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DR. RAM MANOHAR LOHIYA NATIONAL LAW UNIVERSITY, LUCKNOW
ACADEMIC SESSION: 2015-
DRAFTING, PLEADING AND CONVEYANCE : FINAL DRAFT
âGENERAL POWER OF ATTORNEYâ
Submitted To: Submitted By:
Ms. Shakuntala Sangam Prachi Verma
Asstt. Professor (Law), B.A. L.L.B. (Hons.)
Dr. Ram Manohar Lohiya 6th Semester
National Law University, Roll No: 85
Lucknow. Section: B
Enrolment No.: 130101084
TABLE OF CONTENTS
- INTRODUCTION...........................................................................................................................
- THE LAW ON POWER OF ATTORNEY.....................................................................................
- KINDS OF POWER OF ATTORNEY...........................................................................................
- I. General Power of Attorney:......................................................................................................
- II. Special Power of Attorney:.....................................................................................................
- III. Durable Power of Attorney:...................................................................................................
- ATTORNEY HOLDER................................................................................................................. REQUIREMENTS OF A VALID POWER OF ATTORNEY AND DUTIES OF THE
- REVOCATION OF POWER OF ATTORNEY............................................................................
- CONCLUSION..............................................................................................................................
- SAMPLE DRAFT: General Power of Attorney............................................................................
- SAMPLE DRAFT: Special Power of Attorney.............................................................................
- BIBLIOGRAPHY..........................................................................................................................
Contract Act, 1872, governs the relationships of the parties to a power of attorney^3. Therefore, a power of attorney may be defined as a written document in which one person (the principal) appoints another person to act as an agent on his or her behalf, thus conferring authority on the agent to perform certain acts or functions on behalf of the principal. The term âPower Of Attorneyâ is an authority given by an instrument by one person, called as the donor or principal, authorising another person, called donee or agent to act on his behalf. There may be possibility of giving âPower Of Attorneyâ by two or more persons jointly to one or more persons. Here a legal authority is given by the principal to the agent which may be broad or limited and an agent can take all necessary decisions i.e. financial, property related matters and all other matters where principal cannot be present to sign or in the case of principalâs illness and disability. 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".^4 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. A power of attorney document is an extremely important part of estate planning yet one of the most misunderstood. It is often convenient or even necessary to have someone else act for you as there is advancement in the business and commerce transactions. As many people confuse the power of attorney (POA) with a will (Probate), but these documents are two very (^3) State of Rajasthan v Basant Nehata , 2005 (12) SCC 77. (^4) http://www.tuljaestate.com/wpcontent/plugins/filedownload/download.php/?path=http://www.tuljaestate.com/wp- content/uploads/2015/02/the-power-of-attorney.doc&type=&check=&referer=/legal-services/ last accessed: 28/02/2016.
different things and have two very different functions. A will comes into effect on the day person die. A POA applies during a personâs lifetime and ceases to apply when he dies. The area of study of this project is limited to a detailed study the law relating to the power of attorney and the various kinds of power of attorney and what are the requisites of a valid power of attorney. The duties of attorney holder would be looked into and also, the researcher would provide a sample power of attorney drafted by the researcher at the end of the project.
THE LAW ON POWER OF ATTORNEY
receiving consideration and authorising the attorney to sell any immovable property, in such cases the article enumerates the duty equal to conveyance. Finally, chapter X of the Indian Contract Act, deals with agency which would substantially apply to a power of attorney. Interestingly, the Indian Registration Act 1908 does not make the registration of a power of attorney pertaining to immovable property as compulsorily registrable. Apart from these specific provisions the Chapter on Agency of the Contact Act, 1872, governs the relationships of the parties to a power of attorney^5. This is an implied provision. Therefore, a power of attorney may be defined as a written document in which one person (the principal) appoints another person to act as an agent on his or her behalf, thus conferring authority on the agent to perform certain acts or functions on behalf of the principal. A power of attorney is a delegation of authority in writing by which one person is empowered to do an act in the name of the other. The person who acts on behalf of another person (the principal) by his authority, express or implied, is called an agent and the relation between him and his principal is called agency. A power of attorney holder is nothing but an agent as defined in S. 182 of the Indian Contract Act, 1872. The authority of an agent is his power to affect his principal's position by doing acts on his behalf. Actual authority is the legal relationship between the principal and agent created by a consensual agreement to which they alone are parties.
KINDS OF POWER OF ATTORNEY
(^5) State of Rajasthan v Basant Nehata , 2005 (12) SCC 77.
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. 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. The Power of Attorney can be classified into two categories as under: I. General Power of Attorney: A general power of attorney is one by which an instrument is executed by the principal authorising the agent to do certain acts in general on his behalf. The word âGeneralâ here means that the power must be general regarding the subject matter and not general with regard to powers in respect of a subject matter. If the subject matter is not general but restricted to something either specific or specifically mentioned by the principal while drafting an instrument then it will not constitute a general power of attorney. It is otherwise called as limited power of attorney.^6 The general power of attorney gives the agent very broad powers to act on behalf of the Principal. In Suraj Lamp and Pvt. Ltd. v. State of Haryana and another^7 , the Supreme Court held that the General Power of Attorney method of immovable property sales is not a valid form of transfer of property. A three-judge bench presided over by Justice R. V. Raveendran said that property can be lawfully transferred only through registered sale deeds."A power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property," the bench said, after interpreting various provisions of the law concerning property sales. However, (^6) http://lexarb.blogspot.in/2013/04/power-of-attorney-and-section-202-of.html last accessed:29/02/16. (^7) (2009) 7 SCC 363.
REQUIREMENTS OF A VALID POWER OF ATTORNEY AND DUTIES
OF THE ATTORNEY HOLDER
As per Indian law, a power of attorney is a legal document that has to be properly framed, using the right legal terminology and setting out the objectives and responsibilities that a person may wish to authorise the appointee to carry out on their behalf. If a person wants to authorise someone to act as a power of attorney on his behalf, it must be signed and notarised by a certified notary advocate, who is able to declare that appointer is competent at the time of signing the document to issue the said power of attorney. The grantor will also need to show their ID to the notary advocate before he/she is able to certify and issue the document. It must be executed and authenticated by the registrar or sub-registrar of assurances as per the âRegistration Act, 1908â. A power of attorney can be executed by any person who is competent to enter into a contract. That is, the competency to execute a power of attorney shall be determined by Section 10 of the Contract Act, 1872. A person must be competent to give power to the appointed person so that it will not affect the legality of the instrument/deed of power of attorney. Thus, married women can execute powers of attorney even if they are minors. A company while executing power of attorney must make conformity with the âArticles of Associationâ and its common seal. A power of attorney may also be executed by two or more persons jointly in favour of one or more persons and when there are several persons as attorneys a complete authorisation in letter to be given by one of them for acting severally. A clause should be included while drafting the deed of power of attorney that all the attorneys should act jointly or separately. A general power of attorney remains in force unless expressly revoked or determined by the death of either of the party. A special power of attorney will be in force until the specified act is not completed.
Duration of the power will depend upon the type of the attorney or there may be a fixed period of power granted by the principal which must be included in the deed. A power of attorney is not compulsorily registrable unless it creates an interest in any immovable property i.e. charge in favour of donee. Registration of power of attorney is optional In India, where the âRegistration Act, 1908â, is in force, the Power of Attorney should be authenticated by a Sub-Registrar only, otherwise it must be properly notarized by the notary especially where in case power to sell land is granted to the agent. If a power of attorney is in respect of an immovable property of value more than Rs100 it must be registered. Registration of power of attorney authenticates the deed of power of attorney. Broadly speaking a power of attorney provides an agent âall powers that the principal hasâ to manage the principalâs financial affairs or make health care decisions may be enough for many purposes.^8 An agent may be authorised to^9 : To execute all contracts, deeds, bonds, mortgages, notes, checks, drafts, money orders, to manage, compromise, settle, and adjust all matters pertaining to real estate, to lease, collect rents, grant, bargain, sell, or borrow and mortgage, to sell any and all shares of stocks, bonds, or other securities, to file, sign all tax returns, insurance forms and any other documents, to enter into contacts, and to perform any contract, agreement, writing, or thing to make, sign, execute, and deliver, acknowledge any contract, agreement, to make health-care decisions for the donor or his minor children, to sue on behalf of the principal. Duties of an attorney holder: An attorney holder is a person who is authorised by donor legally. An attorney must not exceed the authority given under the power of attorney. If the attorney does exceed their authority, he or (^8) Satnam Channan v Darshan Singh , (2006) 143 PLR 459. (^9) articlesonlaw.files.wordpress.com/2011/03/the-power-of-attorney.doc last accessed: 28/02/16.
REVOCATION OF POWER OF ATTORNEY
Revocation of the POA is as important as delegation of the power itself. Otherwise, it might be to the prejudice of the parties themselves. In deciding whether the agency can be revoked or not, two conflicting interests are to be reconciled and a suitable middle way is to be formed so that none of the parties suffer unjustly. According to the Indian Contract Act, no agency can be terminated where the agent has an interest in the property which forms the matter of the agency. To decide whether a given power is coupled with interest or not, the facts of the case and the wording of the instrument itself are relevant.^12 A power of attorney may be revoked at any time by the principal or donor by giving a written notice to the agent, unless it is for a particular fixed period. Revocation usually possible when principal dies or becomes insane or becomes bankrupt. The principal himself can revoke power of attorney if the business for which the agent was appointed is over as mutually agreed upon by the principal and agent. In case if principal has named a spouse or registered domestic partner as his agent, his or her authority to act under the power of attorney is automatically terminated in the event of divorce, legal separation or termination of the registered domestic partnership. (^12) http://articles.economictimes.indiatimes.com/2010-11-21/news/27617538_1_poa-power-interest last accessed: 03/03/16.
CONCLUSION
Therefore, there lies a fine line of distinction between a general power of attorney and a special power of attorney. The general power of attorney authorizes a person to do everything that is enumerated in it, on the behalf of the granter. Whereas, in special power of attorney, a person is appointed by the principal to do some specified act or acts. In this type of power of attorney, an agent is conferred with a power to do specific act in a single or specified transactions in the name of the principal. The agent's power of attorney expires on the completion of the transaction, unlike a general power of attorney. The duty and character of the Power of Attorney holder is fiduciary and there are certain restrictions upon him, the main being that he will always act in the best interests of the granter, over and above his own if there is a conflict. A power of attorney is very essential legal document which can be admitted as evidence in the court of law whenever there is any breach of trust by the attorney holder. It is therefore, essential that principal has great confidence in his designated attorney. An agents must be someone principal can trust, without reservation, to use his property for him and not for themselves, or anyone else. To further clarify the distinction between a general power of attorney and a special power of attorney, two sample drafts of each of them have been annexed hereafter.
that now are or shall or may be or become due and owing or shall belong to me from any person or persons whatsoever; And on receipt thereof or any part thereof for me and in my name to give, sign and execute good and proper releases, acquaintances and other sufficient discharges for the same or of such part or parts thereof respectively shall be received by him; And on non-payment or non-delivery of the same or any part thereof for me and in my name or in his own name to commence and prosecute all such actions, suits and other proceedings whatsoever for the recovery thereof as he shall consider expedient or advised; And generally to sign and execute all such other deeds, conveyances, assurances, papers, documents, vouchers and writings and to make, do, perform and transact all such other acts, matters and things whatsoever, including power to form and create trusts in respect of my property or part thereof and to appoint a trustee or trustees in respect of the same as shall or may be considered necessary or proper in all respects and to all intents and purposes whatsoever as effectually as I could do the same if I were personally present; And with full power to my said attorney, for all or any of the purposes aforesaid to substitute one or more attorneys under him and such substitution, at pleasure to revoke. And I declare that all and whatsoever my said attorney or the substitute or the substitutes for the time being acting under or by virtue of these present shall lawfully do or cause to be done in the premises I, the said Mr. Siddharth Khurana, hereby for myself, my heirs, executors, and administrators and assignees, agree to ratify, allow and confirm. In Witnesses Sd/- Executor Executed today on: dd/mm/2016. Siddharth Khurana
SAMPLE DRAFT: Special Power of Attorney
SUMMARY OF FACTS: Mr. Sagar Samaria booked 1BHK Apartment in the second floor, in tower/block/building F-3, Apartment number-202 with carpet area of 510 sq. feet approx. at India Bulls golf city situated at village Savroli, Taluka Khalapur, District Raigad, Maharashtra. M/s. Sylvanus Properties Limited was the developer. A general power of attorney for applying financial assistance /loan/ facilities was already executed by Mr. Sagar Samaria on 25 June,
- Nothing has been done with regard to the development on the spot, it is still a vacant piece of land. Therefore he has to seek the remedy in competent forum to have appropriate relief .Mr. Sagar Samaria is serving abroad in Houston, Texas, 77077, United States of America, therefore he is unable to come to India for seeking the relief against the builder/ developer. Hence he is executing the special power of attorney in favour of his son-in-law Ashish Narayan Agarwal. SAMPLE DRAFT: I, Sagar Samaria, s/o Shri. Sukhdev Samaria, resident of 2836, Bairagpura, Kacchi Sarak, Mathura, Uttar Pradesh, 281003 booked 1BHK Apartment in the second floor, in tower/block/building F-3, Apartment number-202 with carpet area of 510 sq. feet approx. at India Bulls golf city situated at village Savroli, Taluka Khalapur, District Raigad, Maharashtra. M/s. Sylvanus Properties Limited was the developer. That a general power of attorney for applying financial assistance /loan/ facilities was already executed by me on 25 June, 2013. Nothing has been done with regard to the development on the spot, it is still a vacant piece of land. Therefore I have to seek the remedy in competent forum to seek appropriate relief. As I am serving abroad in Houston, Texas, 77077, United States of America I am unable to come to India for seeking the reliefs against the builder/ developer. Hence I execute the special power of attorney in favour of Ashish Narayan Agarwal s/o Nand Lal Agarwal, residing at flat 502, bld. 52,Phase II, Seawoods Estates, Sector 54, Nerul (West), Navi Mumbai, 400 706 to be my lawful attorney in my name and on my behalf to do the following acts, deeds, matters and things namely-
- To engage the advocate and file the complaint, petition, suit and defend the same before any court, authority, forum and tribunal.
BIBLIOGRAPHY
ďˇ http://timesofindia.indiatimes.com/city/delhi/Why-is-general-power-of-attorney- registered/articleshow/12989354.cms ďˇ http://www.tuljaestate.com/wpcontent/plugins/filedownload/download.php/? path=http://www.tuljaestate.com/wp-content/uploads/2015/02/the-power-of- attorney.doc&type=&check=&referer=/legal-services/ ďˇ http://lexarb.blogspot.in/2013/04/power-of-attorney-and-section-202-of.html ďˇ articlesonlaw.files.wordpress.com/2011/03/the-power-of-attorney.doc ďˇ http://lexarb.in/2013/04/power-of-attorney-and-section-202-of.html ďˇ http://articles.economictimes.indiatimes.com/2010-11-21/news/27617538_1_poa-power- interest ďˇ The Legal Draftsman , Hargopal, 12th^ Edn., (New Delhi: Universal Law Publishing Co. Pvt. Ltd., 2010).
