POA DEMYSTIFIED

A power of attorney is nothing but a document showing that an agent has been appointed to act on one’s behalf for certain purposes. The law relating to agency is governed by the Indian Contract Act.
 

A general power of attorney deals with all types of powers including the power to operate bank accounts, sell property, vote in meetings and manage the affairs of the person executing the power of attorney. A specific power of attorney is given for a single transaction.

The Indian Registration Act does not list a power of attorney as a compulsorily registerable document. However, it states that if a power of attorney holder presents a document for registration as an agent of another, then it should have been authenticated. This means that the executants should have got the power of attorney authenticated (there is hardly any difference between authentication and registration for practical purposes) in the sub-registrar’s office which has jurisdiction over where he resides. If it is executed abroad, then it should be attested by a magistrate or the Indian Consulate in that country.

In practice, a power of attorney received from abroad may sometimes be sent for adjudication to the district registrar’s office prior to acceptance for registration, to determine if the proper stamp duty has been paid on it.

The courts have held that if a sale deed is signed by the power of attorney holder on behalf of the owner and presented for registration, the power of attorney need not be authenticated (registered) if the sale deed has been signed by the owner and presented for registration by the power of attorney holder, then the power of attorney should be registered.

There is an understandable apprehension about the sale of immovable properties by the power of attorney holders. To prevent fraud, it is essential to verify if the owner is alive, if he has been paid in full consideration due to him and if the power of attorney has been coupled with an agreement of sale. It is also prudent to verify if the power of attorney has been revoked or not. It is well settled law that a power of attorney given for consideration, and in consequence of which the attorney has done some further act, cannot be revoked.
Normally a person, who has been appointed as an agent, cannot delegate his authority, unless it is customary to do so. A clause regarding substitution of the power has to be available in the power of attorney before a substitute agent can act.
Sometimes an agent acts in a way which exceeds his authority or in ambiguous situations. In such an event, the person on whose behalf the agent has acted may ratify the act subsequently. The ratification by the principal may be implicit or explicit. Ratification means that the act done will be deemed to have been done with the authority of the principal.

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