Power of
Attorney is one of the documents which is being executed most extensively pertaining
to the transactions involving transfer of properties, irrespective of modes of
conveyance.The main reason being inability of the person, either the
transferee or the transferor to be present at different place at the same time.
In order to complete such transactions, in his/her absence, General Power of
Attorney is executed, authorizing another person to do acts or certain acts on
his/her behalf. Such an instrument empowering a specified person to perform
such act in his absence is termed as General Power of Attorney, as envisaged in
the Power of Attorney Act 1882.
The
instrument of Power of Attorney is based on the concept of Law of Agency,
wherein the Principal,i.e.,the person who executes Power of Attorney,
authorizes his Agent, i.e., the person in whose favor such Power of Attorney is
executed, to do all such necessary acts specified in the Power of Attorney on
his behalf and further ratifies such acts of the Agent and the said concept has
been recognized under the statute thereby giving legal sanctity.
Competency of the Parties:
The
following are the mandatory requirements before executing Power of Attorney:
Majors: It is necessary that both the
Principal and the Agent must have attained the age of majority because contract
entered between two parties, wherein, either of the one is a minor, is not
recognized under Law. Hence, it is very important that both the parties should
be above 18 years of age.
Sound Mind: It is also important that both the Principal and the Agent must be of the sound mind since the contract with the
person of unsound mind does not bind the parties to such a contract.
Types of Power of Attorney:
There are
two types of Power of Attorney. They are:
· General
Power of Attorney: General Power of Attorney gives wide power to the agent to
do various acts on behalf of the Principal, without any specifications.
Special
Power of Attorney: Special Power of Attorney is executed in those cases wherein
the agent is empowered to do such acts specified in such Power of Attorney. In this kind of Power of Attorney, the power given to the agent will be revoked as
soon as that particular act for which the power of attorney is executed, is
performed and once such an act is completed, Power of Attorney does not
subsist.
Sub-delegation of power:
The general
principal is that an agent can neither sub-delegate his powers to a Sub-agent
nor can appoint another power of attorney. The said principle is well expressed
in Latin maxim “Delegate non protest delegate”, which means a person who is
delegated with certain powers cannot delegate such powers to a third person.
But, section 190 of the Indian Contract Act provides certain exceptions,
wherein the agent can appoint sub-agent.However, such sub-delegation must be done in connivance with the Principal, who has to ratify all the acts done by
the agent on his behalf. The following are the circumstances under which
Sub-delegation is permitted:
The
nature, custom of the trade is such that it requires the appointment of
sub-agents.
· The
recitals in such power of attorney authorizes the agent to sub-delegate his
powers to another agent.
Registration and Notarization:
Under
Section 17 of the Registration Act, if any transaction involves transfer,
assignment or creation of right, title and interest over the immovable property
and the value of such property is Rs.100 or more, then registration of such
documents is mandatory.
As regards
execution of Power of Attorney, if the principle assigns right, title and
interest over the immovable property in favor
of the agent and authorize the agent to execute any document on his behalf, in
such case registration of the power of attorney is preferable.However, if the
agent is delegated with the powers which does not involve any kind of assignment
or transfer of interest over the immovable property, then power of attorney notarized before Notary Public or even before the Magistrate, is considered to
be authenticate documents.
Thus for
example, if a person executes Power of Attorney, authorizing the Power of
Attorney Holder to execute sale deed on his behalf before the proper
registering officer, then it is advisable to get such power of attorney
registered. On the other hand, if Power of Attorney is executed, authorizing
the power of attorney holder to prosecute or defend the suit, then GPA can be
notarized before Notary Public. However, the Court shall presume that a power
of attorney executed before and authenticated by Notary public or any Court,
Judge, Magistrate,Indian Consul or Vice-consul or Representative of the
Central Government was so executed and authenticated.If the Power of Attorney
is not signed and sealed as required under law, it is nothing more than a waste
paper.
In either of
the case, each page of the document, whether registered or notarized, has to
bear official stamp of the Sub-Registrar office or Notary Public and must
disclose the registration number, Book number and signature of the
Sub-Registrar or Notary. If the same is notarized, then, apart from the above,
appropriate Notary Stamp has to be affixed.
Outside India:Section 85 of the Indian Evidence
Act applies equally to documents authenticated by Notaries Public of other
countries. However, the same has to be done by the designated Officers. So any
power of attorney executed outside India shall be authenticated by notary of such country or Indian Consul/Embassy.
Stamp Duty:Power of attorney, executed and notarized
in any country in favour of Power of Attorney Holder, residing in India, has to
be duly stamped within four months from the date of receipt of the same and the
stamp duty in such case has to be at the District Registrar’s office. However,
if the same is executed in India, the same has to be executed on the document
sheet, duly stamped.Stamp duty in either of the case will be Rs.100- if the
same is executed in favour of one to five of them and if power of attorney is
given to more than five persons, then the actual stamp duty payable is Rs.200/-.
Cancellation of G.P.A:Power of Attorney can be cancelled
by either of the parties to the said contract. However, the same has to be done
by giving proper notice to the other, clearly mentioning the intention of the
person to revoke the said Power of Attorney and notice to that effect has to be
given to the public. However,the Principal cannot cancel the agency after the
agent exercises his powers partially. If the power of attorney is given only
for the specific purpose and that purpose is fulfilled or if either of them
dies or becomes unsound,then such an instrument automatically gets cancelled.
Nevertheless, proper notice is a must.
If the agent himself has any interest in the property which is the subject matter of the
agency, then the same cannot be cancelled unless the agent agrees.
Representation of Owner:In Bangalore, there are many
instances wherein it is seen that the Power of Attorney Holder, in his
individual capacity, representing himself as the owner instead of the actual
owner will convey immovable property, which act does not confer any kind of
right over the purchasers since the document itself is void and not binding on
the parties. So it is very important to verify as to whether the conveyance has
been made by the GPA Holder, duly representing his Principal/Owner.
In the
recent times, with the growing boom of real estate in Bangalore, the instrument
of General Power of Attorney is playing a major role, not only in regard to
sale or purchase of the property, but also in all other related fields.
However,abundant caution has to be taken at the time of executing Power of
Attorney and also cancellation of the same because the same can also be used as
a weapon involving acts of fraud or conspiracy to misguide and cheat public.
For more details,
No comments:
Post a Comment