world, it has become ever more important for busy people and businesses to sign and be present for entering into new contracts, agreements, etc. In order to help reduce this workload a provision through a document known as power of attorney has been created which enables other people to help represent other people or businesses legally while dealing with such scenarios.
Definition and Laws Governing it
Powers of attorney were introduced and governed by the Power of Attorney Act, 1882 which defines a power of attorney as “any instruments empowering a specified person to act for and in the name of the person executing it”.
The definition of power of attorney can also be found in The Indian Stamps Act.
Additionally, the relationship between the agent and principle can be defined as the same as in the Indian Contract Act which states that an “agent” is a person employed to do any act for another or to represent another in dealings with third persons. The person for whom such act is done, or who is so represented, is called the “principal. It must be noted that this also means that any actions done by the agent can be considered as actions done by the principal himself considering it was within the scope of the POA.
[i]This can be seen in the case ofTmt. Kasthuri Radhakrishnan & Ors. v. M. Chinniyan & Anr. (2016), wherein the Apex Court stated 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 acting 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.
In regards to the legal identifications, the person who gives out the instrument is known as the donner of the principal or donor, and the person who accepts the responsibility is known as the agent or donee.
Types of Power of Attorneys
Power of Attorney on the whole can be divided into the following types being:
General Power of Attorney
In this type of power of attorney the agent is granted nearly unlimited powers and is there is no single specified task that he can only do. In this deed there will be no mention of a specified task that he must perform, therefore he can act on behalf of the agent for a wide variety of tasks. In such agreements, the degree of trust between the principal and agent must be extremely high.
Specific Power of Attorney
In such a power of attorney, the agent can only act on behalf of the principal for a certain specified task mentioned in the attorney dude. Anything that is not specified in the deed will be outside the scope of the agent and he will not be allowed to represent the principal for such issues.
Durable Power of Attorney
If an attorney deed mentions specifically that the deed will last past the death of the principal then this deed is considered to be a Durable Power of Attorney as the agent represents the principal even after his death.
Non-Durable Power of Attorney
On the other hand, if there is no specific mention of the continuity of the deed the attorney deed will be considered as a non-durable one. In this case, as soon as the principal dies the deed will be considered invalid.
Registration of Power of Attorney
Though it is not compulsory for a POA to be registered, when it involves cases involving the transfer of immovable property as per section 53A of the Transfer of Property Act, 1882 registration is a must. This has further been demonstrated and made clear in the case of The Supreme Court in the Syed Abdul Khader Vs. Rami Reddy and others. [ii]
For a power of attorney to be considered as legal evidence or a legal document in such cases involving immovable property, it must be registered. To do so after the drafting of an attorney deed, said deed as per Section 85 of The Indian evidence act must be executed before, and authenticated by a Notary Public, or any Court, Judge, Magistrate [Indian] Consul or Vice-Consul, or representative of the Central Government, was so executed and authenticated.”
Necessities for Power of Attorney
Similar to all other legal documents, the power of attorney has certain necessities that make them a power of Attorney. These include:
- The name, date, and address of the principal.
- The name of the person to who the authority is being granted, i.e the name of the agent.
- The reason for granting or authority granted by the power of attorney must be legal.
- The date and place in which the attorney deed is made and from when it’s will begin its legal inception.
- The date of termination of the deed. If not mentioned it will be considered as non-durable unless other wised mentioned.
- If the attorney deed is a general one the areas and acts that the agent is acting on behalf of the principal must be referred to. Additionally, even within general POA’s restrictions can be placed such as the attorney can only sell-buy property or shares etc but cannot sell it.
- In the case of special attorney deeds then the exact working of the agent and his responsibilities for each task must be specifically mentioned along with its time duration.
Power of Attorney for Indian Nations who live Abroad (NRI’S)
Just like Indians within the country use the power of attorney to help give out responsibility to agents to act on their behest, Indians who live abroad and own things like land, shares, etc in Indian too may want to transfer responsibility to an agent to act on his behalf. To enable the Indian Citizens living abroad post drafting an attorney deed with all the various requirements can register said attorney deed in their nearest Indian Counsel. Just like a judge or Notary can verify such deeds in India, in a similar fashion Indian Counsels in the embassy or vice counsels can verify and authenticate the POA’S hence registering them.
This now enables NRI’S to essentially then enable agents within India who could be their friends, relatives lawyers, etc to act on their behalf to perform various tasks.
Revocation of Power of Attorney
Just as easily as a POA can be created it can be revocated by the principal as per the provisions of section 201 of the Indian Contracts Act which states:
Under section 201 of the Indian Contract Act, an agency can be terminated when the principal revoked his/her authority or when the agent renounces his/her business of the agency. It also mentions that an agency can be revoked if the principal or agent dies or becomes of unsound mind.
An exception to this which is shown in Section 202 states that:
Section 202 of the Indian Contract Act talks about situations when the agency cannot be revoked ‘Where the agent has himself an interest in the property which forms the subject matter of the agency, the agency cannot, in the absence of an express contract, be terminated to the prejudice of such interest.
Therefore section 202 provides a possible safeguard against the agents leaving said POA’S due to a prejudiced interest in the specific subject matter as per the POA. For eg. Possibly the property the principal wants to buy as per the POA, etc.
Conclusion
To conclude a Power of Attorney is a legal document that once drafted and registered as per the norms can enable people and organizations to reduce individual workloads on them by enabling other people to act on behalf of them. Additionally, it helps promote cross-national trade and management of assets which makes the lives of various Indians inside and outside the country far easier. Looking at this we can see that The Power of Attorney deed is a revolutionary legal tool that has changed the context of how people and Organisations manage their assets and conduct their businesses.
References:
[i] Kasthuri Radhakrishnan and Ors. vs. M. Chinniyan and Ors MANU/SC/0075/2016
[ii] Supreme Court in the Syed Abdul Khader Vs. Rami Reddy and others AIR 1979 SC 553
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