The Power of Attorney
'' Inasmuch as human being becomes busier, it becomes more necessary for him to depend on others for getting his things done. Owing to this reason, the power of attorney is now playing vital role.''
While the main concern of Indian philosophy is to analyse the fundamental concepts of ethics, religion, epistemology and metaphysics, its ultimate concern is the social well-being of individuals.
In the recent computer era, where commerce and industry assured large role to play , the need for entering into contracts of agreements in relation to business and other transactions become a common and primary feature of daily life. Because of human being became busier, it became more necessary for him to depend on others for getting his things done. The hectic activities of the businessmen and industrialists have made the execution of power of attorney for delegating his functions. A "power of attorney" is a legal instrument whereby one person gives another person the authority to act on his or her behalf as his legal representative, and to make binding legal and financial decisions on your behalf.
Defining A Power Of Attorney
In Blacks dictionary it is described as the instrument by which a person is authorized to act as an agent of the granting it. It is pertinent to mention here a person need not be a lawyer to hold a Power of Attorney as an agent for someone else. In Strouds judicial dictionary "power of attorney is defined extensively as an authority whereby one is set in the stead or place of another to act for him".
Power of Attorney is a document of agency whereby the principal appoints an agent to do and execute certain acts or deeds on his behalf. Various can be found in different enactments like according to the Bombay Stamp Act it is defined as "any instrument empowering a person to act for and in the name of the person executing it and includes an instrument by which a person a not being a legal practitioner is authorized to appear on behalf of any party in proceedings before any court tribunal or authority"
The Indian Stamps Act defines it "any instrument empowering any specified person to act for and in the name of the person executing it"
Despite there is a specific act pertaining to Power of attorney but it is a very precise and brief one , the basic principles of these document are governed by the law of agency as provided for in the Indian Contract Act. A power of attorney may be of two types-
1) General 2) Specific-
The test to determine under which category a given document falls is as to what is the subject matter in respect of which power is given and if it is restricted to some specific matter it is specific else it is general.
Construction of a power of attorney- There are two main rules in construing a power of attorney
.1) The operative part of the deed is controlled by the recitals wherever there is any ambiguity
2) Where authority is given to do particular acts followed by general words the general words are restricted to what is necessary for the performance of the particular acts
The Power of Attorney can be effective immediately upon signing or only upon disability.
Somme illustrations of legal aspects containing in the Power of Attorney:
1. To enter into contacts,
2. Perform any contract, agreement, writing, or thing
3. To make, sign, execute, and deliver, acknowledge any contract, agreement,
The Power Of Attorney In Real Estate Field
1. To sell, exchange, lease, collect rents, grant, bargain, or borrow and mortgage .
2. To execute all deeds, bonds, contracts, mortgages, notes, checks, drafts, money orders;
3. To manage, compromise, settle, and adjust all matters relating to real estate;
Bank Accounts, Certificates Of Deposit, Money Market Accounts
1. To add to or withdraw any amounts from any of my bank accounts, Certificates of Deposit, Money Market Accounts, etc.
2. To make, execute, endorse, accept and deliver any and all cheques and drafts
3. Execute or release such deeds of trust or other security agreements as may be necessary
4. Deposit and withdraw fundsAcquire and redeem certificates of deposit, in banks, savings and loan
Tax Returns, Insurance And Other Documents
1. To file, sign all tax returns, insurance forms and any other documents
2. To represent in all matters concerning the foregoing.
Stocks, Bonds, And Securities
1. To sell any and all shares of stocks, bonds, or other securities
2. To make, execute, and deliver any assignment, or assignments, of any such shares of stock, bonds, or other securities.
Kinds Of Power Of Attorney
Every act performed by the agent within the authority of the Power of Attorney is legally binding upon the persons granting it. A power of attorney must be given only to a trustworthy person, and only when it is absolutely necessary. The person who empowers is the Principal and the person to whom the power is conferred is the Agent.
There are two kinds of power of attorney viz., "General Power of Attorney" and "Special (or limited) Power of Attorney" .
What is a General Power of Attorney ?
1. The principal empowers the agent with the right to carry out all legal acts on his behalf without restricting it to a particular transaction or act,
2. Gives the agent very broad powers to act on behalf of the Principal
What is a Special Power of Attorney?:
1. The authority is restricted to act only on certain matters or only a particular kind of transaction or to carry out a specific legal transaction for the Principal.
2. The agent's power of attorney expires on the completion of the transaction
The Basic Principles To Remember:
1. The general rule of power of attorney is that it should be strictly construed.
2. Unless an express power is conferred on an agent to enter into contracts of guarantees on behalf of his principal or to execute or negotiate , negotiable instruments for his principal jointly with others
3. An agent cannot by his acts bind the principal to a larger extent than he is empowered to do under the power of attorney.
4. Fraud by the power agent does not bind the principal. He cannot be sued or otherwise held responsible for fraud by the agent
5. If the power does not authorize the agent to carry on a business except with limitations any act done by him in excess of such power will not bind the principal.
6. For example power to dispose of property does not confer a power to mortgage the property.
7. Power to manage immoveable property cannot permit principal's ornaments which are a moveable proper .
Important Rules For Construction Of Power Of Attorney
1. The operative part of the deed is controlled by the recitals
2. Where authority is given to do a particular act, followed by general words, the general words are restricted to do what is necessary for the proper performance of the particular acts.
3. General words do not confer general powers, but are limited to the purpose for which the authority is given, and are construed as enlarging the special powers only when necessary for that purpose
4. The deed must be construed so as to include all powers necessary for its execution.
Registration Of Power-Of-Attorney
1. Registration of power of attorney is not compulsory. it is optional
2. In India, where the Registration Act, 1908, is in force, the Power of Attorney should be authenticated by a Sub Registrar only, (Whenever a person signs the document and his attorney presents/ admits execution).
3. In other areas, attestation should be by a Notary or diplomatic agents
4. In case an attorney under a valid Power of Attorney himself signs a document, he may, as an executing (signing) party present/admit execution of a document though it is attested by a Notary, unless the text of the power specifically excludes such powers
5. Foreign Power of Attorney should be got stamped by the Collector after its receipt in India within prescribed time of 3 months
6. Registration of power of attorney authenticates the deed of power of attorney
7. Power of Attorney shall be attested by two or more adult independent witnesses who are of sound mind
8. If a power of attorney is in respect of an immovable property of value more than Rs100 it must be registered.
Revocation Of Power Of Attorney
Power of Attorney can be revoked in the following cases,in case of :
1. Revoked by the principal himself
2. The principal dies or becomes insane or becomes bankrupt
3. The business for which the agent was appointed is over
4. Mutually agreed upon by the principal and agent
5. The right under the power of attorney is renounced by the agent
Revocation Of General Power Of Attorney
According to the Judicial perception, under the following circumstances, the power of attorney can be revoked.
If the power given to the attorney is coupled with an interest it is irrevocable.
To decide whether a given power is coupled with interest or not regards are to be given to the facts of each case and the wordings of the instrument itself.
The right of an agent to remuneration though stipulated in the form of property to be produced by exercise of power is not an interest in the required sense.
If the power is irrevocable as per the test laid down the parties are nevertheless free to make it revocable by an express stipulation to the contrary.
If the power is revocable than the parties cannot make it irrevocable merely by writing that the instrument is irrevocable.
The position in our country is the same as that in England.
A power of attorney is automatically terminated if- One of the parties to the instrument dies or becomes insane, The principal becomes insolvent or bankrupt, any specific condition in the instrument is breached, the business comes to an end.
" Courts refer to Indian Contract Act provisions to determine this question.
Relevant Case-Law- Table-I
REVOCATION OF GENERAL POWER OF ATTORNEY: CASE-LAW
REGISTRATION OF GENERAL POWER OF ATTORNEY: CASE-LAW
1. Avm.K.Shanmugam vs V.Shanthi; Decided on 5 February, 2008
Madras High Court
2.P.V.G.K.S.Sastry, S/O. ... vs The State Of Andhra Pradesh ...; Decided on 21 July, 2005
Andhra Pradesh High Court
3.Badal & Ors. vs M/S Niranjan Proptech & Ors.; Decided on 18 March, 2009
Delhi High Court
4.Kartar Singh (Dead) Through Lrs. vs Jaswant Singh (Dead) Through Lrs.; Decided on 28 April, 2004
Punjab-Haryana High Court
(2005) 141 PLR 78
5.Smt. Rajwanti And Anr. . vs Sh. Kishan Chand Shehrawat; Decided on 20 May, 2009
Delhi High Court
6.Nagaraj vs Mohan; Decided on 11 October, 1985
Karnataka High Court.
ILR 1986 KAR 236
7.Pritpal Singh Kohli vs Surjit Kaur And Anr.; Decided on 23 April, 2001
Delhi High Court
2001 IVAD Delhi 16
8.Shikha Properties(P) Limited vs S.Bhagwant Singh & Ors.; Decided on 9 July, 1998
Delhi High Court
1998 VAD Delhi 28
9.Smt. Vasanthi D/O B.U. Shetty And ... vs Smt. Jayashree V. Shetty W/O K. ...; Decided on 5 October, 2007
Karnataka High Court
10.Sardarni Raminder Sarup Singh vs Govinder Singh; Decided on 25 November, 1993
Delhi High Court
1. Satyawan vs Govt. Of Nct Of Delhi And Ors.
115 (2004) DLT 424
2. Shri. K.P.Balaji vs Govt. Of Nct Of Delhi,...; decided on 6 January, 2009;
Central Information Commission
3. Syed Abdulkhader vs Rami Reddy & Ors;
1979 AIR 553
4. Sakinabai W/O. Hatimbhai vs Sakinabai W/O. Ibrahimbhai Bohra ... ;
AIR 1963 MP 286
5. Basant Nahata vs The State Of Rajasthan And Ors.
2001 (1) WLC 433
6. Mahendra Investment Advisors ... vs Md.Abdul Asad Aleem And Others ; decided on 13 November, 2008 ;
Andhra Pradesh High Court
7. Smt. Kailash Kumari vs Smt. Rajni Monga And Ors. Decided on 20 August, 2010
Delhi High Court
8. Ved Parkash Gupta vs Lilu Ram Jangra And Anr. decided on 4 April, 2002; Punjab-Haryana High Court.
9. Gursharan Singh vs State Of Punjab; decided on 28 August, 2006
Punjab-Haryana High Court.
Relevant Case-Law- Table-II
Payment of stamp duty on power of attorney: Case-Law
Definition of power of attorney: Case-Law
Specific power of attorney: Case-Law
General power of attroney: Case-Law
1. Institute Of Chartered ... vs Union Of India (Uoi) And Anr.
2002 256 ITR 98 Ker
2. Kuldip Kaur And Ors. vs Prakash Chand Khurana And Ors.
AIR 1983 Delhi 328
3. Institute Of Chartered ... vs Union Of India & Anr.
(2002) 174 CTR Ker 250
4. Satyawan vs Govt. Of Nct Of Delhi And Ors.
115 (2004) DLT 424
5. Sanjay Sharma vs State Of U.P. Through Collector; decided on 2 August, 2010; Allahabad High Court.
6. Anitha Rajan, W/O.Angoor Rajan vs The Revenue Divisional Officer ; decided on 23 February, 2010 ; Kerala High Court.
1. Hormusji K. Bhabha' case
(1934) 36 BOMLR 658
2. In Re: Arthur Paul Benthall' s case:
AIR 1952 Cal 815
3. Satnam Channan vs Darshan Singh;
(2006) 143 PLR 459
4. Manoharan vs Velu And Another
1998 (2) CTC 72
5. Mahendra Kumar vs Armstrong And Anr.
2005 (2) ALD Cri 21
6. K.C.Bohra vs Sri Durga Lodge Pvt. Ltd ; decided on 27 June, 2008 Madras High Court
7. Anitha Rajan, W/O.Angoor Rajan vs The Revenue Divisional Officer decided on 23 February, 2010
Kerala High Court
8. Ramkaran R. Rajput vs Vijay Co-Op. Bank Ltd. And Ors. (1988) 2 GLR 1451
1. Svenska Handelsbanken vs Indian Charge Chrome Ltd;1994 SCR (1) 261
2. Pearson Education Inc. (Formerly ... vs Prentice-Hall Of India Pvt. Ltd., ... 2004 56 SCL 365 CLB
3. Corporation Bank vs Lalitha H. Holla And Others
1997 88 CompCas 403 Kar
4. Bharatbhai K. Patel vs C.L. Verma (Since Decd.) Through ...2002 CriLJ 3469 .
5. Bcpp Mazdoor Sangh & Anr vs N.T.P.C. & Ors; Supreme Court of India.
6. Killick Nixon Limited And Others vs Bank Of India And Others
1983 (2) BomCR 631
7. Manubhai Khandubhai Naik vs Sumantrai Ranchhodji Naik Since ..(2004) 1 GLR 488 .
8. Chami Narayanan vs V.R. Krishna Iyer And Ors.
AIR 1998 Ker 365 .
9. A.S. Shaik Fathima And Ors. vs Omer Cloth Store And Ors.AIR 1986 Mad 90 .
10. Manmohan Singh Dhaliwal vs Gurbax Singh Arora And Ors.94 (2001) DLT 820
1. Gouni Satya Reddi vs Govt. Of Andhra Pradesh And Ors.
AIR 2004 SC 3661
2. Badri Prasad Sadashivrao vs District Judge, Shri G.R. Kale
AIR 1964 MP 264
3. Jagdish Rai vs Makardhwaj Ram decided on 18 September, 2009 ;
Chattisgarh High Court
4. Raj Kumar vs Shri Chander Singh And Ors.
2003 (3) ARBLR 609 P H
5. Union Of India (Uoi) And Ors. vs S.M. Hussain Rasheed And Ors.
2003 (5) ALD 150
6. Potluri Saraswathi vs Vallabhaneni Veerabhadra Rao
2002 (3) ALD 690
7. Parikh Amratlal Ramanlal And Ors. vs Rami Mafatlal Girdharlal And Ors.
(1982) 2 GLR 337
8. Surender Raj Jaiswal And Ors. vs Vijaya Jaiswal
AIR 2003 AP 317
9.P.Neelakanteswaramma And Ors. vs Uppari Muthamma And Ors.
1998 (1) ALD 234
10. Tamilnad Mercantile Bank ... vs Mr. S. Radhakrishnan, Chairman ... decided on 28 September, 2005 ; Madras High Court.
11. Smt. Vasanthi D/O B.U. Shetty And ... vs Smt. Jayashree V. Shetty W/O K. ... decided on 5 October, 2007;Karnataka High Court.
12. Jeet Kumari vs Girdhari Lal
(2003) 135 PLR 605
13. Jasjit Singh Bhasin And Anr. vs State Of Punjab And Anr.
2006 CriLJ 2757
14. State Of Karnataka And Ors. vs M. Muniraju on 25 February, 2002
AIR 2002 Kant 287
The authority is restricted to act only on certain matters or only a particular kind of transaction or to carry out a specific legal transaction for the Principal. The agent's power of attorney expires on the completion of the transaction. If any fraud by the power agent does not bind the principal. He cannot be sued or otherwise held responsible for fraud by the agent. If the power does not authorize the agent to carry on a business except with limitations any act done by him in excess of such power will not bind the principal. A fortiori, an agent cannot by his acts bind the principal to a larger extent than he is empowered to do under the power of attorney.
| Posted by vswami on September 01, 2012
With a view to sharing one's own thoughts, in common interest, attention is invited to the additional viewpoints made in the published article @ (2005) (3) KLJ 17.
Also to the recent SC verdict against illegality of using the so called 'GPA' for irregularly transferring immovable property in violation of the laws on registration and stamp duty.
ref. the related Blog @ vswaminathan-swamilook. blogspot.com
this article deals with the laws relating to mergers and acquisitions in india...
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