What Is Power Of Attorney? 

In Layman’s language, a power of attorney is a document that allows the principal person to appoint another person to serve as their agent, conferring certain rights and duties on him to function on his behalf. According to the Power of Attorney Act, of 1882, Section 1A lays down the definition of Power of Attorney as “includes any instrument empowering a specified person to act for and in the name of the person executing it.” This Act gives two terminologies for the giver and receiver of power of Attorney donee and donor respectively. They may be known as principals and agents as well.

In Manika Majumder and Ors v. Dipak Kumar Saha (dead) through Lrs and Ors, the court held that when a sale deed is executed on the strength of a deed of power of attorney in the suit is fatal to the case of the plaintiff.

A power of attorney is not a deed of transfer of right, possession or interest in immovable property. The power of attorney is the creation of an agency whereby the grantor authorizes the grantee to do the acts as specified, on behalf of the grantor, which on execution binds the grantor as if he had done it. 

Types Of Power Of Attorney

  1. General power of Attorney- this type of power of attorney gives the agent the right to perform any task on one’s behalf. It is much wider than the Special power of attorney.
  2. Special power of Attorney- this type of power gives agents the power to perform specific tasks. This is narrower in comparison to General power of attorney.

Limited Power Of Attorney Types

  1. Springing powers: It becomes active only if it is triggered by a specific event, usually the death or incapacitation of the account owner. It is generally used with a will. 
  2. Durable and Non-Durable: Durable Limited power of attorney is when the done is given continuing authority to perform certain functions even if the client dies or becomes incapacitated. The majority of Limited Power of Attorney is non-durable, which means that it becomes void when the client dies.

Registration Of Power Of Attorney

Neither the Registration Act, of 1908 nor the Power of Attorney Act, of 1882, specifically mentions that registration of power of attorney is compulsory or mandatory. However, registration of power of attorney which gives power to the agent to dispose of a property through a sale deed or conveyance etc. needs to be mandatorily registered. Under the Indian Evidence Act, of 1872, if someone executes a power of attorney before a notary or a court or a representative of the central government etc., the court must assume that the POA has been completed and approved.
Instruments about power of attorney for the sale of immovable property need to be compulsorily registered. Registration must be done at the office of the sub-registrar in whose jurisdiction the authorized persons reside.

Benefits Of Limited Power Of Attorney

  1. Allows the agent to make financial transactions: the agent is free to act upon any financial transactions as allowed by the power of attorney as made by the principal. 
  2. Fulfils the requirements of the Principal: Through the limited power of attorney, the needs and requirements of the principal can be fulfilled. For example, if the principal wants someone to collect rent from his property on his behalf, he may via power of attorney appoint an agent for the same. 

Can A Property Be Sold Using Power Of Attorney?

If a power of attorney mentions that the agent has the right to sell or purchase the property, the agent still has to take the signatures of the principal. If the power of attorney does not specify the right to sell or purchase or it is limited in its power, then the act of selling will not be valid.

In Anil Rishi v. Gurbaksh Singh, the SC held that the power of attorney holder may do such acts as are specifically authorised by the power of attorney or which may be necessary or incidental to the attainment of the expressly authorised purpose. 

In Jai Singh v. Shakuntala Devi, the court observed that while a general power of attorney may authorise the attorney to sell, mortgage or lease, this would not mean that the power to transfer ownership flowed from such a grant of authority. 

In the State of Rajasthan v. Basant Nahata, the court held that the execution of a power of attorney in terms of the provisions of the Contract Act also the Powers of Attorney Act is valid. When a power of attorney is used, the donor acts only on behalf of the donor according to the powers given to him based on the power of attorney. He cannot use the power of attorney for his own benefit.

In Ramathal & Ors v. K. Rajamano (Dead) Through LRS and Anr, the plaintiff had executed the Power of Attorney for the limited purpose of development of the land by dividing it into smaller plots and to obtain necessary permissions from the authorities. They never executed the power of attorney for authorising defendant no 2. To sell, create a mortgage, execute a gift deed, settle the land in the dispute or sign a transfer of grant of Patta. The defendants were well aware of this fact and took undue advantage of the simplicity and illiteracy of the plaintiffs. The plaintiffs never handed over the possession of the land in dispute and continued in possession of the same. The plaintiffs took the plea of non-est factum(it is not the deed). 

The court held that the power of attorney was found to be invalid, and any further action taken under it, cannot be held to be valid. 

In Mita India Pvt Ltd v. Mahendra Jain, the court held that the power of attorney holder cannot sub-delegate his power to another person but the same can be delegated when there is a specific clause permitting sub-delegation.

In Umadevi Nambiar v. Thamarasseri Roman Catholic Diocese, the court held that the power to sell is not inferred from the document of power of attorney which has to be construed strictly. The agent will have the power to sell the property only if the document expressly authorises him/her (1) to execute a sale deed (ii) to present it for registration and (iii) to admit the execution before the registering authority. 

Revocation Of The Limited Power Of Attorney

The power of attorney can be revoked in the following instances: 

  1. Once the required act as stated in the Power of Attorney is completed 
  2. The principal revokes the power of attorney according to his wish. 

In Amar Nath v. Gian Chand, the court held that merely writing cancelled on registered power of attorney would not make it null and void. The power of attorney can only be revocated in writing and not orally. If a power of attorney was signed at the recorder’s office, the revocation letter should also be revoked at the same premise.

Conclusion 

Power of Attorney is a tool that can help the principal appoint an agent to manage financial, and legal issues or any other issues when the person is not physically present. However, Power of Attorney is not absolute and limited. Limited Power of Attorney is a type of power of attorney, whereby the principal lays down the limitation, clearly specifying the requirement and the reason for drafting of power of attorney that needs to be fulfilled by the agent, after which the POA ceases to exist. The revocation of the POA has to be in writing and not oral.

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